For as long as I have been using the internet, I have been interested in learning how to invest money online. I know, there a million websites out there with their lists……… top 7………top 10 …….even top 50 ways to invest online. Have you seen any of them?
I have to say, I was pretty surprised at many of the recommendations and what some people consider to be investing.
Savings accounts for example. Really? Savings accounts?
Don’t get me wrong, I have nothing against savings accounts. But is it really an investment? No. It’s simply a place to store your money. A financial warehouse if you will.
In fact, interest rates is so low (at most banks) that the interest you earn won’t even keep up with inflation! That means that you will lose buying power by only keeping your money parked in a savings account. That is not what I consider to be “investing”.
Invest in yourself is another one. How cute and new agey. Of course you should invest in yourself in some way, but that is obvious. I don’t think you need to read a blog for that profound insight!
Buy, hold and pray is another popular strategy I see touted on so many of these lists. What do I mean by that? I am talking about handing your money over to a broker to invest it for you. Then, pray that they are better than you are at picking winning stocks.
The word “investing” has become synonymous with trading (stocks, bonds etc.), savings and even clipping coupons!
When I talk about investing, I am talking about taking a chunk of money and turning it into more money. Making your money work for you in other words.
I believe that is what most people are looking for and they are for whom I’m writing this article.
So, how did I go about choosing the “best of the best“?
I have a simple criterion.
- Are you paid to own it?
- Is it highly likely that you will get your original investment back?
So, without further ado, here are the best ways that I have found to invest money online.
- Peer To Peer Lending
- Tax Lien Certificates
- Buy An Existing Website
- Build An Online Business
Peer To Peer Lending
Peer to peer (P2P) lending or crowd funding is commonly found on financial type websites and for good reason. It doesn’t require a lot of capital to get started and you can help a budding entrepreneur expand their business. It’s a wonderful concept regardless of which side of the equation you’re on.
- Business owners no longer need to go to a banker, hat in hand, hoping for a loan approval.
- Lenders can earn a fair interest rate on their investment rather than the pathetic rates offered by banks.
The largest player in the P2P lending industry is Lending Club. Lending club has experienced exponential growth since its inception in 2007 and now offers many loan options. Even to purchase a car or a home.
I’m not sure I would lend someone money for a vacation………..yes, that is a thing!
Personal loans range from $1,000 – $40,000
Business loans range from $15.000 – $300,000
To get started lending, you need to deposit $1,000. You can invest in increments as low as $25 so you can really spread your lending dollars around if you choose. In fact, diversifying your lending portfolio would probably be wise. Unfortunately, not everyone repays their loans.
Want something a little more exciting?
Money Online Investment takes P2P lending and adds a virtual stockmaket element to their platform. Here, you are investing in a business project by buying virtual “shares” in the project.
To the right, you can see an example of one of the projects currently listed. Every project creator gives you a little background information on their company and what they plan to do with the capital invested.
This company wants to raise $60,000 so they have issued 20,000 virtual shares at $3 per share.
They also pay a monthly dividend of $.47 per share. That’s almost 16% monthly! Not a bad ROI right?
There is also an active marketplace where you can offer to sell your shares. Due to the fact that there are a good number of projects with outstanding shares, it may be tricky to sell your shares
So don’t tie up too much money in them if you think you might need it soon. Just enjoy the high yields!
You can start investing at Money Online Investment for as little as $2 and they even accept crypto currency!
DRIPs are Dividend Reinvestment Plans. I mentioned earlier that trading stocks didn’t fit my criteria of investing, but buying stocks that pay dividends does.
The idea of DRIP investing is that you buy stocks directly from a company bypassing brokers and their commissions and rolling over your dividends into more shares.
This is a long term strategy and it won’t put money in your pocket soon, but it beats paying commissions every time you purchase a stock. Those saving can really add up over time!
Tax Lien Certificates
When a homeowner fails to pay their property taxes, the county in which the property lies creates a tax lien against that property and sells them to investors. Many tax lien auctions are still held in court houses where you are required to be there in person, but the “left overs” can often be purchased OTC or even online.
There is a bit more leg work involved when investing in tax lien certificates but the interest rates are pretty high in most states.
You will definitely want to educate yourself before jumping into these. I would suggest learning from a professional tax lien investor.
Buying A Profitable Website
How cool would it be to own a portfolio of profitable websites? THIS will most definitely be a part of my retirement plan! Websites don’t require much maintenance and what they do require can be outsourced cheap!
Flippa is one of the better known website auction/marketplaces. At Flippa, you can buy aps, aged domain names and even income producing websites.
Website sellers post all of their traffic and income stats and every seller even gets feedback ratings (like eBay).
Some people even buy websites, throw up some affiliate links to increase revenues and then flip them for huge profits!
Build An Online Business
In my humble opinion, there is no better investment than building a business of your own. Did you know that you could start building an online business in less than 5 minutes from now before you invest any money? You can!
What kind of business? That’s really up to you.
Is there a certain category of products or services that you love?
What about your hobbies or passions?
You can build an online business based on almost anything!
I know people earning over $10,000 per month from their part-time online businesses and they got started with my #1 recommendation.
What’s missing? What online investing methods do you think should be on this list? Let us know in the comment section below.