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8 Low-Risk Investments With High Returns - YouTube
Channel: Wealth Hacker - Jeff Rose
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what's going on y'all welcome back to
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the channel wealth hacker labs as you
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can see we have another special edition
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of the wealth board and today as you can
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see we are talking about investments
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that give us high return with little to
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low risk but the one thing you have to
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realize is that risk is relative so what
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is risky for you may not be risky for me
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what is risky for me vice versa and for
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me the one of the ways I've always found
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this out with working with clients and
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just talking to people that are wanting
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to invest and understand what risk means
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is you've got to quantify it
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you have to figure out what does that
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mean dollar wise so if you're investing
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$100,000 and you say that you can
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stomach a lot of risk like you don't
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mind risk you just want to put all your
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money into risky investments and yet if
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the market is down or if your investment
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is down say 20% so that you lose $20,000
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like now we're talking real money and
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that's one of the simple ways that I
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have quantified for people trying to
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understand like what is risk and how is
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that relative to them all right so that
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being said we're going to take a look at
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eight different investments that can
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offer you high return with little to
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little risk and once again risk is
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relative and we'll talk about that as we
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look at each of these investments but
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the first one as you can imagine the the
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first few are going to be somewhat
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boring but the first one that we have
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are high yield savings you can throw
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high-yield checking in there I mean
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typically as you can see I mean that's
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not going to pay you a lot of money
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I've talked about this on another wealth
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board video but right now you can expect
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to make anywhere between 1.8 may be
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honest hide 2% on some high-yield
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savings one of the ones I mentioned
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before is goldman sachs has their marcus
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savings account currently paying at the
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time this recording about 1.9 percent
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and then you have robhinhood oh they
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don't it's not so much the high-yield
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savings but they have their cash
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management program that's paying once
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again at the time of this recording
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about 1.8 1.8 5 % and there are several
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others out there that are going to pay
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you something similar so yes is that
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high return
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we'll compare to the point zero five
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percent that some banks are paying yes
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that is high return but not the 20-30
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percent returned that many people are
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hoping to make in the market so what is
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it looking at number two so number two
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we are looking at short-term bonds and
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once again these are not super sexy
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they're kind of boring but they're gonna
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they can pay a little bit more and
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there's a few different ways that you
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can go about this and when I first
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started in the industry as a financial
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planner many people bought short term
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individual bonds so we're talking short
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term corporate bonds like three to five
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years they're typically weren't muni
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bonds that were short-term but it could
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have been you know government bonds like
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Fannie Mae Freddie Mac those tight bonds
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in that three to five year range you can
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also buy mutual funds mutual funds have
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short term bond funds that you can buy
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you can also buy short term bond ETFs
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and I would say these are probably the
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more popular options that you're going
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to see nowadays so some of the options
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that you can buy shares has their short
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term bond fund vanguards got a few short
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term bond funds so I'll give you one
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symbol that you can take a look at it is
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B I V so that is the Vanguard
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intermediate term bond fund and at the
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time of this recording once again is
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paying you about 2.5 2% so yes a little
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bit more than high-yield savings not a
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lot more you are I'll say tying up your
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money's not like we're putting money
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into a CD but you can still stand to see
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some risk because so if we see some move
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and interest rates if interest rates
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start creeping back up you may see a
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small dip in your principal so please
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keep that in mind so those are the first
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two options that we're looking at the
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third option are tips
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and no we're not talking if you are a
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server or waitress/waiter at a
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restaurant and getting those tips if
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you're a valid driver we're not talking
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about those type tips we're talking
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about Treasury inflation-protected
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securities so typically with these are a
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few different ways you can get these as
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well you can go
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by them on line at Treasury dot-gov
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typically there are going to be released
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in 5 10 30 30 years now you're going to
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tap your money or for 30 years I don't
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think I'm doing that with a tip I'm just
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saying especially right now with low
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interest rates and you could also buy
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there are ETFs that you can buy there
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are mutual funds that you can buy so
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there are several different ways that
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you can buy it but right now interest
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rates really on these aren't all that
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impressive you're still looking at that
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one half to 2% range of paying a how
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long that you tie it up for there was a
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time that these were more impressive
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they are meant to keep up with inflation
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so there's that obviously you got the
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backing of the government and however
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you want to however you feel safe with
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that you know there's some people like
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no that is not safe the other way you
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know it is backed by the government so
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that is an option that can give you high
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return with basically no risk
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alright the fourth option now we're
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talking about options that are probably
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a little bit more exciting
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we have dividend paying stocks now we're
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talking get into the stock market try to
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make some money making that money
