7 Surefire Investments You’ll Thank Yourself Later | Smart Change: Personal Finance

(Selina Marangian)

The Cambridge Dictionary defines “investment” as “to put money, effort, time, etc. into something to make a profit or gain an advantage, or to use money, effort, time, etc. in doing so.” This seems like a better definition than those who refer only to money, as there are certainly other types of investments. The time invested in your children can pay off well, for example.

Here are seven types of investments that will likely pay off well for anyone who makes them. Find out which one(s) you want to start (or continue) making.

Image source: Getty Images.

1. Health

Yes – your health. It’s one of the most important things for each of us, and neglecting it—which is so easy when we’re busy and stressed—can have serious consequences. On the flip side, taking care of our health, such as eating nutritious food and exercising, can pay off well.

Good health can lead to a longer life, and may be less complicated by pain and other problems. It can mean a happier life. There is also a financial angle: the healthier you are, the less you will spend on health care throughout your life.

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2. Debt reduction

Then, invest some money in paying off any high-interest debt, such as debt from credit cards, which often charges people 20% or even 25% or more annually. If you hold, say, $30,000 in debt and 20% are charged, you lose about $6,000 on interest payments each year. Debt with low interest rates, such as a mortgage or a car purchase, is not a problem.

3. Knowledge

Here’s another vital investment you can make in yourself: Spend plenty of time reading and learning. It doesn’t have to be all about finance either. In the world of finance, consider reading articles and books about major investors and big companies. You can learn about profitable investment strategies from the previous and how to discover the most promising investments from the second.

4. Index Funds

When it comes to actually investing money, relatively few will do better than those who keep pouring dollars into one or more low-fee broad market index funds, such as funds that track the S&P 500. Do it and you’ll do it quickly. You have a stake in 500 of the The largest US companies, and you will earn returns close to those in the stock market in general.

The stock market averaged annual gains of about 10% over long periods. You may earn more or less than that, though, depending on your investment period. Here’s what you could accomplish if you invested hard over time and achieved an average return of 8%:

grow by 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

5 years

63,359 dollars



10 years




15 years



586,486 dollars

20 years




25 years




30 years




Data source: author accounts.

5. Stock Dividends

You can also add some dividend-paying stocks to your portfolio, as they can do well over time – and most of them will continue to pay you even when the economy collapses. Take a moment to appreciate what they also do: Additional cash will be regularly deposited into your investment account. Do you have a portfolio that is worth, say, $300,000, with a total dividend yield of say 3%? This means that about $9,000 will appear in your account each year. Even better, healthy, growing dividend payers will increase their payouts over time as well—so that $9,000 becomes $12,000 in some years, and $15,000 after a few.

Note that many index funds will also pay a dividend, if the shares you own do so. The SPDR S&P 500 ETFs (NYSEMKT: spy)for example, recently yielded 1.4%.

6. Stock growth

To achieve a rate of growth steeper than that offered by the stock market in general, consider adding some growth stocks to your mix. They belong to companies that are growing at faster-than-average rates, many of which have the potential to generate large double-digit gains over many years. (Not all growth stocks will work, though — so consider following the Motley Fool’s investment philosophy, which suggests owning 25 or more shares, with the goal of holding them for at least five years. This can give the higher-value stocks a reasonable chance To grow — or to fall and recover.

7. Memories

Finally, don’t spend All Take your time to work and try to improve yourself. Make time to enjoy the fun activities you love, and make time for your loved ones. Creating memories with friends and family members is also a great investment.

Be a good investor – invest in yourself, in your health, in others, and in the stock market. It can lead to a rich and fulfilling life.

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Selena Marangian does not have a position in any of the stocks mentioned. The Motley Fool does not have a position in any of the stocks mentioned. Motley Fool has a disclosure policy.

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