If you really can’t afford to lose money, you might be afraid to invest it. After all, millions lost their hard earned money in the recent financial crises. But you also know that parking your money in CD or saving account that earns just one or two percent a year can be a financial suicide.

In this article we’ll give you tips to grow your money even if you hate the thought of taking investment risk. There are so many ways to beat inflation and increase your money in the long run.


What Investments Should You Buy?

Once you decide to invest, there are two ways you can make money: you can either be a loaner or a owner. In other words, you can loan money by investing in bonds or making private loans to companies or individuals.

You can also own assets that you expect to increase in value in near future. Gold coins, real estate, stocks, your own business, or artworks are some examples of investing with an expectation that their value will increase over time.

There are so many ways to invest outside the financial markets. However, starting your own business or becoming a real estate investor requires a certain amount of time, expertise, and money-not to mention that disposing off these investments can take years.

So, for many financial markets still offer a much more economical and convenient way to put aside small amounts of money on a regular basis.

8 Ways to Invest Money without Incurring Losses

1. Realize that Not Investing Is Risky

If you don’t want to invest your hard earned money in markets, remember that parking it into your saving bank account is risky too. The reality is that you’ll need more money for peaceful retirement that you think because now people live longer and with reduced Social Security benefits in the future, you will need more money. Investing in stocks may be the only viable way to accumulate enough money to last as long as you live.

2. Outpace Inflation

For long-term financial goals, such as paying for a child’s education or retirement, inflation can easily spoil things. Historically, it’s been around 2 percent, which means that you’re making just 2 percent in a CD or bank account, your money is actually losing its purchasing power.

For many, investing the same amount in stock funds and stocks is the best way to keep up with inflation. Since value of stocks can go down or move up at any time, it’s also the riskiest investment but offers highest possible returns and have consistently paced inflation since the 1950s.

Make sure you’re making the right moves-from planning your retirement, finding highest yielding bank accounts, buying real estate, saving money on taxes, using latest financial technology, and lots more.

3. Consider Why You May be Risk-averse

According to a recent report in Money Magazine, people under 40 who’re willing to risk their money have declined. Now it’s no more the case that younger people can take more risk than older guys! This report notes that younger people who’ve just started investing have only seem turbulent financial markets, and therefore, they don’t prefer the idea of investing and would like to keep most of their money in cash.

It’s important to note that taking financial risks, including losing some part of your investment in the short-term, may be required to meet your long-term financial goals.


4. Diversify

Even though you can get better returns from stocks, but it’s better to reduce your risks by spreading your investments. You can invest in share of funds that own bonds, commodities, or real estate, in addition to wide range of stocks, so you can easily manage risk by finely spreading it out among multiple investments. In this setup, even if one investment seems to be a loser, you can still count on other winners.

5. Remember Time Is Your Friend

The most important part of making your money grow is to take advantage of time. People in twenties may shy away from investing these days, but they’re actually most suited for owing relatively risky investments like stocks. That’s because they have lots of time to recover from market setbacks.

The longer your time horizon, the lesser market risk is a factor. So if you’re waiting for Dow to hit 16,000 or for significant signs of market stability, you’re losing time and this could prove costly in the long run. The longer you wait, the more growth you miss! It’s a fact that time is a secret sauce that actually allows your investment to multiply, due to long term effects of compounding interest.

6. Start Investing in Small Amounts

To gain sufficient confidence in your investments, don’t be rash. Start by choosing investing vehicles that have performed excellently over the past six to eight years and start buying small amounts on a regular basis. If you don’t have any experience, you can consult your broker, as your benefits administrator at work, or get some ideas from investment magazines like Kiplingers or Money.

7. Make Appropriate Investment Choices

The markets offer you a massive selection of funds and securities that are just right no mater your appetite for risk.

Whether you’re interested in bonds or stocks, there’s a range of risk within each of these two categories. For example, junk bonds that are poorly rated pare riskier than bonds that are issued by federal government. And aggressive growth stock funds are more risky than income stock funds.

So saying that financial markets are unstable and too risky for you is just like saying there’s nothing to eat at restaurant. The markets offer a massive selection of funds and securities that are just right for you no matter what your appetite for risk.


8. Don’t Monitor Your investments Too Closely

It’s very easy to get spooked if you’re constantly obsessed over your investments. If you want to build wealth over a period of time, what your investments do on day-to-day basis is irrelevant. Instead, you should monitor your quarterly or monthly investment statements to stay on the top of their performance.

What really matters now is how much they’ll be worth in next 20, or 30 years from now when you really need to spend your money. You definitely want to see a trend of growth, but some years may definitely give you a temporary setbacks.