3 Risk-Averse Ways to Double Your Money
With interest rates as low as they are, many investors are taking on high risk in an effort to double or triple their money. Some are trading in cryptocurrency—a risk because Bitcoin’s value fluctuates daily and sometimes significantly during relatively short periods of time.
Trading options, too, are a fast way to double your money—or lose it all, as options can be lucrative but also quite risky. If you are looking to double your money over the long haul, with minimal risk, here are at least three good, risk-averse ways to do so.
- A 401(k) Match – Many employers give employees free money just for contributing to their own retirement account. If your employer is one of them, it doesn’t get any easier or lower risk to double your money than by taking advantage of your employer matched 401(k) account, using the plan’s tax benefits to grow your retirement savings.
- An S&P 500 Index Fund – Investing in a fund based on the Standard & Poor’s 500 index is one of the more attractive ways to double your money. While riskier than a bank CD or bonds, it’s less risky than investing in individual stocks. The S&P 500 has an attractive long-term return, averaging about 10% annually over long periods. That means that, on average, you’ll be able to double your money in just over seven years. That said, note that the index had a negative return during the 2000s, but made up for it in the 2010s, returning 252%, or more than tripling.
- A Home Purchase – Buying real estate isn’t a quick way to grow your money. Rather, it relies on slow-and-steady gains. But since homebuyers use a mortgage to make the purchase, and typically would be paying rent anyway, why not put that monthly payment into your own pocket? As an example, if you purchase a $200,000 home with a 20% down payment, then when your home increases in value to $240,000, you’ll have the original down payment of $40,000 back plus a capital gain of $40,000 for a total gain of 100%. In many cases, it’s possible to buy a home with as little as three percent down, and over time the home’s value will increase at the same pace.