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investing the stocks but we are looking
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at dividend paying stocks so for those
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aren't familiar with a dividend if a
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company reaches a point where they are
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cash solvent as a reward to these
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shareholders they can pay in the form of
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a dividend you know you have two
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different ways to make money in the
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stock you have appreciation you buy
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stock for $10 it goes up to 20 that's
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appreciation you also have the dividend
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so here are some examples of some
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dividend paying stocks that you can buy
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you know typically you're looking at
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stocks in the energy and utility sectors
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typically those Hauer not always but do
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have some stocks they're going to pay
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higher dividends but just some examples
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you may be from there with you've got
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Chevron currently paying about it's a
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3.93 percent and then Verizon can you
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hear me now can you hear me now can you
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hear me now can you hear me
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can you hear me now do you hear me now
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now Verizon currently paying about 4.15
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percent so that's pretty cool right so
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you're putting money in the stocks and
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even if the stock doesn't make any money
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you if it you buy it for $20 a share and
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it stays at $20 a share for the entire
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year you didn't make any money on the
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appreciation part but you did get paid
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in the form of a dividend so another
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strategy that's with this strategy
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dividend paying stocks is that you can
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look for stocks and there are a few
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different names for this but one common
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name that you'll hear are the dividend
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aristocrats so what is that so basically
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that is looking at stocks that have a
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history of not just paying a dividend
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but also increasing their dividend over
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time and I was looking up just
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researcher for this video and I found a
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list on Kiplinger's I think it was 15 or
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16 stocks that have never decreased
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their dividend in like the last 55 or 65
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years I'll have a link to that article
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in the show notes so you could take a
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look at that but just some examples of
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companies that have not only paid a
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dividend but have never not paid a
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dividend or cut their dividend some some
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big companies you are probably familiar
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with Johnson & Johnson is one J&J and
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then they got coca-cola coca-cola
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classic and right now so their dividends
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are paying Johnson Johnson is 2.6
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percent and then coca-cola is 3.5% it's
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not that bad right we've got stocks that
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not only pay dividends but have a
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history of increasing that dividend so
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you're just increasing that paycheck
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that you're getting now I do have to say
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Q the editor put the disclaimer at the
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bottom here past performance does not
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guarantee future results so just because
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they've always increased their dividend
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doesn't mean they're always going to but
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nonetheless it does it still gives you
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some peace of mind knowing that they
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have a solid history of doing so alright
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moving on to number five we do have
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stocks again but a different type of
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stock we have preferred stocks so what
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is the difference of a preferred stock
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as opposed to some of the dividend
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paying stocks I was talking about before
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well so these
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the stocks is what we would call common
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stock and with the preferred stock they
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do have some VIP status when it comes to
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shareholders so with preferred stock you
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don't get any voting rights so you know
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if you are a shareholder and you buy
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coca-cola you're buying these stocks and
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you know you have voting rights but with
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referred stock you don't have voting
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rights but you do have access to those
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dividends so if a company is going to
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cut the dividends typically the common
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stockholders are gonna get their
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dividends cut first prefer stockholders
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are going to get paid first and a
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preferred stock is a hybrid between a
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stock and a bond debt of that company so
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if you kind of think of it like that
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like it's a it's a stock but it also
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pays a dividend typically it typically
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is going to pay a higher dividend than
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what you're going to see with other
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common stock and here's the other kicker
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too is that just as an example Alcoa is
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a company right now that if you buy
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their common stock there is no dividend
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so all you can hope to make money on is
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appreciation but if you buy the
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preferred stock right now I the coupon
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payment is five point three seven five
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percent so just under five and a half
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percent you're gonna get on the dividend
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payment from the preferred stock but if
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you own the common stock you get those
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voting rights but you don't get no
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dividend so however you want to slice it
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whatever whatever you're looking for a
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lot of people do like having that
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preferred stock just to get that
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reoccurring payment of that dividend all
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right moving on to number six number six
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are annuities woo if you are thirty
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years or younger watching this video
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don't buy an annuity you don't need
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annuity I don't care who's sell it to
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you don't care how much you like you
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don't want to buy an annuity it's not
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for you there are a few different types
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of new annuity that you can buy out
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there
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you'll hear fixed is what we're talking
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about here there's also the indexed
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annuities you got variable deferred I
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mean there are tons and tons of them I
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could do a whole other wealth board
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video on annuities and I may well do so
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because I see a lot of bad information
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out there but with the new teases oh
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let's just talk about fixed annuities
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right now a fixed annuity is similar to
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a CD and that you are guaranteeing a
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certain type of interest rate for a
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certain period of time but and there's a
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huge but and pls editor can you put a b
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ut really big right now but the big
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difference is that if you buy a CD from
