There are a lot of ways to invest money — high-yield savings accounts, CDs, bonds, funds, stocks and gold are all options. The best investment for you depends on investment goal, timeline and other factors.
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When investing becomes a roller coaster ride — as it has this year, with steep market reactions to tariffs and recession fears — its more important than ever to focus on proven, diversified investments that will help you ride the highs and lows.
There is one piece of advice that remains steady even when the market isnt, and thats to avoid timing the market or trying to buy the best investment at the right time. It often backfires. Instead, focus on the best investments for your goals, which dont change with every market whim.
Ever looked at your bank account and thought “There’s gotta be a better way to grow this money”? You’re not alone. I’ve been there too—watching my hard-earned cash sit idle while inflation quietly nibbles away at its value. It’s frustrating right?
Well, I’ve got good news. There are proven strategies to make your money work harder for you, and I’m gonna break them down in this article. Whether you’ve got $100 or $100000 to invest these approaches can help you build wealth over time.
Why Traditional Savings Accounts Just Don’t Cut It Anymore
Let’s be real – keeping all your money in a regular savings account is kinda like using a flip phone in 2025. It works, but you’re missing out on so much potential.
Traditional savings accounts typically offer interest rates that barely keep pace with inflation. This means your purchasing power stays roughly the same or even decreases over time. Not exactly the path to financial freedom!
The 9 Best Ways to Make Money Investing
After researching the most effective investment strategies and analyzing their potential returns, I’ve identified these nine approaches that can genuinely help you grow your wealth.
1. High-Yield Savings Accounts – The Safe First Step
While technically not an “investment,” high-yield savings accounts deserve a spot on this list, especially following recent Federal Reserve actions.
Benefits:
- Higher interest rates than traditional bank accounts
- FDIC-insured (your money is protected)
- Easy access to funds when needed
- No market volatility to worry about
Best for Emergency funds or money you’ll need within the next year or two
I personally keep my emergency fund in a high-yield savings account. It earns decent interest while staying liquid enough for unexpected expenses.
2. Certificates of Deposit (CDs) – Lock In Those Rates
CDs are federally insured savings accounts that offer fixed interest rates for specific time periods.
Benefits:
- Fixed interest rates (great when rates might decrease)
- Higher returns than regular savings accounts
- FDIC-insured up to $250,000
- Predictable returns
Drawbacks:
- Your money is locked up for the term (penalties for early withdrawal)
- Minimum deposits required
- Lower returns than other investments on this list
CDs work great for money you won’t need immediately but will need at a predetermined future date – like for a down payment on a house you’re buying next year.
3. Index Funds – The Passive Investor’s Best Friend
Index funds track specific market indexes (like the S&P 500) and offer instant diversification.
Benefits:
- Low fees compared to actively managed funds
- Instant diversification across many companies
- No need to pick individual stocks
- Historically strong returns over long periods
- Perfect for beginners and experienced investors alike
Warren Buffett famously advised his heirs to invest 90% of their inheritance in low-cost S&P 500 index funds. That’s a pretty strong endorsement from one of history’s greatest investors!
4. ETFs (Exchange-Traded Funds) – Flexible and Diversified
ETFs are similar to index funds but trade like individual stocks throughout the day.
Benefits:
- Instant diversification
- Generally more tax-efficient than mutual funds
- No minimum investment requirements (just buy one share)
- Very low expense ratios
- Trade during market hours (unlike mutual funds)
Best for: Investors of all experience levels looking for diversification and flexibility.
5. Dividend Stocks – Growth + Income = Win-Win
Dividend stocks provide the best of both worlds: potential share price appreciation plus regular cash payments.
Benefits:
- Regular income payments (typically quarterly)
- Often represent stable, profitable companies
- Can reinvest dividends to compound returns
- Potential for stock price appreciation
Companies like Johnson & Johnson, Coca-Cola, and Procter & Gamble have increased their dividend payments annually for decades.
6. Growth Stocks – Higher Risk, Higher Potential Reward
Growth stocks are companies expected to grow faster than average.
