Home » 7 Investments People Plan To Make in 2024 – Can You Get Rich Off Any of Them?

7 Investments People Plan To Make in 2024 – Can You Get Rich Off Any of Them?

7 Investments People Plan To Make in 2024 – Can You Get Rich Off Any of Them?


Inside Creative House / Getty Images/iStockphoto

Inside Creative House / Getty Images/iStockphoto

To determine what types of investments people plan to make in 2024, GOBankingRates commissioned a survey and asked respondents a number of financial questions, including that one. Survey participants were allowed to choose more than one investment that they were interested in buying or owning in 2024.

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The top seven responses, in no particular order, were stocks, retirement accounts, high-yield savings accounts, cryptocurrency, mutual funds/ETFs, real estate, and certificates of deposit. Here’s a quick overview of the potential that each of these has to make you rich.

Stocks

Stocks are often touted as among the best wealth-building tools available, and the track record is certainly there. Since 1926, the average annual return of the stock market has been roughly 10%, meaning it will double about every 7.2 years. Over 50 years of investing, that means a stock portfolio could double as many as seven times on average. Combined with annual investments beefing up this amount even further, stocks clearly have significant wealth-building potential.

Most successful investors agree. The billionaire CEO of Berkshire Hathaway has long said that the best choice for most investors is a low-cost S&P 500 index fund. Buffett, who has earned the moniker the “Oracle of Omaha,” has even directed his trustee to put 90% of his estate into S&P 500 index funds for his wife after he dies.

The simple math of the stock market makes it a compelling long-term investment. Although some “get rich” types might scoff at a 10% average annual return, here’s the simple truth. If you set aside just $300 per month at that 10% annual return, you’ll have over $1 million in less than 34 years. While that may seem like a long time, if you start at age 21, that means you’ll be a millionaire by age 55 – and that’s without adding more than just $300 per month at any time. By many Americans’ standards, that would qualify you as being rich at a fairly young age.

Fortunately, GBR survey data shows that stocks are the most favored investment by respondents in 2024, with one-third indicating they intended to buy stocks. This is a good place to be for long-term investors.

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Retirement Accounts

Retirement accounts can’t make you rich in and of themselves. After all, they are just accounts that can hold your assets, and you’ll still have to choose the investments that go inside them. But they can certainly help your journey. This is due to their tax advantages. Traditional IRAs and 401(k) plans, for example, are funded with pre-tax money and offer tax-deferred growth until you pull the money out. Roth accounts don’t grant any tax deductions on contributions but allow tax-free withdrawals in retirement. Both can help your money grow more rapidly and boost your retirement nest egg.

GBR survey respondents indicate that they value retirement accounts highly, with 30.22% indicating they intend to invest in a 401(k) and/or IRA in 2024.

High-Yield Savings Accounts

High-yield savings accounts, in most cases, can’t really help you get rich. Even after the rates they paid shot up in 2022 and 2023, their yields peaked somewhere in the 5% range, about half the long-term average annual return of the stock market. And this was the highest rate they paid in over 40 years. Looking back to 2020, the typical high-yield savings account paid less than 1%.

High-yield savings accounts still have tremendous value, as they are FDIC-insured and can be great places to store short-term money like emergency funds and travel savings. But they’re not a good way to get rich.

According to the GBR data, a whopping 24.35% of survey respondents still indicated they planned to invest in high-yield savings accounts in 2024. If that intention reflects fear of a recession or a boost in short-term savings, that figure should not be alarming. However, if respondents are planning to use HYSAs as their primary source of long-term growth, they may end up falling behind.

Cryptocurrency

Cryptocurrency is the ultimate asset if you’re of the “get rich quick” mentality. The massive swings in valuation that many cryptocurrencies exhibit, on a daily or even hourly basis, make them a trader’s dream – that is, if you’re successful. Many crypto investors have lost everything trying to invest in the asset class, and this alone makes them an unsuitable investment for those looking to build long-term wealth.

Even investors who endorse the asset class, like billionaire Mark Cuban, recommend that investors think of crypto as a “flyer,” something more like art or baseball cards than stocks and bonds. While Cuban has the money to lose if things go belly up in the crypto world, for the average investor, Cuban says you should only put money into it if “you’re a true adventurer and you really want to throw the hail mary.” He also says that you should invest in crypto only if you believe in what it’s trying to accomplish. As Cuban says, “Don’t buy to speculate. You know what happens to speculators? They get their [bleep] handed to them.”

In the GBR survey, 17.71% of respondents indicated they planned to invest in cryptocurrency in 2024.

Mutual Funds/ETFs

For investment experts like Dave Ramsey, mutual funds are the only way to go for the average investor. Ramsey likes mutual funds because you get to own a lot of different companies with a single investment – offering instant diversification – and this also helps you avoid the risks associated with investing in individual stocks or other, more speculative investments like cryptocurrency. A good growth stock mutual fund or ETF can offer you returns approximating the market itself, or about 10% annually. As shown above, this can be enough to help you get rich over the long run.

In the GBR survey, just over 16% of respondents indicated they plan to invest in mutual funds/ETFs in 2024.

Real Estate

Real estate is a favored investment by 15.59% of the GBR survey respondents for 2024. For some financial pros, real estate should be at the top of the list for everyone. According to famed “Rich Dad, Poor Dad” author Robert Kiyosaki, for example, while real estate isn’t a quick way to riches, it should be a foundation of your investment portfolio. Kiyosaki says your focus in real estate should be on cash flow, not on quick capital gains. Over time, you should work on building a portfolio of real estate properties that generates enough cash flow to cover your expenses. As a real asset, Kiyosaki believes real estate will always have value.

CDs

Like high-yield savings accounts, certificates of deposit, or CDs, are not a great way to build wealth. However, they are an excellent way to preserve wealth. If you’re saving for a short-term goal or are trying to balance out your portfolio with more conservative investments, CDs may work out. They are generally available in a variety of terms, ranging from a few months to a few years, and they carry FDIC insurance. However, they don’t have the liquidity of high-yield savings accounts, as there’s usually an interest penalty imposed if you take a withdrawal before their maturity date.

While you won’t get rich off a CD, it can offer you peace of mind, especially during times of stock market volatility. Conservative investors who are willing to trade off long-term returns for short-term stability may enjoy using CDs in their portfolio, but you certainly won’t get rich off them. About 14% of GBR survey respondents indicated they plan to invest in CDs in 2024.

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This article originally appeared on GOBankingRates.com: 7 Investments People Plan To Make in 2024 – Can You Get Rich Off Any of Them?



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