Smart Investment: Double your money in less than a year

If you act now, you could double your money!
Double your money in less than a year – Invest

Having a job that pays the bills is an absolute necessity, but basing our financial future on a job alone will never bring about the financial satisfaction and success that most of us are after.

With only a limited amount of working hours available each day, exchanging our time for money places very serious limitations on our earning potential and the only real way to maximise savings and income is by purchasing assets.

Simply having a job that brings in a monthly pay check will by no means make anyone a millionaire but smart investing certainly has the potential to do so.

We’ve all heard that investing is the best way to achieving financial freedom and accumulate wealth but knowing how, where and when to invest your money requires a certain degree of knowledge because the world of investing is a fast-paced, ever-changing game that is not for the faint hearted.

Although this article will focus on both short and long-term investing it is important to note beforehand that long-term investments are more profitable and have a significantly less degree of risk attached to them while short-term investments tend to yield less return and have a higher degree of risk attached. If you’re looking to double your money within a year than you’re definitely going to have to consider stocks, which we’ll delve into a little bit later on.

Smart Investing

Firstly, let’s take a look at liabilities. These are things that we buy that cost us money every single month but do not generate any income and this includes both your home and your car. Even though you live in your home, and probably even own it, it’s not an asset unless it’s bringing in regular income. This is the most common misconception people have about the term “asset” and also the primary reason so many of us simply cannot accumulate the wealth we so badly desire – because we don’t understand the basics.

A smart investment is one that will provide a return on a regular basis, which by definition means that the investment must be an asset. Assets do not cost you money, they earn you money. If you purchase a property and rent it out, earning a profit after all expenses, than this property is an asset. Wealthy people spend their income primarily on assets and this is what separates them from the average and middle class who never seem to be able to gain any serious financial wealth.

Financial Education

In order to gain wealth we need to invest some time into our financial education. This does not mean that we need to become financial experts but we do need to understand how investments work, what stocks,  bonds, mutual accounts and index funds are and, how compound interest works. These are the basics of investing and by spending some time researching and looking into the various investment opportunities available we’ll certainly become more competent and confident investors, capable of investing wisely and earning well.

Another important point I’d like to bring across is that if you’re not willing to put in the time to understand how investments really work you can still invest in certain schemes that are designed to work for people that have very little to no understanding of how things actually work. This includes index and mutual funds as well as bonds. These are usually seen as the safer and easier options for beginners and people who simply don’t have the time to be personally involved in their investments.

If you have a lump sum of money simply sitting in a savings account, you’re not actually accumulating wealth – investing this money into a mutual fund or even a money market account will be far more profitable. These are simply options that will provide you with better returns than either a savings account or a 401(k) retirement account.

Since the title of this article is “double your money in less than a year” I will assume that you want to invest your money in a manner that will provide a better return that a bank and also that you want easy access to your money whenever the need may arise. When you have time on your side and you’re not dependent on the income from your investment to live, you have the possibility to invest more aggressively and therefore earn a higher profit. Since you’re looking to double your money in a year, my guess is that you definitely want an aggressive, short-term investment option but we’ll consider all the options available just for education purposes.

A risky but rewarding short-term investment opportunity is that of penny stocks. Penny stocks are very low priced stocks that are highly volatile but can easily double in value within a matter of hours. Peer to peer lending is also an investment option that has the potential to yield very high returns but is likewise quite risky. You will basically bid and compete for a loan by offering a lower rate than other lenders. I would recommend these options to anyone looking to make a short-term investment that has a high earning potential.

We’re going to take a look at four of the mainstream ways to invest your money and this includes taking a look at stocks and bonds, mutual funds, index funds as well as property investments, compounding and a few other investments.


As mentioned, long-term investments generally tend to pay off greater returns than short-term investments. One of the most common examples of such an investment would be a compound interest investment where you basically invest your money, earn an interest off of the investment and then earn further interest off the earning. What’s basically happening is that you’re earning returns on the returns however; this is an investment that builds up over time and for people who do not need access to their money.

Stocks and Bonds

Stocks can be highly profitable if handled correctly and just about anyone can learn how to do this – which brings me back to the point I made earlier; it’s absolutely crucial that you spend some time working on your financial education – learning the ins and outs of trading stocks is an absolute sure-fire way to begin generating a good income without having to sell your time.

