Do you wish to double your money but are worried about the risks involved? Are you pondering questions like;

• How can I safely double my investment?
• What are the best low-risk investment options?
• Is it possible to grow my wealth without risking my principal?

We’ve got your back! Investing wisely doesn’t mean you have to gamble with your hard-earned money.

While it isn’t as easy to double your money without risks, there are several safe investment strategies that can help you double your money without exposing yourself to unnecessary risks. However, it’s important to note that the financial markets can be unpredictable.

And, past performance is not indicative of future results. In this article, you’ll discover the top low-risk investment strategies that can help you achieve your financial goals, and possibly also stop living from paycheck to paycheck. Keep reading to learn how you can safely and effectively double your money.

Disclaimer: This article is for educational purposes only. Investing involves risk, and strategies discussed are not guaranteed to double money. Consult a financial advisor before investing.

How can I turn my Little Money into a Lot of Money?

You’re on the right path if you’re already thinking about turning your little money into a lot of money. It indicates a proactive approach to financial growth and is a smart step to financial security. Here are 20 proven ways to double your money with the least risk;

1.      Invest in Bonds

Bonds are a reliable way to double your money while minimizing risk. There are two primary ways to make money by investing in bonds.

The first is to hold the bonds until their maturity date and collect interest payments. Bond interest is usually paid twice a year, providing a steady stream of income.

The second method is to sell the bonds at a higher price than what you initially paid. Let’s use an example of purchasing $10,000 worth of bonds at face value.

You then wait to sell them for $12,000 when their market value increases. This will allow you to make an extra $2,000 on the side.

Bond prices can rise if the borrower’s credit risk profile improves or if prevailing interest rates on newly issued bonds decrease, making the higher interest rate on existing bonds more attractive. Bond yields and prices have an inverse relationship; when interest rates rise, existing bond prices typically fall, and vice versa.

For example, with the Federal Reserve hiking interest rates in 2022, bond yields went up, causing prices to drop. However, not all bonds pay interest; zero-coupon bonds are sold at a deep discount and offer a return once matured, making them another low-risk investment strategy to consider.

2.      Invest in Mutual Funds

Mutual funds pool money from multiple investors with the aim of purchasing a diversified portfolio of stocks, bonds, or other securities. This diversification helps reduce risk because the performance of the fund does not rely on a single asset.

They are a powerful vehicle for doubling your money over time due to their potential for high returns and professional management. Mutual funds can give returns averaging between 12 and 15% annually if you invest in a disciplined manner.

For example, an investment of $10,000 in mutual funds could double to $20,000 in six years with an annual return of 12%. To understand how quickly your investment can double, you can use the Rule of 72

Using the Rule of 72, you can determine the doubling time by dividing 72 by the expected annual return. The Rule of 72 is a simple way to estimate the years required to double your money at a fixed annual rate of return. For instance, with a 12% annual return, it would take 72/12, or 6 years, to double your investment.

3.      Put Money in Real Estate

Real estate investment is another tried-and-true method for doubling your money. Investing in real estate involves purchasing property with the expectation that its value will increase over time.

This can be achieved through strategies like buy-and-hold, where you purchase a property and hold onto it for a long period, expecting its value to increase over time. Another strategy is flipping, where you buy a property, make improvements, and sell it quickly for a profit. Real estate is a tangible asset that not only appreciates but also provides rental income.

For example, purchasing a property in a growing neighborhood and renting it out can generate steady income while the property value increases. Real estate investments have historically outperformed many other asset classes, making them a reliable choice for wealth building.

4.      Save in Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a government-backed savings scheme in countries like India designed to provide long-term savings and investment options. PPF offers attractive interest rates, which are often higher than those offered by regular savings accounts, and tax benefits, which can help you save on your tax liability.

These advantages make it a popular choice among conservative investors. PPF accounts have a lock-in period of 15 years, which means you cannot withdraw your money before this period ends.