Benefits:
- Potential for substantial returns
- Opportunity to invest in innovative companies
- Can dramatically outperform market averages
Drawbacks:
- Higher volatility
- No dividend income typically
- Requires more research and stomach for risk
This strategy requires more research but can pay off big. Just look at early investors in companies like Amazon, Apple, or Tesla!
7. Real Estate Investments – The Tangible Asset Play
Real estate offers unique advantages as an investment class.
Options include:
- Real Estate Investment Trusts (REITs)
- Rental properties
- Real estate crowdfunding platforms
Benefits:
- Potential for both income and appreciation
- Tax advantages
- Inflation hedge
- Diversification from stock market
REITs offer an easy way to invest in real estate without buying physical property and typically pay above-average dividends.
8. Bonds – The Stability Component
Bonds are loans to governments or corporations that pay regular interest.
Types of bonds:
- Government bonds (safest, lower yields)
- Corporate bonds (higher yields, more risk)
- Municipal bonds (potential tax advantages)
Benefits:
- Regular income payments
- Less volatile than stocks
- Government bonds are nearly risk-free
- Can help balance portfolio risk
Fidelity research shows that bonds tend to rise when stocks fall, providing crucial stability during market turbulence.
9. Retirement Accounts – The Tax-Advantaged Approach
While not an investment type per se, retirement accounts provide tax advantages that can dramatically boost returns.
Options include:
- 401(k)s (especially with employer matching)
- IRAs (Traditional or Roth)
- HSAs (for medical expenses)
Benefits:
- Tax-deferred or tax-free growth
- Potential employer matching (free money!)
- Reduced current taxable income (traditional accounts)
- Tax-free withdrawals in retirement (Roth accounts)
Key Investment Principles for Success
No matter which investment vehicles you choose, these principles will help maximize your returns:
1. Give Your Money Time to Grow
Compounding is often called the eighth wonder of the world for good reason. When your earnings generate their own earnings, wealth can grow exponentially.
Fidelity research reveals that missing just the 5 best market days between 1980 and 2023 could have reduced portfolio returns by a staggering 37%. This reinforces why staying invested for the long term matters more than trying to time the market.
2. Diversify Your Investments
Ever heard “don’t put all your eggs in one basket”? This is especially true for investing.
By spreading investments across different types of assets (stocks, bonds, real estate, etc.), you reduce risk while maintaining potential for strong returns.
3. Rebalance Your Portfolio Regularly
Over time, some investments will grow faster than others, throwing off your planned asset allocation. Rebalancing involves selling some of the overperforming assets and buying more of the underperforming ones to maintain your target allocation.
This strategy essentially forces you to “buy low, sell high” – the fundamental goal of investing.
4. Minimize Investment Taxes
Taxes can significantly reduce your investment returns. Strategies to minimize tax impact include:
- Holding investments for more than a year (for lower capital gains rates)
- Using tax-loss harvesting to offset gains
- Investing through tax-advantaged accounts like IRAs and 401(k)s
- Considering location optimization (putting tax-inefficient investments in tax-advantaged accounts)
5. Keep Costs Low
Investment fees might seem small (1% or 2%), but they compound just like returns do—except they reduce your wealth instead of growing it.
A seemingly small 1% difference in fees can reduce your final portfolio value by 10% or more over 20 years!
Common Investment Mistakes to Avoid
I’ve made some of these mistakes myself, so learn from my experience:
- Trying to time the market – Even professional investors rarely succeed at this consistently
- Checking your investments too frequently – This leads to emotional decisions
- Chasing past performance – Yesterday’s winners aren’t necessarily tomorrow’s
- Neglecting to diversify – Concentration might make you rich, but diversification helps keep you rich
- Abandoning your plan during volatility – Market downturns are normal and temporary
Creating Your Investment Strategy
Everyone’s financial situation is unique. Here’s a simplified framework to help you develop your personal investment strategy:
- Define your goals – Retirement, home purchase, college funding, etc.
- Determine your time horizon – When will you need the money?
- Assess your risk tolerance – How much volatility can you handle without panicking?