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a bank and you decide to cash out early
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the only thing that you have to pay like
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your penalty is you are giving up any
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interest that you would have accrued
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with an annuity a buy from an insurance
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company you may be giving up your
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principal and that is a big difference
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we're not about giving up interest we're
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talking about giving a principal you
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don't want to do that you don't want to
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pay a surrender charge just to get your
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money back but that is typically the
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case for a lot of these annuities so
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please be careful make sure you read the
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fine print and right now I just checked
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look at some different rates there are
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there's a five-year option and a 10-year
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option I think they're about the same
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this is a funny thing
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so the five-year option is three point
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nine percent so if you are in that age
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or demographic where to nudi makes sense
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and you are totally fine making three
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point nine percent for five years make
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sure you compare that to a bank an
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online bank I don't care and find out
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make sure that this is paying
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substantially more because I would
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rather go with the CD than the annuity
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but check this out if you want to buy
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the 10 year like you think you get paid
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more right but currently right now the
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10 year annuity fixed annuity is paying
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about excuse me for 4% so hmm
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five years three point nine ten at four
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which one am I going to do I hope you
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know the answer to that so yes so this
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is another option we can get high return
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now with the index a variable there are
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other there are some different moving
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parts for these but the idea is that you
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can have some market participation and
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limit your downside risk that's kind of
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the pitch with these I want to be
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careful with that because there are as I
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mentioned there are a lot of moving
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parts it can get confusing most
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that by annuities have no idea what
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they're buying because they were missile
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misrepresented I need to do another
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video on that so I will alright so
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moving on number seven number seven this
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is one that I've had my money in for
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quite some time and that is with Lending
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Club otherwise known as p2p peer-to-peer
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lending so I have a few different
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accounts with Lending Club and the
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oldest one that I've had I've went from
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being conservative a little bit more
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aggressive and as of right now I have
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one account that has paid me about five
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point three six percent I have a few
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other accounts that are greater than
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seven percent I don't know if enough
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time has passed through some of the
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loans to default on that to affect that
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rate so keep that in mind but I have
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talked to other people actually many of
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you that have commented on other YouTube
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videos talking about how much you've
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done how well you've done with Lending
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Club I like I mentioned Lending Club
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again just because at some point time
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like we're going to have a correction
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right like the market is gonna have a
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pullback and if you're making between
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five and seven percent in what I would
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call the equivalent of a V bond or some
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sort of bond equivalent like that's not
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too bad so that is just one area to
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consider Lending Club peer-to-peer
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lending there are others out there but
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there's no question that Lending Club
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still and is still the leader in that
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peer-to-peer lending space alright the
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last one fun ride let's have some fun
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with it so we talked about peer-to-peer
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lending now we're talking about
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crowdsourcing with with real estate
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investing and I have other videos on
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fundrise you can check those out and
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I've had a few different fund rise
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accounts I think the longest one I've
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had it's been a few years now and when I
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looked at the return you know I'll have
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a screenshot that you can check out here
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like the different type of investment
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strategy that they have but the overall
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weight on everything my total portfolio
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has paid about 6.6 percent and I don't
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think it's been two years I think it's
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just just over a year and a half that
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I've had that and with that I always
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remind people that you know once again
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like the stocks the two different ways
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that you make money are appreciation and
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that dividend and with real estate
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investing the two ways you make money is
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is with rental income or also that
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appreciation as well and if you are
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investing in a real estate like we're
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not flipping properties right now you
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know this is a long-term investment so
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the fact that we've made 6.6 percent
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just off the dividend yields and
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payments from fund rise managing all
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their portfolios and doing all that on
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my behalf like that's not too bad as
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well and I know that's attractive for a
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lot of people I know many of you have
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tested out fund rise that you've had
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good success with it you know with all
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of these I mean these are all just
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options options that you have to make
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high return with little to no risk once
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again depending on what your risk is
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from some of you this might be too risky
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other people will be like wait that's
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that's all you got like I want to pull
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them on money to crypto or I want to put
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my money to penny stocks you know and
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make 100x return you need to have a talk
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if that's what you think is gonna happen
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by the way but nonetheless so these are
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some options that you can make high
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return with lower risk just making sure
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you understand what's out there if you
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found any value in this be sure to LIKE
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subscribe and hit that notification bill
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because guess what I've got more videos
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coming showing you how to accelerate
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your wealth here at wealth hacker labs
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are Joe this is Jeff rose reminding you
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that is your money that's your life and
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only you can make it awesome peace
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