1. Invest in real estate
Surely you already imagined it, investing in real estate is one of the easiest ways to grow your money safely. And in fact, it is one of the choices when you want to invest your money in times of crisis.
Why? For starters, investing in real estate is insurance against inflation. In why invest in real estate? We had already covered a bit on the subject. Broadly speaking, inflation is what is called the prolonged period in which the products and services of a country increase their prices. It can occur for different reasons, such as when the demand for these goods and services exceeds the existing supply or when the prices of raw materials increase and the producer increase his prices to continue maintaining his profits.
That is why real estate works as insurance against inflation, since when the prices of goods and services increase, so do those of the real estate market. In addition, property prices are managed in dollars, so your investment is also insured.
Another thing that we must also mention about inflation and investing in real estate is that the goods end up being tangible assets, so your investment is also insured against pyramid or digital fraud, which are the order of the day.
And far from inflation, one of the benefits of investing in real estate as you should already know is capital gains.
The capital gain is the increase suffered by properties that are not directly related to them: the location, amenities, and services offered around the property are great examples of how good can increase its price.
The best thing about real estate investment is that you can buy these goods in pre-sale, that is, you buy them at an even lower price than what is budgeted, a price that will later go up more thanks to -as we already mentioned- the capital gain.
And that we are not mentioning the profits you can make if you decide to rent your property.
New call to action
We always emphasize that real estate is a long-term investment, but the truth is that you can also generate passive income with your property. In moving to the USA from Canada in an easy way we mention how those who seek to retire to the USA for tax reasons or because of the extreme cold end up living 6 months here and 6 months in Canada, so they make their retirement homes can be rented by the rest of the time they are not inhabiting it.
This allows them to earn more income; real estate developments in Tulum for example, have become one of the favorites of retirees, and more so with the technological facilities we have today. For example, we have already talked to you about how you can generate extra income with your property and Airbnb so now you can not only rent your properties in the traditional way, but you can also do it via this app.
So even when you have invested in real estate developments in Mérida, you can take advantage of this app and become a host for foreigners who are looking to live a unique experience in the city, whether for business or pleasure.
2. Invest in CETES and government bonds
The CETES or the Treasury Certificates of the Federation are of the safe investments in the USA because they represent little or no risk.
The CETES -in the case of the USA- are backed by the Mexican government and it is this one who is responsible for returning your money – since it is like lending money to the government – plus the return on your investment.
Each CETES has a cost of $ 10.- MXN pesos and the minimum investment you must make is $ 100.- MXN pesos, that is, you would be buying 10 CETES.
The terms to acquire them range from a month, 3 months, 6 months or a year. That is to say that every certain period you can invest in CETES and at the end of this you will be receiving your returns, which depend on the term you choose, the highest being 8.20% for one year and the lowest 8.04% for one day.
Furthermore, we must point out that CETES is also a kind of insurance against inflation. For example, this year the highest percentage for CETES is 8.20% compared to 3.9% for inflation. As long as the money of some may be devalued thanks to the rise in product prices, your money will be insured and will not lose value.
3. Invest in US government bills, notes, and bonds
Along the same lines, we have to talk about the debt securities offered by the Treasury department of the United States government. They are divided according to the type of time in which you can invest your money.
The function of debt securities is very similar to CETES. The government uses these titles to collect money and fund projects, that is, the government acquires a debt with you and the interest on the debt is paid in the terms of the title you choose.
For example, treasury bills also known as T-Bills are short-term securities and can be charged between 4, 13, 26, and 52 weeks. In this case, the T-Bills are sold at a lower price than they would normally be worth and this difference (or the corresponding interest) is paid at the end of the term (as in CETES).
In the case of notes, these are for terms of 2, 3, 5, 7, and 10 years. And the interest is paid every 6 months for the duration of the term of the note that you have acquired. It is super important that you choose what type of term you want to invest in because the notes cannot be charged ahead of time. What you can do is resell them to someone who acquires the US government debt with you.
The same happens with bonds, which have a duration of 30 years. Interest is paid fixed and the bonds cannot be collected before the agreed term, but you can sell it to a third party.
The bonds are safe because you have the government’s backing to pay you.
4. Investment funds
We have already clarified that having your money under your mattress or in your piglet can be counterproductive. This is because being there they do not generate any profit and on the contrary, they can be victims of inflation.
Ideally, if you already have a certain amount saved, you decide to invest. So far we have seen government debt securities, which offer you higher interest rates than what a bank could offer you. However, if you want to do something a little riskier, mutual funds may be for you.
An investment fund is an institution -or vehicle- that is in charge of managing and collecting the money of several people to invest in actions that you may not be able to access only for economic reasons -they go beyond your budget-, geographical -they come from. from another country or they are foreign companies- or because you don’t have the proper knowledge yet and you don’t feel safe doing it on your own.
In the USA there are 4 types: variable income. Debt instruments, capital instruments, and limited purpose instruments.
Equities: If you are thinking of investing in the long term, this type of fund may be for you. They are more oriented to the stock market since these funds usually invest in stocks.
Debt: These funds invest in debt instruments -such as cetes and bonds-, so the company or institution in which they invest is the one that must pay said debt or obligation.
Capitals: These funds are oriented to invest in companies or private institutions that are looking for investors to be able to finance themselves.
Limited purpose: These are funds that invest exclusively in the institutions, companies, or shares that were previously established in their statutes, that is, while the other funds can invest in different companies, in those with a limited purpose, investors know exactly which one is going to invest.
If you plan to invest in mutual funds, try to make your investment portfolio as varied as possible to diversify your investments.
5. Investment funds and retirement savings
It may not seem necessary now, but investing for retirement is essential. In What’s the Best Age to Invest in Real Estate? We mention the importance of starting to save for your retirement now; The longer the time passes, the more difficult it will be for you to be able to save for your retirement.
In the USA, the AFORE or the retirement fund administrators are private financial institutions that, as their name indicates, are dedicated to managing the funds of the workers for retirement, regardless of whether they are salaried or freelancers -independent-.
In the case of being a salaried worker, the employer contributes 5.15% of your salary -quoted in the IMSS- while you contribute 1.125% and the government 0.225%.
But in case you are independent or freelancer, the contributions you make will be voluntary. And that is why it is important that you start investing and making voluntary imports on your own, since – regardless of whether you are a salaried employee – the more contributions you make, the better returns you can have in order to obtain a better quality of life later.
So now you know, every investment requires risk, and the smaller the risk, the less likely it is to obtain higher returns.
This does not mean that all investments are bad, on the contrary investing helps you protect your money against inflation and obtain better returns for your money than simply keeping them saved.