Making Safe Investments with Good Return Rates

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If you have a limited amount of expendable income, investing can be scary for the majority of beginners.

All investments have an element of risk, so the solution for those seeking their first safe investments, is to seek out opportunities that will minimize the amount of risk you assume while earning you some decent return rates.

The key to safe investments is investing in a “top dog” that has yielded good results in the past, where you can expect a moderate to high return on your investment.

These are the types of investments to keep in mind for your initial portfolio:


Bonds are a much safer investment than stocks. Investing in stock gives you little or no guarantee of return. A bond, however, is similar to a loan, allowing for at least promised return, plus the interest earned on your principal.

  • Realize the difference between promised and guaranteed returns. No investment has an iron-clad guarantee, but bonds provide you with some assurance of what to expect. Finding investments with a low probability of default (the chance a company will file for bankruptcy or shut down their business) is the smartest bond investment you can make.
  • In general, bonds are paid back to the owner by year’s end, although the terms for each agreement are different.
  • Bigger bonds create the opportunity for bigger profits, but a higher interest bond will always make more money in the market. What this means is that investing in one high interest bond is safer than two lower interest bonds.


Yes, we did say stocks are a riskier investment, but the opportunity for a higher return rate means you have to assume some risk. Selecting safer investments like defensive stocks (which consistently thrive) will help minimize this risk somewhat.

  • Big name companies like McDonalds (MCD), The Procter & Gamble Company (PG), Pepsi (PEP), Wal-Mart Stores Inc. (WMT), and Johnson & Johnson (JNJ) are safe choices, which can weather volatile market conditions better than others. These companies are also more concerned about shareholder satisfaction, and will do their best to perform well.
  • If you need an investment security blanket, choose defensive stocks. They are long-in-tooth and remain profitable and more reliable than newer companies that may be experiencing good times today, bad times tomorrow.
  • Realize that investing in stocks offers no “sure things,” no 100% guarantees. Choose established stocks with a good reputation for performance and long-standing business success. Or, diversify your portfolio with long-standing mutual funds to spread out your risk, since your returns will then be based on a smaller portion of each investment in your portfolio.
  • Stocks are always a better choice for meeting long-term financial planning goals. Again, look for long-standing company with solid market reputations as a cautious, first-time investor.

Multi-family real estate

The housing meltdown has created a bull market for investing in multi-family dwelling. Many multi-family units are priced to move quickly, and owners are anxious to sell.

  • Multi-family dwellings allow opportunities for more rental units, and are therefore safer investments than a single-family home. This way, if one tenant leaves when their lease is up, your other tenants will still be generating income for you.
  • This is why multi-family dwellings are more profitable than single-family homes. With three 2-bedroom units renting at $700 each per month, you’ll be earning $2,100 per month instead of $700 from just one tenant, for example.

All investment strategies require patience and an accurate assessment of your tolerance for risk.

Investing in real estate has always been popular, but owning a fully occupied multi-unit property for rent guarantees a monthly return. Create a budget for maintenance and other contingencies, and you’ll have a nest egg you can rely on in times of need.

Of the three types of investments we’ve discussed, bonds are the safest, but also have the lowest return rate. When you get the help of an experienced investment advisor, you will be able to find hidden gems in the market that offer higher interest rates.

Stocks offer still higher returns, but these are by no means guaranteed and expose you to the potential for more risk.

The smart strategy with initial investments is to spread the risk and return rates over a diversified portfolio that makes sense. Some will have low risk; others will have a moderate amount of risk.

As an investment planner, we can help you with this!

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