3 Low-Risk Beginner Investing Strategies for Better Financial Freedom
Building wealth doesn’t always have to come with high risk. For beginners, finding low-risk ways to invest can pave the way to financial freedom without unnecessary stress. If you’re just starting your investment journey or prefer a more cautious approach, here are three low-risk strategies that can help you grow your money steadily without too much headache. Wish I knew about this 10 years ago…
1. High-Yield Savings Accounts
A high-yield savings account is one of the simplest and safest ways to start investing. These accounts offer higher interest rates compared to traditional savings accounts, which means your money can grow passively. While the returns won’t make you rich overnight or even over a couple years, it’s a very low-risk place to start your investment strategy and store your funds (maybe while looking for the next right investment opportunity).
Why it's low-risk:
Insured by the FDIC or its equivalent, meaning your money is protected.
Offers liquidity—easy access to your money when needed.
2. Peer-to-Peer Lending (P2P Lending)
P2P lending platforms allow you to lend small amounts of money to individuals or small businesses in exchange for interest payments. Essentially, this is what Investing RN offers our private investors. Many platforms let you spread your investment across multiple loans, while Investing RN backs investments to a cash flowing property. While there is some risk involved, you can select loans based on risk level and opt for lower-risk borrowers and still don’t have to get your hands dirty in the management and maintenance of owning the property.
Why it's low-risk:
You can select loans with lower risk profiles.
In some cases, they allow you to diversify across many small loans to minimize the impact of any defaults.
3. Robo-Advisors
If you’re interested in stock market exposure but want a hands-off approach, consider using a robo-advisor. These automated platforms build and manage a diversified portfolio for you, usually consisting of a mix of stocks, bonds, and other low-risk assets. The goal is to balance your risk tolerance with growth potential while making investing easy for beginners. Betterment, Wealthfront, SoFi Invest are examples of a few popular ones to check out.
Why it's low-risk:
Provides professional-grade diversification with minimal effort.
Many robo-advisors focus on conservative strategies for risk-averse investors.
Whichever investment strategy fits your risk tolerance,
these 3 low-risk investment strategies—high-yield savings accounts, P2P lending, and robo-advisors—offer a balance between growth and security. Whether you prefer a completely hands-off approach or are open to exploring different markets like real estate or lending, these options provide a solid foundation for building wealth while minimizing risk. Financial freedom is within reach, especially when you invest smartly and just get started!
We started our investment journey buying real estate in 2019, and the # 1 thing we always discuss is that we just wish we had started sooner.
If you’re interested in learning more about investing in stocks and other creative investment strategies for newbie investors, check out this episode on Investing RN with Brian Benjie on “Beginner Investment Strategies: Stocks, HELOCs and Leveraging Credit Cards”
