In an uncertain economy, many people will be searching for more innovative money ideas. With the economy in disarray and inflation making its first significant appearance in at least a decade, millions of working people wonder what to do with their money as 2022 approaches. Unfortunately, all the usual solutions don’t seem so attractive as they once were. One reason is that the interest you can earn on regular savings and certificates of deposit is appallingly low.
What’s the answer? Depending on your tolerance for risk, the amount of money you have to invest (or lock away), and other personal factors, some of the better choices include holding at least a portion of your wealth in cash, opting for high-yield stocks, eliminating credit card debt, allotting an amount to REITs (real-estate investment trusts), starting a small e-business, ramping up retirement accounts, taking a look at precious metals, and exploring the volatile world of cryptocurrency.
Here are some details about each approach for investors and consumers who want to get the highest possible return, in interest or ROI, on their assets in an uncertain economy.
Retirement Accounts
One of the most innovative things to do when interest rates are dismal is to ramp up your retirement accounts. Of course, there are limits to how much you can contribute each year, but make sure you at least reach the maximum on those. Then, after hitting your IRA ceiling, consider setting aside whatever is left in one of the other seven items on this list.
Real Estate
If you don’t want to get directly involved in the complex business of buying, owning, and managing real estate, consider REITs, real-estate investment trusts. These popular financial vehicles are ideal for people of all income levels because you can purchase as many or as few shares as you wish, based strictly on how much you want to allocate toward the RE market.
Stocks
Stocks, in general, are usually not a good play during a volatile or weak economy. However, there are several ways to cherry-pick certain kinds of shares for excellent results. Potentially, so-called “dividend aristocrats” and growth stocks are choices that can help you get through a tough couple of years.
Aristocrats are high-quality corporate shares that have a long history of paying regular dividends, which you can promptly reinvest directly into the stocks. Growth companies are entities that don’t pay dividends but offer investors the chance to take part in rising share values over time. Both kinds of shares are popular during sluggish financial times.
Cash
Cash is the default option for people who have almost no tolerance for risk. But, it’s often helpful to hold somewhere between 10 and 30 percent of your portfolio in cash if you think the stock market is approaching a major correction. That way, you’ll be able to use the cold cash to buy up bargain shares after the drop-off. Some of the world’s most well-heeled and famous investors use this tactic to their great advantage.
Debt Reduction
An economic downturn is an opportune time to eliminate any high-interest credit card or other debt on your personal books. Rather than earning interest on a portfolio, consider getting rid of those high card rates that are eating into your overall financial health.
Cryptocurrency and Precious Metals
If you like alternative investments, both crypto and gold (or silver) are apt selections when stocks are under-performing, inflation is rising, and the general monetary outlook is volatile. Both gold and crypto are forms of “safe haven” investments where people park assets during bad times.
E-Business
When the best interest rates you can find in traditional savings accounts, on bonds, and in CDs are hovering around the one-percent mark, starting a new small business can be a wise way to use the financial assets you have available. Don’t expect quick returns, but consider the big picture when starting an e-commerce business.
Many folks begin small as resellers or with digital products, like downloadable reports and specialty product reviews. In fact, one of the fastest-growing online business niches is in the review area. To get started, find a product line that you know a lot about and enjoy reviewing. Then, get busy posting objective, well-written, long-form reviews about the top sellers in the segment. Later, after you build up a solid readership, you can earn income by selling ads on the site.
The Bottom Line for Money Ideas in a Bottomed-Out Economy
There’s more than one way to skin a cat, as the old saying goes. Sometimes, it makes no sense to seek out passive, interest-bearing accounts like those offered at banks and S&Ls. Instead, try putting your money to work for you in creative ways that have at least a chance of turning a small investment into a worthwhile one.