When building wealth, it’s crucial to consider the right assets to help your money grow. In 2023, several options worth exploring can provide you with attractive returns and financial security. Let’s delve into three key assets that you should consider adding to your investment portfolio.
High-Yield Savings Account
In recent years, high-yield savings accounts have fallen short in terms of providing significant returns. However, the tides are turning. These federally insured accounts offer interest rates significantly higher than the national average. Depending on prevailing market rates overseen by the Federal Reserve, you can expect to earn around 3.00% APY or even more. In stark contrast, the national average interest rate for savings accounts is a mere 0.07% APY. By opting for a high-yield savings account, your money can grow faster without any additional effort on your part.
Dividend Stocks and Stock Funds
Investing in dividend-paying stocks is an excellent way to generate consistent earnings throughout the year. These stocks typically come from mature and established companies that have excess cash flow. By distributing dividends to shareholders, these companies make effective use of their funds. Blue-chip stocks, renowned for their consistent earnings and regular dividend payments, are sought after by many investors, particularly those using beginner-friendly stock trading apps.
Bonds and Bond Index Funds
Bonds, often discussed in conjunction with stocks, offer stability and predictability. When you invest in bonds, you essentially lend money to the government or a corporation. Unlike stocks, the return on bonds is smaller but also lower risk. Longer-term bonds tend to have higher interest rates to compensate for holding the debt for a longer duration. However, you have the flexibility to choose bonds with different terms based on your investment goals. Whether you prefer shorter-term bonds or wish to invest in government, investment-grade corporate, or high-yield bonds, this asset class can provide stable income with yields ranging from 1% to 8%.
By diversifying your investment portfolio with high-yield savings accounts, dividend stocks, and bonds, you can establish a solid foundation for building wealth in 2023.
These assets offer attractive returns while balancing risk, making them suitable for investors seeking financial stability and growth. Remember to conduct thorough research and consult with a financial advisor to make informed investment decisions aligned with your goals.
