Ten Ways To Earn A 10% Rate Of Return On Your Investments

Peer-To-Peer Lending Has A Great Rate Of Return

Peer-To-Peer Lending through companies like Lending Club are my favorite way to earn a rate of return over 10% annually. Lending Club’s most conservatively A rated loan earns over 6% for the investor. It does not take long or much more risk to earn over 10% returns. And, Lending Club’s most risky investments earn a rate of return of over 20% annually.

Starting Your Own Business

I am a huge fan of starting your own business. I wish everyone would have the entrepreneurial spirit. It was one of the best ways to earn a 10% rate of return on your investment. Whether it is opening a neighborhood restaurant or as simple as starting a blog, a business venture is a great way to boost your investments’ returns.

Short-Term Stock Trading

Granted, short-term stock trading is not for everyone and should not be done with a large portion of your entire investment portfolio. Learning investment management can be a great way to gain the knowledge on what you need to do in the stock market to get a big return. Trying to time the stock market is a rough way to earn a 10% rate of return on your investments, but it could be well worth your time and efforts with a small portion of your investment portfolio.

Investing In Real Estate

Real estate is a great way to earn over 10% rate of return on your money. I’m a big fan of becoming a landlord which I’ve talked about several times here onMoney Q&A. While you need to run your numbers and do your research, you can earn a 10% rate of return on your investments with your rents.

Real Estate Investment Trusts (REIT) are another great option if you do not want to own real estate directly. REITs are required by law to distribute a majority of their earnings to their shareholders in the form of dividends. These payouts and real estate’s impending comeback make REITs an attractive alternative to help investors reach the 10% threshold.

Master Limited Partnerships (MLP)

Master Limited Partnerships are partnerships that trade like a stock. They are risky and not for every investor, but they can often offer a larger rate of return than other investments. Many MLPs invest in the energy sector, minerals, and other raw material type ventures. They often have a high yield because they do not pay income taxes themselves and pass on that responsibility to their shareholders.

Art And Other Collectables Can Diversify Your Investments

Beverly Solomon who is the Creative Director of musee-solomon recommends investing in art and other collectibles. “Good art, great collectibles, quality antiques as a whole are safe investments that tend to grow in value at as good as or better rate than almost any other investment. Plus they–unlike stocks or bonds–have the added bonus of your being able to enjoy them in your home on a daily basis,” she said.

Create A Product To Boost Your Rate Of Return On Your Investments

Robert Pagliariri wrote one of my favorite books, “The Other 8 Hours”, where he talked about becoming a creator. It is not enough to simply work a 9 to 5 job and hope to become rich. It unfortunately just does not work that way. Those who are more successful than most are creators. They create businesses. They create products. They make things people want to buy. That’s how you can earn a 10% rate of return on your investment.

Junk Bonds Are An Interesting Choice

Junk bonds get a bad rap simply because of their name. But, don’t be fool by the lingo. There are basically two categories of bonds: investment grade and junk bonds. Junk bonds are simply high yield, higher risk bonds from companies who have seen their credit ratings suffer from the rating agencies like Moody’s and Standard and Poor’s. Junk bonds typically have a rating of BB or Ba or less depending on whose scale you use.

Paying Off Your Debt Is Like An Investment

Paying off a debt with a high interest rate is the same as having earned that exact same rate of return. It is all about opportunity costs. What is the best opportunity for you to put your money to work for you? For example, if you have a credit card with a balance that is charting you a 16% interest rate, paying off that debt would be the same as having invested and earning that 16% on the investment. Paying off high interest debt is a great way to earn a stellar rate of return.

Stocks For The Long Term

“Make it automatic,” said David Rae, a retirement income specialist and CFP, recommends setting up automatic investments. “Put money away every month, when time are good and times are bad. Avoiding investing mistakes will make you more money in the long run than trying to pick the hottest sector/stock/fund/investment of the years.”

With the help of a Financial Planner, you can pick a well diversified investment portfolio appropriate to your financial situation and the amount of risk that you are willing to accept. Granted, you may need to take on more risk if you want that 10% rate of return.

Most of us are a victim of recency bias. An entire generation of investors have only known the stock market of 2003 to 2013. Our most recent past is not a precursor to what our long term investing future will be. A 10% annual rate of return over the long term is very much achievable.