How To Double Your Money
In order to help you make the best investment decision, we have created a guide that will help you choose the best methods so that you can double your money with safe or low risk investments.
There are several forms of investment that allow you to double your money, and each has its advantages and disadvantages. Then we will show you the best investment vehicles so you can multiply your money in a safe and reliable way.
However, there are several mistakes you should avoid. The following investment vehicles will help you form a strategy that suits your level of risk so you can double your money at your own pace.
1.Doubling Your Money – Slow But Safe
Investors who are now wealthy have not always been wealthy and have been investing at a slow but very cautious pace for most of their life. When it comes to the most traditional way to double your money, time is your best friend.
The safest way to double your money or multiply your investment capital is to invest in a solid portfolio with low risk and few speculative actions and investing in large companies, corporate bonds and/or government bonds.
Although this conservative way of investing will take you longer to double your money, it is a good way to avoid taking unnecessary risks. In addition, you can calculate how long it will take to double your investment, thanks to rule 72.
Rule 72 is a quick way to calculate how long it will take to double your money. To use rule 72,simply divide 72 between your expected annual rate of return, and that will tell you how old it will take you to double your money.
For example, if we consider that historically the aforementioned stock investment strategy has achieved a 10% annual return and government bonds have offered a return of 6%, we can conclude that we will have an average annual return of 8%.
If we divide 72 between 8% annual return, we realize that in 9 years you can double your money. It is not bad when you consider that in 18 years you can quadruple the value of your investment portfolio.
2.How To Double Your Money – The fast lane
If you’re the kind of impatient investor, you probably want to double your money quickly. Then the best strategy to double your money will be to buy companies at low prices, when the rest of the investors are selling.
However, you must understand that this strategy is very risky and you should do the in-depth research on the company you are buying and be very clear why you think this company will regain its value in the future. Without a doubt, many companies are victims of angry or desperate investors to sell, and this can represent a perfect investment opportunity for you.
If this strategy catches your eye, one of the most important indicators you should look at is the price-earnings ratio (P/E ratio). The lower this number, the more “cheap” the shares you are buying.
3. Government Bonds, Treasuries, ETFs
So far we have presented two extremes in looking for ways to double your money: slow vs fast. But now we present the safest investment tool with less risk if you want to double your capital.
If you are interested in doubling your money without risk, then you should consider government bonds. Or better yet, buying an investment fund in a government fund like Vanguard Bond ETF.
Although government bonds may seem complicated at first, they are actually easy to understand. When you buy a government bond, you are lending money to the government with the promise that it will pay you interest. US government bonds are viewed by many investors as the safest way to invest.
When buying a government bond, you pay a price less than one day will have. For example, instead of paying $ 1,000 for a government bond, you pay $ 500 and depending on the time and interest rate, you must wait until this bond matures and you can redeem it for $ 1,000.
4. The Speculative Way
If you like risk and believe that you are able to find the best companies year after year on the stock market, this will be the right way for you to double your money. This form of investment includes putting your money in options, or the famous penny stocks.
Options are one of the most risky ways to double your money and speculate on any company. For many investors, the options have provided a great source of profits for their investment portfolio. However, you must be careful and make sure you know what you’re doing, as the options can take away your wealth as fast as you think.
There are also the famous penny stocks, which promise big profits to investors with iron stomach, who are able to withstand the great changes in prices and stock value. If you decide to try your luck by doubling your money with these stock penny stocks, you may be able to double it in just a few minutes or lose your entire investment in the same amount of time.
Although it may not be very fun or innovative, history has shown that the best way to double your money is by using time as the primary factor in your investments. We know that it is not the sexiest way to invest, but it’s the one that has given the most results.
You can start doubling your money today by opening a retirement account or investing in the stock market. If you are a less experienced investor, you can invest using mutual funds and let the professionals take charge of multiplying your investment.