Top 5 Investments in 2023
Sorry to break it to you, but you can’t work your way to financial freedom.
You’ll need some rest, and investments are one of your best chances of earning while you get some shut-eye. And no, the guy in a fancy suit on Instagram posing with a supercar and some Instagram models in the background won’t teach you how to do it in his “course.”
Do you know why that is? Because there’s no generally right way to invest. Your best investment depends on your goals, time horizon, and risk tolerance. So, based on these considerations, this article discusses the top five investments in 2023. Come check them out!
1. High Yield Savings Account
Instead of tying your money down in a traditional savings account where you get little or zero yield on your savings, a high-yield savings account is a safer and more promising investment vehicle in 2023. A high-yield savings account is a special account offered by banks, online lenders, and credit unions for saving money at a higher interest rate than traditional savings accounts.
As of August 2023, the interest rate on a traditional savings account is 0.37%, according to the Federal Deposit Insurance Corporation (FDIC). On the other hand, a high-yield savings account offers north of 4.87% Annual Percentage Yield (APY) on average.
Miles apart, right? It gets better.
You can’t lose your money when you invest in a high-yield savings account so long as you’re using an FDIC-insured bank or National Credit Union Association (NCUA) insured credit union. These organizations insure member financial institutions up to about $250,000 per depositor. However, you risk losing purchasing power even though your deposit is intact if the current inflation rate exceeds your account’s APY. Nonetheless, this investment vehicle is perfect in 2023 because the Federal Open Market’s committee is increasing federal fund rates to combat inflation. This means that financial institutions must also increase the APYs of their savings accounts.
High Yield Savings Accounts are suitable for individuals looking to build emergency funds or stash some money away for goals like getting a new car, educational expenses, or any other capital-intensive endeavor. At the same time, it allows you to access your money when you please. The best of both worlds!
If you’re buzzing and already looking to get involved, you should compare multiple options based on their interest rates, deposit fees, and account requirements. Some of the best ones include CIT Bank’s offering with 5.05% APY, Milli Savings Account with 5.25% APY, and Bask Interest Savings Account with 5% APY.
2. Crypto Presales
How would you like to own millions of units of the next Bitcoin? And at hugely discounted prices too! That’s what crypto presales are: High-risk, high-reward cryptocurrency purchases that let you get in on the good stuff early before the public finds out about them after they officially launch.
In truth, you’re not guaranteed to make money through crypto presales due to the high volatility of the crypto market. But if you find a project worth investing in and do so early, you could be in for huge profits.
In 2023, projects like Wall Street Memes ($WSM), Bitcoin BSC ($BTCBSC), TG Casino ($TGC), etc., are experiencing a growing presale as they are some of the most exciting projects in the market. The hype around them suggests that early investors might be making huge profits soon. For instance, Wall Street Memes, whose token sale launched on May 26, has already raised more than $25 million. Nonetheless, the fact that many people believe in it doesn’t guarantee its success. So, doing your own research before getting in on any crypto presale to boost your chances of making profits is advisable.
3. Certificates of Deposits
Investing in a Certificate of Deposit (CD) means agreeing to keep a lump sum in a financial institution’s savings account for a set duration without withdrawing it so that you can receive interest after the set time. You’ll be liable to pay a penalty fee if you withdraw this money before the specified date.
So it’s a lot like a high-yield savings account except that you can’t touch the money, making them excellent options for individuals who don’t mind tying up cash for a while to gain interest. And just like a high-yield savings account, you run a risk of making a loss on your investment if a lower rate is offered when you want to reinvest after maturation or if inflation rates rise. They are efficient and safe options for earning on your savings without taking on market risk or volatility in that the FDIC or NCUA insures them up to $250,000 per depositor.
Choosing the right CD for you requires checking on the terms, including the duration for keeping the money, the interest rate (including details on whether it is fixed or variable), and the penalty fee for early withdrawals. The longer you’re willing to keep the money away, the higher the interest rates. Retirees looking to save for their children are ideal customers.
4. Dividend Stock Funds
Despite 2023’s soaring inflation rates and looming recession, some companies are bound to end their financial year in the green. Owning a piece of these kinds of businesses is a sure way of getting regular income through dividends. You can do this by investing in dividend stock funds — classic equity funds that invest in a diversified portfolio of higher-than-average and/or rising dividend-yielding stocks. Basically, it means investing in companies that are sure to yield dividends so you can get a share of the profits.
You need to consider this if you’re looking for a steady income stream. How much you get depends on how much you invest and how long you invest, but one thing is sure: you’ll get dividends. Still, to make it worthwhile, it is advisable to confirm the company’s reputation and check if it has a good history of profit-making before investing.
Any brokerage account that sells exchange-traded funds (ETFs) and mutual funds in the stock market can offer you dividend stock funds when you decide.
5. Real Estate / Rental Housing / Real Estate Investment Trusts (REITs)
It’s almost impossible to go wrong with real estate, the original “old money” investment.
If you have a lump sum lying around and the luxury of letting it grow for extended periods, real estate might be the right call for you. It’s been around for a while, yet is still valid in 2023. You know what they say about land; it’s the only thing that lasts. So, outrightly buying a property, or financing one and then maintaining it and dealing with tenants, has a high chance of generating dividends in the long term.
But, it is expensive and highly tasking.
Fortunately, you can still invest in real estate with less money through Real Estate Investment Trusts (REITs). These real estate management companies own, operate, and manage a pool of income-generating real estate. Investing in them allows you to get passive income through dividends from rents and any other property income stream. The best part is that you don’t have to worry about down payments, related fees, and property maintenance responsibilities as with rental housing because the company does everything for you. You can get in on this through real estate brokers or a brokerage account with publicly traded REITs like stocks.
Some established REITs to consider in 2023 include Prologis Inc. and American Tower Corp.
