5 Best Strategies To Build Wealth With Short-Term Investments
Written by
Cindy Lamothe
Edited by
Amber Barkley
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If you’re looking to grow your money without having to wait years, short-term investments could be the perfect way to go about it. Whether you’re saving for something specific or just want to see your cash work harder, there are plenty of smart strategies to help you get better returns in less time.
Here are some of the best ways to build wealth through short-term investments and get your money moving faster.
Invest In a High-Yield Savings Account
Experts like Mark Gelbman, financial advisor and owner of Strategic Wealth Solutions, recommend investing in a high-yield savings account (HYSA).
When it comes to short-term investments, a high-yield savings account can be a game-changer, offering a safe and reliable way to grow your money without taking on significant risk. This is ideal if you’re looking for a place to park your cash for a few months or even a year.
“There are many online banks that offer higher interest rates than traditional brick and mortar banks,” Gelbman said.
While a traditional savings account might offer an interest rate of 0.01% to 0.05%, a high-yield savings account can offer rates ranging from 3% to 5%, depending on the bank and market conditions.
Purchase Short-Term Treasury Bonds
Treasury bonds are debt securities issued by the U.S. government.
One of the biggest appeals of Treasury bonds is that they’re backed by the U.S. government. This means they come with an incredibly low level of risk compared to many other investments, such as stocks or corporate bonds. Treasury bonds also offer fixed interest rates, which means you’ll know exactly how much you can earn over the life of the bond.
Gelbman noted that one- to six-month Treasury bonds are currently yielding between 4.2% and 4.3%.
Private Credit and Short-Term Lending
According to Chris Heerlein, CEO of REAP Financial, investors looking for steady returns without stock market volatility can participate in private lending platforms. This lets them fund small business loans or real estate deals with short repayment periods.
“A client of mine invested in a six-month real estate bridge loan with a 9% annualized return, allowing them to earn passive income without committing long-term,” he explained.
Structured CDs With Market-Linked Returns
Unlike traditional certificates of deposit, these offer FDIC insurance while tying interest rates to stock market performance. Heerlein said this lets investors benefit from potential market gains while maintaining downside protection.
He noted working with a retiree who wanted higher returns than a savings account but still needed security. A structured CD provided upside potential with no risk to their principal, giving them peace of mind.
Cash-Secured Put Selling
While it’s typically used by more experienced investors, if you’re comfortable with risk and have a solid understanding of how options work, it can be an interesting approach to boosting returns. Instead of letting capital go unused, investors can sell put options on stocks they already want to buy, collecting premiums while waiting for the right entry point.
A client of Heerlein’s was looking to buy into a blue-chip stock and used this strategy, earning income while waiting for a better price.
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