- Choose appropriate investments – Match investment types to your goals and risk tolerance
- Set up automatic contributions – Consistency is key to long-term success
- Review and adjust periodically – Life changes, and your investment strategy should too
Final Thoughts: Start Now, Stay Consistent
The absolute best investing strategy? Starting early and staying consistent.
I’ll leave you with this eye-opening example: If you invest $500 monthly from age 25 to 65 and earn an average 8% annual return, you’ll have about $1.5 million. Wait until age 35 to start, and that same strategy yields only about $650,000.
That ten-year head start more than doubles the final result! This perfectly illustrates why the best time to start investing was yesterday—and the second-best time is today.
What investment strategy are you most interested in trying? Have any questions about getting started? Drop a comment below, and I’ll do my best to help!
Corporate bonds
Corporate bonds operate in the same way as government bonds; you’re only making a loan to a company, not a government. These loans are not backed by the government, making them a riskier option. And if it’s a high-yield bond (sometimes known as a junk bond), these can actually be substantially riskier, taking on a risk/return profile that more resembles stocks than bonds.
Best for: Investors looking for a fixed-income security with potentially higher yields than government bonds, and willing to take on a bit more risk in return. In corporate bonds, the higher the likelihood that the company will go out of business, the higher the yield. Conversely, bonds issued by large, stable companies will typically have a lower yield. It’s up to the investor to find the risk/return balance that works for them.
Where to buy corporate bonds: Similar to government bonds, you can buy corporate bond funds or individual bonds through an investment broker.
Fixed interest rate not subject to market volatility.
Can have higher yields than government bonds.
Can be lower risk than investing in stocks or funds.
Bonds with higher yields are riskier.
Not backed by the U.S. government.
Risk of principal loss.
Government bonds
Bonds can offer investors a relatively safe form of fixed income. A government bond is a loan to a government entity (such as the federal or municipal government) that pays investors interest over a set period of time, typically one to 30 years. Because of that steady stream of payments, bonds are known as fixed-income securities. Government bonds are virtually a risk-free investment, as they’re backed by the full faith and credit of the U.S. government.
The drawbacks? In exchange for that safety, you won’t see as high a return as you might with other investments. If you were to have a portfolio of 100% bonds (as opposed to a mix of stocks and bonds), it would be substantially harder to hit your retirement or long-term goals.
Best for: Conservative investors who would prefer to see less volatility in their portfolio. This is true despite some of the fluctuations government bonds have seen in 2025. Bonds fixed income and lower volatility make them common with investors nearing or already in retirement, as these individuals may not have a long enough investment horizon to weather unexpected or severe market declines.
“Bonds offer a ballast to a portfolio, usually going up when stocks go down, which enables nervous investors to stay the course with their investment plan, and not panic sell,” says Delia Fernandez, a certified financial planner and founder of Fernandez Financial Advisory in Los Alamitos, California.
Where to buy government bonds: You can buy individual bonds or bond funds, which hold a variety of bonds to provide diversification, from a broker or directly from the underwriting investment bank or the U.S. government.
Fixed interest rate not subject to market volatility.
Backed by the U.S. government.
Interest exempt from state and local taxes.
Often lower returns than some other investments.
Small risk of principal loss.
Investing for Beginners – How I Make Millions from Stocks (Full Guide)
FAQ
What is the best investment to earn money?
- Top investments right now.
- High-yield savings accounts.
- CD ladder.
- Short-term Treasury ETFs.
- Medium-term corporate bond funds.
- Dividend stock funds.
- Small-cap stock funds.
- REIT index funds.
How much money would I need to invest to make $1000 a month?
You’ll need a portfolio worth about $300,000 generating a 4% dividend yield to earn $1,000 in monthly passive income. Building a diversified collection of 20 to 30 dividend stocks across different sectors helps protect your income.
How to turn $10,000 into $100,000 fast?
How much will $5000 grow in 10 years?
| Discount Rate | Present Value | Future Value |
|---|---|---|
| 3% | $5,000 | $6,719.58 |
| 4% | $5,000 | $7,401.22 |
| 5% | $5,000 | $8,144.47 |
| 6% | $5,000 | $8,954.24 |