Intro to Common Investment Vehicles

When it comes to investing most beginners simply think of stocks or maybe they'll think of real estate as well. Surprisingly to most people, there are a wide variety of other investment vehicles that you can put your money into. Each varying vehicle offers different advantages to investors and keep in mind that not every investment vehicle is right for you.

First, stocks are one of the most common vehicles that investors will choose to invest into because they are very liquid, meaning that they can be turned into cash very quickly and easily. Not only are they extremely liquid, but they give investors a choice to invest into almost any company. Stocks generate a rate of return around 9% per year. Through dividends as well as supply and demand, investors utilize stocks as an investment vehicle very often.

Real estate is another common vehicle that brings in an average rate of return around 10%-10.5% per year. Unbeknownst to most, people can invest into real estate with very little upfront money. REIT's (real estate investment trusts) offer investors a chance to invest in real estate without actually requiring them to purchase any property themselves. Instead investors can invest into REIT's who will essential invest in real estate themselves. REIT's are traded just like stocks on the two major US exchanges. There are two main strategies when it comes to investing in residential real estate; you can rent out property or flip properties. renting out real estate provides income on a regular basis, while flipping houses offers a one time return.

Both bonds and CD's offer low risk and low return. By lending out your money to either the government or a bank, the institution will in turn pay you back in interest at a later date. These two forms of investments are very common, and there's a wide variety of them to choose from.

Of course there are an abundance of other vehicles that you can invest into, but these listed are a few of the most common and attainable. They offer accessibility, liquidity, and a good rate of return. Beginner investors are often limited to these few forms of investing due to their lack of capital. In future lessons we will divulge further into the logistics and strategies relating to these vehicles.