This ensures that the invested money grows over a long period. The interest earned is compounded annually, which helps in doubling the investment over time. The combination of tax advantages, guaranteed returns, and government backing makes PPF an excellent low-risk investment.

5.      Put Money in High-yield Savings Accounts

High-yield savings accounts are a safe and accessible way to double your money. Unlike regular savings accounts, high-yield accounts offer significantly higher interest rates.

Let’s consider a high-yield savings account with a 5.25% annual interest rate. Using the Rule of 72, a simple formula to estimate how long it takes to double an investment, you divide 72 by the annual interest rate.

In this case, 72 / 5.25 ≈ 13.7 years. This means it would take approximately 13.7 years to double your money with a 5.25% interest rate.

For example, if you start with $10,000 in a high-yield savings account earning 5.25% annually, after about 13.7 years, your investment would grow to $20,000, thanks to the power of compounding interest. Compounding interest is the interest earned on both the initial amount of money and the interest that has already been earned. Specific banks like Ally Bank and Discover Bank often offer competitive rates, making them excellent choices for conservative investors seeking steady, low-risk growth.

6.      Invest in Hybrid Funds

Hybrid funds, also known as balanced funds, invest in a mix of stocks and bonds to provide both growth and income. These funds aim to strike a balance between risk and return which explains best why they’re suitable for investors seeking moderate risk with the potential for higher returns.

Hybrid funds offer diversification across asset classes, which helps in mitigating risk. For example, aggressive hybrid funds allocate a higher percentage to equities, which are considered riskier but have the potential for higher returns. On the other hand, conservative hybrid funds favor bonds, which are generally safer but offer lower returns.

This mix ensures that the fund can perform well in different market conditions. Top-performing hybrid funds have shown impressive returns, making them a viable option for doubling your money.

7.      Invest in National Savings Certificates (NSC)

National Savings Certificates (NSC) are government-backed fixed-income securities available in countries like India. This means that the government guarantees the payment of interest and the return of principal, making them a safe investment option. They are a popular choice for conservative investors due to their safety and tax benefits.

NSCs have a fixed tenure, typically five or ten years, and offer attractive interest rates. The key benefits of NSCs include government backing, fixed returns, and tax benefits.

Interest earned on NSCs is compounded annually, which can significantly enhance your investment over the long term. Given their safety and guaranteed returns, NSCs are a reliable, low-risk investment.

8.      Use Stock Market

The stock market offers substantial opportunities for wealth creation for those who are looking to make money online. While it is often associated with high risk, long-term investing in the stock market can be a low-risk strategy if approached wisely. Investing in blue-chip companies and diversifying your portfolio can help mitigate risk and increase your chances of doubling your investment.

For example, if you invest $10,000 in a stock that has historically doubled every five years and continues to do so, your investment would be worth $20,000 in five years, $40,000 in ten years, and $80,000 in fifteen years.

This assumes the stock price continues to increase at the same rate, which is not guaranteed. However, diversifying your portfolio, regularly reviewing your investments, and staying informed about market trends can improve your chances of doubling your money through the stock market. It’s essential to consult with a financial advisor to develop a strategy that aligns with your financial goals and risk tolerance.

9.      Buy Dividend Stocks

Dividend stocks are shares of companies that regularly distribute a portion of their earnings to shareholders. These stocks provide a steady income stream and the potential for capital appreciation. Investing in companies with a strong history of paying dividends can be a low-risk way to grow your money.

The benefits of dividend stocks include regular income and the potential for appreciation. Reinvesting dividends can further enhance your returns through the power of compounding. Companies like Johnson & Johnson and Coca-Cola have long histories of paying and increasing dividends, making them attractive to conservative investors.

10.  Save in Money Market Accounts

Money market accounts are savings accounts that typically offer higher interest rates in exchange for higher minimum balance requirements. These accounts invest in low-risk, short-term securities, such as certificates of deposit (CDs) and Treasury bills, which provide a steady income stream.

