3 Low-Risk Investments to Tap into by Receivables Performance Management Reviews
When is a good time to invest your money? Anytime is a good time, but generally, the sooner, the better. Here, leading accounts receivables management firm Receivables Performance Management reviews some of the investment options that you can consider if you're eager to start saving for your retirement but you're a little wary of parting with your hard-earned cash for fear of incurring losses instead of gains.
First off, readers are reminded that there is no risk-free, 100% safe investment. Any type of investment involves a certain amount of risk. The key is identifying the risks and determining the level of risk that you're willing to take. If you would like your money to earn more than the annual interest given to bank deposits but you're not particularly keen on high-risk investments like high yield bonds, REITs, or dividend-paying stocks, there are a number of low-risk investment tools that you can tap into. Receivables Performance Management reviews three low-risk investment options below:
Mutual Funds
Mutual funds are a type of investment that involves pooling together money from different investors. These are then invested in stocks, bonds, money market funds or short-term debt. Two factors make mutual funds attractive to investors with low risk tolerance: small minimum investment requirement, generally between $500 and $3,000, and liquidity or the option to redeem their money at any given time. They may redeem only a portion of it, take out the accumulated interest only, or completely close their investment account. Since this is a low-risk investment, you can also expect low returns.
401(k)
Receivables Performance Management reviews the 401(k) retirement plan and here's what you need to know. First, it's employer-sponsored, which basically means that the employer becomes your investment manager. With this type of investment, a percentage of the employee's salary goes to the 401(k) retirement savings. In some instances, the employer may agree to "match" the employee's contribution, contributing a certain amount as well into the employee's 401(k) funds. As of 2017, the maximum joint contribution of employer and employee is $54,000 per annum.
Unlike mutual funds, however, 401(k) isn't as liquid. There are federal restrictions regarding withdrawal of funds, particularly if the account owner is still an active employee and has not reached retirement age yet (or aged lower than 59 ½ years old). This should be regarded as a plus instead of a minus because you're assured of retirement savings that can give you a comfortable life during your retirement years.
P2P Lending
Peer-to-Peer lending is a type of lending service that offers loans to individual borrowers where the loan is sourced from the pooled funds of investors. There are P2P platforms that you can join, and usually, they require a minimal amount of investment—as little as $1,000. The rate of return varies, but in general, you could be looking at a 6% return rate.
Since P2P lending is a type of unsecured personal loan, there are risks involved. It would be best to study all your investment options first before resorting to P2P lending.
These Receivables Performance Management reviews are for your general information and reference only. Consult a professional financial advisor or personal investment strategist to find out which instrument is best for you.
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