Best Ways For 12 Year Olds To Make Money

How to Make Your Money Grow

CC0/geralt/Pixabay

If you're thinking about making a few small investments for short term or long term profit, you're probably asking yourself where you should put your money and how you should invest it. Whether you're saving for something specific like retirement or trying to make your savings work harder for you than they do in a bank, you'll need to invest some of your time, thought and effort before you put any cash into this project.

Savings Account

Whether you're saving for retirement or to buy something essential, you'll want to do so safe in the knowledge you're not risking your nest egg, which is why we suggest that you put it into a high interest savings account. That's the safest way of making money from money, but you won't get much in return. According to the U.S. Bureau of Economic Analysis, the personal saving rate in America is just 5.7%, which means that $5.7 out of every $100 made in America is being set aside for things such as retirement. That's probably because the returns are not as good as they are with other investments.

Stock Market

The stock market represents the other end of the investment spectrum. This is normally a high risk but high reward way of making money. You can play the stock market on your own or you can get someone to manage your portfolio. A broker is the best way of making money from the stock market, and using a stockbroker is also the best way of learning how the market works. Although a broker doesn't come cheap, you'll have an expert in your corner.

The Best Way to Invest

Have you heard of peer to peer lending? If not, let's outline it for you. This type of investment makes you the bank handing cash out to individuals. Your money isn't being loaned directly to one man who might not be able to pay back, instead each borrower accepts hundreds or even thousands of small loans that are something like $25 to $50 each. This means that the lender is only risking a small amount on each borrower. The best thing with this sort of investment is that the lender typically gets upwards of six percent return on their dollars.

Real Estate

Putting your money into property remains a safe way of making money but there are downsides to this. Who wants to become a landlord or pay out some of the rental income to a firm to manage the property for you? Owning a physical property with all that entails is not attractive to someone who wants to invest a little money but doesn't have the time for a second job. Thankfully you can invest in real estate notes instead. Buying real estate notes makes you an investor in a property or a portfolio of properties so you get a dividend or interest on your investment.

Gambling

You could always go to Vegas and put all your money on black. That's a surefire way of losing your investment. However, if you don't put a lot of thought and effort into investing, that's what you'll be doing with your hard earned money. You could use your money on yourself by investing in your career. Going back to college is an option if you have savings and you have an ambition that's never been fulfilled.

Diversify Your Portfolio

Businesses have been diversifying for decades now in the hope that they will always be operating in a successful marketplace. It's a piece of financial advice that individuals need to listen to as well. If you put your money into lots of different types of investments, you'll achieve some short-term, some medium-term and some long-term dividends on your money. If you have all your cash locked up in shares you know will come good in the long run, how will you pay for an emergency at home? Making your money work for you should be the aim, so in addition to making a profit on investments, make sure you have some money set aside for emergencies.