As a stock owner you’re buying a part of a company and will therefore be entitled to the profits earned by this company, or what is otherwise known as dividends. If the stocks you bought go up in value you can then sell the stock and earn a good profit however, stocks are considered to be risky because dividends are not guaranteed and stocks fluctuate wildly on a daily basis. You’ve probably heard people use the phrase “volatile stock market” but, unlike most will have you believe, the market being volatile is what actually helps you earn good money because if stocks don’t go up and down but remain the same, you will be unable to make a profit.

Investing in stocks is quite risky and you should therefore ensure that you have least six-months living expenses available to you and that you’ll not be financially devastated should you incur a loss.

We’re not going to delve into the details of which stocks are the most profitable and so on but the general rule of thumb is that if you invest in well established companies that are selling at good prices you are likely to earn good, stable dividends while, if you invest your money in smaller, less established firms that you believe to have great potential you will risk your investment but have the possibility to earn much higher dividends. These are two totally different strategies that are both equally valid – it all depends on what type of person, or investor you are. These two types of investors are commonly known as value and growth investors and you can easily be both, although most people tend to either prefer one or the other.

Bonds are generally considered a safe investment – this is because in essence, you’re just loaning your money to a company and earning an interest. Again, because the risk is low the returns are generally also lower.  There are a variety of different short-term bonds, some that will mature within 24 months or less, so this type of investment is perfect for anyone looking for quick return. Municipal bonds are also a good option as they are tax-free and you’ll therefore end up with a larger profit.

Aggressive investors or short-term investors should invest more money in stocks than bonds because stocks have the potential to earn better in a shorter period of time.

Mutual Funds

Mutual funds are simply a combination of both stocks and bonds. If you invest in a mutual fund what you’re basically doing is adding your money to a pool of money from other investors and hiring a manager to invest this money. This can be done in a variety of different ways depending on the focus of the particular mutual fund. For example, you can opt to invest in a fund that focuses solely on new, growth dependent businesses, blue chip companies or a specific industry or sector, the options vary wildly and each come with their own set of benefits.

A mutual fund investment is perfect for those that are less experienced because they’re not actually making any difficult purchase decisions, the manager is. One of the downfalls of a mutual fund is that the appointed manager will be entitled to a portion of the earnings and this could be quite a significant amount of money. The manager’s job is to actively monitor the fund and make adjustments to the portfolio, which is the collection of stocks and bonds, as he or she sees fit.

One example of a mutual fund is a fixed income fund. This is where a fund manager will aim to provide the highest possible return with the lowest possible risk. To begin investing in mutual funds you need to understand the difference between closed and open end funds as well as load and no-load funds. A closed end fund is one where there is only a certain amount of shares available and will not issue new shares or redeem them while an open-end fund has no set number of shares available and shares can be sold and bought as necessary. A load fund is when an investor will pay a sales commission in addition to the total value of the shares to the fund manager. If you’re looking for an investment that cut’s out this middle man than you need to look at investing in index funds.

Index Funds

Index funds are a great way to invest your money without actually having to understand in detail how the markets work. You should do your research though – particularly focusing on the Dow Jones and S&P 500, which are industry benchmarks that allow investors to gauge how the market is doing as a whole.

When you invest in index funds you are basically buying stocks based on computer calculations. Although this type of investment is most effective as a long-term investment, the major benefit is that you don’t have to actively be involved in choosing which stocks to buy - the programme will do that for you. Another reason to go for this type of investment is that fees are minimal, more so than with a mutual fund, because you’re not selling and buying as much as in a mutual account which means there’s less tax and you’re also not paying a significant portion of the earnings to a fund manager. Studies have also shown that index funds bring in better returns than mutual funds in the long run.

Money Market Accounts

A money market account is in essence a savings account with higher than average interest rates. You will need a significant minimum deposit as well as a minimum balance to keep the account active. A market money account also gives you access to funds to a limited degree, roughly about three monthly withdrawals so it’s a solid option for investors looking for a little flexibility.

Property Investments

Purchasing a property that is priced below average for the area or neighbourhood it’s in and reselling for a profit is a good way to make some serious money. This is usually known as “flipping a property” and is great for both new and experienced investors. A smaller investment is needed because most of the properties that can be “flipped” easily are small. It can be a risky undertaking, especially in a downed economy however, smaller properties do tend to stay in demand and sell relatively easily. Property investments are the most solid from of investment and most deals will earn you a nice chunk of change.

Whichever investment opportunity above appeals to you, I recommend that you research this option in detail before making any final decisions. I also recommend consulting with a professional if this is your fist investment, you may have to pay for their services but the chances of losing your investment will be significantly reduced. Also remember that the investments that have the ability to provide the highest returns in the shortest space of time are usually the riskiest one too – so know how much risk your willing to take and work with it.

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