Wealth management advice

How to start investing your money

Want to start investing your money, but don’t know what your options are?

1. If you buy a company’s stocks, you can then lay claim on a portion of its equity.

2. Bondholders issue a loan to an organization with a set amount of interest, and the borrowing organization promises to pay the bond back at an agreed-upon date.

3. An equity investment in a business involves you putting up a sum of money to own a portion of that business.

Investing is a great way to take the wealth you have and grow it passively. In most cases, it doesn’t require much work on your part.

Once you determine your investment strategy and begin investing, the money will start to grow. In simplest terms, it’s like establishing a garden or an orchard. Plant the seed and watch it grow.

Interested in ways to start investing your money? Below, we’ll tell you about some popular investment options and talk about how Herring Bank can help you get started.

Stocks

Stocks are a share in a company.

If you buy a company’s stocks, you can then lay claim on a portion of its equity, meaning you would own a portion of its assets and earnings.

There are two types of stock— common and preferred stock. Preferred stock doesn’t give any voting rights while common stock does, but preferred stock shareholders get paid dividends before common stock shareholders.

If you are a first-time investor, we recommend that you talk to a broker before making any moves.

Look no further than Herring Bank’s Wealth Management team! Our team of investing experts can help you can gain a better understanding of the stock market and help you develop a strategy that best fits your financial situation.

Bonds

Bonds are essentially loans made to large organizations such as corporations, municipalities and national governments.

Bondholders issue a loan to an organization with a set amount of interest, and the borrowing organization promises to pay the bond back at an agreed-upon date (while paying interest in the meantime).

People buy bonds because they can provide a predictable income stream through interest payments. If the bond is held to maturity (when the bond is due for repayment), bondholders can get back the entire principal, so bonds are a way to preserve capital while investing. Also, bonds can help protect the money you invest in more volatile stock holdings.

There are three main types of bonds:

Treasury Bonds – issued by the United States Government; considered risk-free.
Corporate Bonds – issued by corporations to fund a business-related expense.
Municipal Bonds – issued by states, counties and cities to finance public projects.

There are several factors to consider before deciding to invest in bonds. We recommend speaking to an experienced financial adviser to help guide your decision.

Equity in a business

Have you ever seen the show Shark Tank? Shark Tank is all about equity investments.

An equity investment in a business involves you putting up a sum of money to own a portion of that business. As the business grows, so, too, does your money.

Real estate

Buy the right piece of real estate, such as a home in an up-and-coming neighborhood, and that home will appreciate— meaning it will be worth more than what you paid for it if you decide to sell.

Many investors choose to invest in real estate because they like the amount of control they have. You can put as much or as little money into a house as you want. When you choose to sell, you name the price. Don’t like the offer, walk away and try again later.

Additionally, if it’s an investment property that you don’t live in, you can pull in monthly income from tenants. It’s a win-win but does require more money to start than the above investment options.

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Investment and Insurance Products are:

  • NOT INSURED BY THE FDIC
  • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
  • NOT A DEPOSIT OF OTHER OBLIGATION OF, OR GUARANTEED BY, HERRING BANK, OR ANY BANK AFFILIATE
  • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED