Saving money just isn’t enough anymore. In fact, it never really has been enough. But, as we sit right now the millennials are the worst generation in terms of having money in the stock market.

There are a lot of factors in play that have lead to this, but that is a whole other story. The fact is we still need to retire, so we need to play with the hand we have been dealt.

So How Should I Put My Money To Work In 2018?

If you’ve got some spare money sitting in a savings account and are looking to put it to work, you’ve got to keep two things in mind before you start.

Make Sure Your Debt Is Paid Off

Investing while you have debt, especially with an interest rate that exceeds the returns of your investments, is a terrible idea. You can probably figure why.

Make Sure You’ve Got An Emergency Fund

This is a fairly important concept that a lot tend to miss. Investing money that you may need in the future (anywhere from next week to the next 5 years) is a recipe for a negative ROI.

The stock market needs time to provide you with its all but guaranteed returns. If you’re forcing yourself to sell your positions to pay for unplanned expenses, you aren’t reaping the rewards.

Now that we’ve got those two things out of the way, lets talk about three of the best ways to invest your money today.

Invest In The Stock Market

I’m sure everyone expected this to be on the list, and for good reason. The stock market has provided consistent gains since it’s inception. Where the market will be in 1,3 or even 5 years is absolutely unpredictable and anyone who tells you otherwise is full of it.

But over the course of ones working career, an investment in the stock market is all but guaranteed to provide a positive return on investment.

If you’re going to invest in the stock market, you really need to decide what you’re going to invest in and what your risk tolerance is. Both of those questions will have huge say in where you decide to place your money.

A conservative investor may choose to place their money in blue-chip dividend stocks, whereas an aggressive investor may decide to place their cash in some high potential growth stocks.

Invest in Bonds

Bonds are often seen as the lame brother of the stock market. And really, it’s true. Bonds aren’t going to provide you with slam-dunk returns like the stock market could, but the difference is, they are guaranteed.

This is of course if you invest in the safest bonds from reliable companies that you know will repay the debt when the bond matures. Buying junk bonds for ridiculously high interest rates could leave you with empty wallets and a whole lot of frustration, so tread carefully!

If you don’t know what a bond is, the overall concept is explained quite easily. When you buy a bond, you are lending money to a company at a predetermined interest rate.

How is that different than a stock? Well, when you purchase a stock, you are essentially buying a chunk of the company, and are entitled to all the benefits that brings (dividends, shareholder meetings etc). With a bond, you are no different than a bank loaning cash to a customer.

Invest in Real Estate

Now before you start telling me “investing in real estate costs a fortune!” let me finish.

You don’t actually need to own real estate to get a piece of the pie.

You can do it a couple ways. You can:

1. Invest in Crowd Funded Real Estate
2. Purchase a Real Estate Investment Trust

Either one of these options exposes you to the real estate market with substantially different risks. REITs, due to strict government regulations are often a fairly safe bet to invest in. Over 75 percent of their holdings must be either cash or invested in real estate, and they must pay 90 percent of their income out in the form of a dividend.

With Crowd Funding however, results are not always guaranteed and the concept is much riskier. You simply are pooling together your money with a bunch of other investors to help out someone looking to purchase real estate. This can be anyone from an agent, to a prospective home owner. You are then entitled to a chunk of the pie directly related to how much you invested.

What Method Should I Use?

This is a question that can’t simply be answered without taking a deep look at what your goals are and what you’d like to accomplish. Maybe you want to avoid the stock market and have a feeling real estate is going to be going through the roof. You may purchase an REIT.

Or maybe you’re a doomsday predictor and feel the stock market is going to collapse sooner or later (there are a lot of these types). Maybe you decide you want to become an entrepreneur and spend your money starting up your own business and becoming your own boss.

The choice is up to you, and your failure or success hinges on the decisions you make.

So what are you doing or going to do in 2018 to get your money working for you?

Let me know in the comments below. I’d love to hear about it.