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High-yield Investments in the United States

Instruments for investing money and earning a high income

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High-Yield Investments

Getting a quick and high return on investment is accompanied by a great risk as you can easily lose a significant part or even all invested money.

Because of many options you can face a complicated choice where exactly to invest money to. In this situation risk assessment and setting of goals to be achieved will help.

Low-risk investments

Low risk investments include the following 3 options:

  • US Savings Bonds,
  • saving accounts,
  • certificates of deposit.

US Savings Bonds

Savings Bonds are issued by the U.S. Treasury. Such securities can be attributed to investments with minimal risk because their principle is that an investor provides a loan to maintain the operations of the state fund. Within the stipulated period the state pays a fixed interest rate on a savings bond.

There are two types of savings bonds:

  1. EE Series Bonds,
  2. I Series Bonds.

EE Series Bonds

Such securities have a fixed interest rate within up to 30 years. EE series bonds refer to long-term investments that is why they include penalties for payment ahead of the deadline.

They are bought at a nominal value which means by investing $100 you'll get a $100 bond. The interest rate of such securities is fixed once per 2 years that allows you to know as precisely as possible how much interest the bond will accumulate over the entire term.

I Series Bonds

I series bonds assume interest charge taking into consideration ratio of the inflation rate to the fixed interest rate. For such securities the interest rate is fixed after purchasing and the inflation rate adjustment occurs every 6 months. Payment for I series bonds within a period earlier than 5 years will bring penalties.

Saving Accounts

A Saving account is one of the reliable investments with a high income and it provides an opportunity to receive interest for every invested dollar. The liquidity of saving accounts allows you to have an access to the money when needed.

Certificates of Deposit (CD)

This type of investment also refers to low-risk ones. With the certificates of deposit you are able to receive interest from invested money as well as a bonus in the form of an allowance to the current interest rate. But it is only possible on the condition that a deposit is untouchable for the entire period of 6 months to 5 years.

Attention! Cashing an account out earlier than the deadline comes is subject to a fine.

Medium Risk Investments

For greater benefit from the investments medium risk investments are worth paying attention to. They include:

  • High Dividend Stocks;
  • Real Estate Investment Funds (REIT);
  • Crowdfunding Real Estate;
  • Corporate Bonds.

High Dividend Stocks

Dividends are the part of corporation's profit which is distributed among shareholders in proportion of their participation. Dividends are paid by companies on a voluntary basis and this is not required by law. More frequently corporations seek to pay shareholders’ dividends as a cash reward.

Such type of investment can be risky if you do not have a clear strategy. First of all, it is worth directing your attention to large corporations that have existed in the market for a long time. These companies tend to be the most financially stable thank to sufficient capital to stay at a fly level within the conditions of market fluctuations.

Important! Stocks of companies that pay dividends can be bought directly or through broker’s firms. When using the service of broker’s firms a specified purchase minimum amount will not be required. While buying directly from a company the minimum amount varies from $25 to $500.

Real Estate Investment Funds (REIT)

This method is considered to be the best money investment in real estate as it allows you not to spend a huge amount of money in contrast to property acquisition. REIT pay above-average dividends as well as provide a stable income as property values rise.

It is better to start the study with REIT, deal with buying real estate in the field of interest. Most REITs are registered with the SEC. They are displayed on the public stock exchanges and are called “publicly traded REITs”.

Unlike public REITs, private ones are not displayed on the stock exchanges and do not require mandatory SEC registration. Among them we can distinguish the private REIT Diversyfund which enables to create a diversified portfolio and invest against price variability in the market.

Real Estate Crowdfunding

Crowdfunding in real estate makes it possible to unite investors' money for investing in projects with great potential. A projects' developer finds an investment opportunity but does not have enough funds to finance it completely and that leads to attracting other investors.

Note! In order to become a part of a crowdfunding scheme you do not need to have a lot of money, it is enough to contribute as much capital as you can.

Corporate Bonds

Corporate bonds are issued by large corporations for the purpose of investing capital to expand the business further. Corporate bonds guarantee projected revenue without complex strategic schemes. While buying them you lend money to an issuing company. After that, the latter undertakes to pay interest on the originally deposited capital. Upon the bond maturity the company reimburses the principal amount.

Corporate bond profits are higher than government ones. With this type of investment you can save the principal capital and earn a stable profit. Moreover, they provide an opportunity to invest in several areas.

Important! You can cash bonds out until maturity.

You must open a broker’s account to buy corporate bonds.

High-Risk Investments

Risky investments include:

  • Forex,
  • Options,
  • Penny Stocks.

Forex

You can invest in Forex by buying and selling different currencies. Each country has its own currency with different value in relation to different countries. To reduce the risk of fraud you are strongly recommended to choose a reliable broker. For example, the largest US broker Forex.com is engaged in activities under the strict supervision of CFTC and NFA regulators.

Options

Options trading is similar to stock trading. An option is an agreement to buy and sell shares at a predetermined price and by a certain date.

Option contracts are based on a variety of basic securities so it is possible to place any types of warrants which makes options the most feature-rich option for investing in comparison with equities.

Attention! Options trading has high risks and difficulties so you need to seek help from the best broker.

Penny Stocks

Penny stocks are cheap and could be a chance of increasing returns by up to 1000% or result in a total loss of capital. Typically, these are companies with poor financial history or complete lack thereof. Price instability leads to the need to be patient with risk for earning a high income. Buying penny stocks is highly speculative as such small shares are not placed on the major NASDAQ and NYSE stock exchanges.

You should always have cash reserves in saving accounts which can be used quickly if required. Public and corporate debt with high ratings, money market funds and annuities are suitable for increasing savings with minimal risk and high returns.