There’s no such thing as a “guaranteed” return on investment. There are, however, some investments that tend to offer a much easier and less stressful ROI than others.
And as you look to grow your personal portfolio, it wouldn’t hurt to toss a few of these into the mix.
Index Funds
Imagine you could own a tiny piece of lots of different companies, from tech giants to big retail stores. Well, that’s what an index fund lets you do. It’s like a basket of stocks or bonds that mirrors a specific part of the market. For example, an S&P 500 index fund includes bits of the 500 largest U.S. companies.
Index funds allow you to invest in tons of different companies, even if you don’t have millions of dollars to plug into them. This means almost anyone can get exposure to them in their portfolio. And once you invest in an index fund, you don’t have to do much. These funds automatically adjust to match the index they’re following, so you don’t have to worry about picking individual stocks.
Real Estate
There are dozens of different strategies you can use when investing in real estate. But if you’re looking for a hands-off way to generate a nice ROI without requiring too much of your time, there are a few specific options to consider:
- Raw land. If you’re okay with a buy and hold investment that doesn’t generate much immediate cash flow, raw land is probably the most low-maintenance real estate investment you can make. Depending on the piece of property, the goal is to sit on it and let it appreciate over time. You may also be able to eventually harvest timber and make a nice payday.
- Rental properties. Now, you’re probably thinking, how is a rental property investment hands-off? Well, you have to do it the right way. You’re going to need someone to offload all of those daily responsibilities to. So, for example, if you’re buying a rental in Fort Worth, Texas, you’ll want to hire Fort Worth property management, and so forth. If you do it this way, it becomes much less time-consuming and stressful.
- REITs. REITs let you invest in real estate without having to buy a house or a building. They own and manage properties, and you can buy shares just like stocks. REITs pay out most of their income as dividends to investors. You get the benefits of real estate investing, like rental income, without the hassle of being a landlord. Plus, you can buy and sell REIT shares easily.
Robo-Advisors
Robo-advisors are like having a smart robot buddy that helps you invest. You tell it your goals and how much risk you’re comfortable with, and it builds a portfolio for you. It uses fancy algorithms to manage your investments, making sure your money is spread out to reduce risk.
Robo-advisors handle all the complex stuff, like rebalancing your portfolio to keep it on track with your goals. Plus, they’re usually cheaper than hiring a human financial advisor. This makes it a pretty hands-off option.
Target-Date Funds
Think of target-date funds as a “set it and forget it” meal in the investing world. You pick a fund with a year in its name, like “Target Date 2050.” That year is close to when you might retire or need the money. Early on, the fund invests more in stocks for growth. As the “target date” gets closer, it automatically shifts to safer investments like bonds.
You don’t have to worry about changing your investments as you get older. The fund does it for you, making it a super hands-off choice. You can use target-date funds for retirement, college planning, or any other major life event or goal.
Dividend Stocks
Dividend stocks are shares in companies that pay you a portion of their earnings regularly, usually every quarter. It’s like getting a little “thank you” note with cash inside just for owning the stock.
Once you own dividend stocks, you can potentially earn money without doing anything. Some people reinvest those dividends to buy more shares, helping their investment grow over time.
The average person isn’t going to get rich with dividend stocks. However, it’s an excellent supplementary source of income for those who want some predictability and stability in their investments without having to do anything other than own shares of the stock.
High-Yield Savings Accounts (HYSA)
A high-yield savings account is like a regular savings account but with a twist: it pays you more interest. It’s a safe place to keep your money, and you earn more just by letting it sit there.
There’s no risk of losing your money, and you don’t have to think about it. Plus, you can access your cash if you really need it.
If you have cash sitting in a traditional bank savings account where it’s making you a few pennies every month, moving it over into a HYSA is a no-brainer. In many cases, you can make 50-times what you would make in a regular savings account (without incurring any more risk or losing any liquidity).
Adding it All Up
Again, it should be stated that there’s no such thing as a sure-thing investment. However, if the goal is hands-off and stress-free, these six investments are about as close as you’ll get. Weave a few into your portfolio and enjoy the benefits!
