Want a low risk, high return investment option? Here are a few ideas

Retirement can be a challenge to finance. As our lifespans extend, it is even more important to get a good return on low risk investments. Here are some ideas on how to achieve that perfect balance between return and risk.

REITS

Real estate investment trusts are becoming a popular option for many investment classes, not the least of which are retirees. These vehicles invest in mortgages or direct equity shares in a variety of properties. Dividends in REITS usually pay better than from stocks, and maintain their value when the stock market in general is in decline.

Stocks that pay dividends

If RIETS are not for you, or you would rather not have all your eggs in one basket? Then stocks that pay their shareholders is a great, traditional place to keep your money. There are many large companies that pay dividends on their stocks that are higher than what you can get on certificates of deposit or US Treasury securities. Be aware though, that we are talking about stocks, which are not as risk-free as fixed-income securities; but in exchange for the higher risk there is a chance for capital gains to be realized.

P2P lending

This is a new way to earn some passive income, first introduced in 2005, and gaining in popularity steadily ever since. Peer-to-peer lending is an online investment option that matches borrowers in need of money to lenders with some extra cash they want to put to work. A match is made between the lenders and borrowers which benefit them mutually, without the use of a cumbersome bank as an intermediary. The two largest lending platforms for P2P lending are Lending Club and Prosper. You can expect a higher return than investments in stocks, but the risk might be higher, depending on who you are lending your money to.

This is far from an exhaustive list. Before making any financial investment decisions, it is recommended that you speak with a financial advisor or investment professional, and know all your options.

© 2014 DRY HARBOR