While money market accounts are considered safe, the rate of return is relatively low compared to other investments. To double your money with a money market account, you’ll need to consider the interest rate and the compounding frequency.

For example, if your money market account offers an annual interest rate of 2%, it would take approximately 35 years for your money to double. However, some accounts may compound interest more frequently, such as daily or monthly, which could shorten the time it takes to double your money.

For instance, with monthly compounding, your money would double in about 35/(12/1) = 35/12 = 2.92 years. Keep in mind that these calculations are estimates, and actual results may vary based on interest rates and compounding frequency.

11.  Invest in Debt Instruments

Investing in debt instruments, such as corporate or government debt, involves lending money in exchange for regular interest payments. These investments are generally considered low-risk, especially when investing in high-quality debt.

Debt investments provide a fixed income, making them an attractive option for conservative investors. High-quality corporate bonds and government debt have historically offered reliable returns, helping investors double their money over time.

12.  Put Money in a Real Estate Investment Trust (REIT)

Real Estate Investment Trusts (REITs) allow investors to gain exposure to real estate without having to be directly involved in owning properties. REITs invest in income-producing real estate and distribute a significant portion of their earnings as dividends.

The benefits of REITs include real estate exposure without the hassle of property management, diversification, and regular income. REITs have shown strong performance over the years, making them a viable option for conservative investors seeking to double their money.

13.  Build Rental Houses

Investing in rental properties involves purchasing real estate to generate rental income. This strategy provides a steady income stream and the potential for property appreciation.

Rental housing offers numerous benefits, including steady rental income and the potential for property value appreciation. By carefully selecting properties in high-demand areas, investors can achieve significant returns. Rental properties have been a cornerstone of wealth-building for many investors.

14.  Business Investment

Investing in small businesses or startups can offer high returns with careful selection. This strategy involves providing capital to a business in exchange for equity or a share of the profits.

Business investments can yield substantial returns, particularly if the business grows and becomes profitable. Success stories of early investments in companies like Apple and Amazon highlight the potential of this strategy. While riskier than other options, thorough research and prudent selection can lead to impressive returns.

15.  Trade Options

Options trading involves buying and selling options contracts, which give the holder the right to buy or sell an asset at a predetermined price. Options trading can be used to hedge against risk or to speculate on the direction of an asset’s price.

It can be a lucrative strategy for doubling your money but requires careful planning and risk management. One way to double your money with options is through a strategy called a “covered call.”

This strategy involves selling a call option on a stock you own while simultaneously holding the underlying stock. If the stock price stays under the strike price of the call option, you keep the premium from selling the option.

If the stock price goes above the strike price, you may be required to sell your stock at the strike price, but you still keep the premium, effectively doubling your initial investment. For example, let’s say you own 100 shares of a stock trading at $50 per share.

You sell a call option with a strike price of $55 for $2 per share or $200 total ($2 x 100 shares). If the stock price remains below $55 by the option’s expiration date, you keep the $200 premium. If the stock price increases past $55 and the option is exercised, you sell your 100 shares for $55 each, totaling $5,500, plus you keep the $200 premium, effectively doubling your initial investment of $5,000.

The benefits of trading options include the potential for high returns and the ability to control risk. Strategies like covered calls and protective puts can provide income while limiting downside risk.

16.  Gold Bonds and Gold ETFs

Gold bonds and gold ETFs offer exposure to gold without the need to physically own the metal. These investments track the price of gold and provide a hedge against inflation and economic uncertainty.

The benefits of gold bonds and gold ETFs include stability, liquidity, and the potential for appreciation. Gold has historically been a safe-haven asset, and investing in gold instruments can provide diversification and protection against market volatility.

It’s a Wrap!

Doubling your money without risk may seem challenging. However, with the right strategies, it is achievable. Diversify your investments to grow your wealth steadily. Also, to double your money effectively, prioritize safety and take a long-term approach to ensure you’re best placed to achieve your financial goals without exposing your capital to unnecessary risks. Explore these options and invest wisely to build a secure and prosperous future.