Introduction
Chances are you have some extra money on hand. How would you like to take that money and, instead of leaving it in savings, put it into an account where it can grow for you passively over time? The good thing is that you can actually do something like this online.
Yes, online investing is real, and it’s definitely a way for you to earn extra money online. And there is a variety of ways and websites where you can get started with your investment on your own. In fact, I have listed 11 websites where you can get started investing online, so make sure to check that out to get ideas.
And, if you’re not sure of how you can get started investing online, you’ve come to the right article! I will go over the different ways you can invest your money online and what I recommend you do in order to become successful as an online investor, even if you’re just a beginner!
Here are the three different ways of online investing that we’ll cover in this article:
- Stocks and bonds
- Diversification
- Cryptocurrency
But, before we get into the article, I need to make an important disclaimer!
DISCLAIMER: You may or may not make money!
When it comes to investing online, you are NEVER guaranteed to make any returns on your investment. Whether you will earn money from investing or not strictly depends on what you’re investing in.
Therefore, you face the risk of losing some money while trying to make returns on your investment. In other words, investment is NOT a source of income!
If you want guaranteed ways to earn money online, check out the other topics I have on making money from home, such as starting an online business, going into affiliate marketing, or finding work-from-home jobs.
With that out of the way, let’s start learning about online investing!
Stocks and bonds
Nowadays, you don’t need a broker to start buying your own shares in the stock market and grow your money. With the Internet, you can start picking shares to invest in and learn how to strategically earn returns on your investment.
What Are Stocks and Bonds?
If you’re already familiar with investing, you should be familiar with stocks and bonds. A stock is basically partial ownership of a company where, if the company prospers, you make returns and, if it fails, you lose money. A bond, on the other hand, is an agreement that, by allowing the government or a company to borrow your money, they will pay you back plus interest.
Obviously, bonds take longer for you to earn any return, but you have less risk of losing money. Stocks are riskier but, if a company prospers, you can earn really good returns on your investment.
Investing Tips
I do not recommend investing in a single stock or bond, but you can certainly earn returns if you know which stocks and/or bonds to invest in. Here are some tips to help you with investing in stocks or bonds:
- Never put your eggs into one basket. Buy a few stocks that you can invest in. That way, you’re not totally dependent on a single company to make your investment work. It will take longer for you to make returns, but you have a lower risk of losing your money.
- If a company is failing or on the verge of going bankrupt, do not invest in their stock. Buy stocks from a few companies that have been consistently prospering in the stock market. That way, you can earn good returns in the span of a few months. Keep in mind, however, that a company’s position in the stock market can change unexpectedly, so you run the risk of losing some money by investing in a company.
- Invest in a bond if you do not want to run the risk of a company failing and you losing money. Bonds allow you to feel safe with your money but it will take years and years before you earn any noticeable returns.
Places to Get Started
When you’re ready to look for bonds or stocks to invest in, I highly recommend Stash! It’s a great website and app where you can look for stocks and bonds that you can buy and invest your money in. Every company in the stock market can be found inside of Stash, so it’s easy to get started as your own broker from the comfort of your home.
Another great app to find stocks to invest in is Robinhood. You can also use Robinhood to track the stock market over time. However, it is pretty advanced, so unless you know what you’re doing, I do not recommend Robinhood.
Diversification
What Is Diversification?
This is a fantastic way to invest your money because you don’t have to constantly think about your investment. With diversification, you spread your investment across hundreds, if not thousands, of companies. For example, if you had $300 to invest, you have two possible scenarios.
- Without diversification, you invest $300 into one company. You have the chance of growing that easily to $350, but if that company suddenly fails, you could instead lose money and your portfolio becomes $250, meaning you just lost $50 instead of gain $50.
- With diversification, you have $300 to invest and so you invest $1 into 300 companies at once. If 200 out of those 300 succeed, you may earn a return of $0.02 per company, making it a total return of $2.00. Your portfolio grows to merely $302, but you have a lesser chance of losing a few dollars from your investment.
Having a diversified investment portfolio lowers your risk of losing money, but it will take months and years down the road before you earn a good return on your investment. If you are risk-averse when it comes to investing, I highly recommend you diversify your investment.
Investing Tips
Here are two things I would recommend to you as you are starting your diversified investment.
- Make sure your diversified investment is made of at least 100 companies. The more stocks you’re invested in, the safer your investment will be, and the higher your chances of getting returns.
- When starting your diversified portfolio, keep it balanced. Don’t be too conservative or too risky. This way, you will get the most return out of your investment with as little risk as possible.
Places to Get Started
Believe it or not, Stash can actually allow you to start a diversified investment portfolio. You can use its built-in portfolio builder, set your volatility to Balanced, and it will give you groups of hundreds of companies that it recommends you invest in. That way, you can rest assured that you are more likely to gain some return out of your investment.
Another good website or app where you can start a diversified investment is Acorns. Simply set up your account and Acorns will set up a diversified portfolio made up of thousands of companies and that is customized to you. Acorns is very beginner-friendly and you can even leave your investment alone and let it grow for you without you having to think about it. Now that’s awesome.
Cryptocurrency
What Is Cryptocurrency?
Now I’m almost sure you’ve come across the word “cryptocurrency” and you may be confused as to what it is or how it works. Basically, cryptocurrency (or “crypto” for short) is slowly becoming the world’s completely digitized currency.
Since crypto is 100% digital, the only way crypto can be discovered is by solving extremely complex mathematical problems using a special computer program. This process is called mining. Thankfully, you don’t have to try to find the crypto. Instead, you can buy crypto that has already been mined.
By investing in crypto, not only will you have a ton of crypto saved up, but you’ll also be ready if and when the world switches to using crypto.
The idea is, crypto may not be so common now, but it will at some point in the future, so it’s good to be ready for it before it happens. But keep in mind that crypto is not a currency in big demand because of all the currencies still being used around the world, so don’t expect to get huge returns investing in crypto.
There are different types of cryptocurrencies. The most common cryptocurrency is Bitcoin (BTC), but there are other types of crypto such as Ethereum (ETH) and Litecoin (LTC).
Places to Get Started
The best place you can go to start buying crypto for your crypto wallet is Coinbase. It is a fantastic site to learn all about the world of crypto and makes it easy for you to start buying crypto and saving it up in your wallet.
And, if you already use the popular investing app Robinhood, you can actually buy and invest in the Bitcoin cryptocurrency. Whether Robinhood will allow you to invest in other cryptocurrencies in the future remains to be seen.
Final Words
That’ll do it for this guide on all the ways you can invest online. Again, keep in mind that investments are always risks to take in order to gain those returns, so be willing to accept those risks if you’d like to earn something from your investment.
Thankfully, there are ways you can earn guaranteed income right here online. I’ve made an article on the best ways you can work from home, so check it out if you’d like to learn how you can make money without physically going to work. You can even earn passive income where, eventually, you can make money by doing practically nothing. I have some ideas on online passive income that you may be interested in checking out.
But, if you still would like to stick with investing, it’s certainly not a bad idea to have your money grow for the future. Just understand that investments are your responsibility.
Throughout this article, I’ve given you some places where you can start investing online. But, again, if you’d like more ideas on places where you can get started, you can read my full list of online investing websites and apps.
So, with that being said, I wish you all the best in your online investing journey.