Nurses have some of the busiest work schedules across all industries. Even if a nurse isn’t in a position where they are on-call, they may still work 12 hours at a time. With that being said, it can be a challenge for nurses to invest while striving to grow their portfolios. For people with such busy work schedules, it’s essential to have low-maintenance investments. But, what investments are truly low-maintenance? In this article, we’ll cover some great options.
1. Dividend Stocks
Dividend stocks are considered a classic low-maintenance investment. A dividend stock is a stock from a company that pays its shareholders a dividend for investing in them. So, it might be worth putting your money in these stocks.
However, if you only invest in one or two dividend stocks, it likely won’t affect your earnings greatly. You are only earning a percentage of your total investment back. However, this is a great way to diversify your portfolio if you don’t have the time or knowledge to consistently invest. If you do put a portion of your income towards dividend stocks you may be able to earn more off your investment as compared to, for example, a traditional savings account.
2. Index Funds
Another way to invest in the stock market is by investing in an index fund. An index fund isn’t technically a stock, but rather a portfolio of stocks and bonds. The goal of index funds is to mimic what’s going on in the stock market, to provide diversification within the holding. The belief is several stocks should outperform just one stock over several years.
Index funds are considered a low-maintenance investment because it’s generally considered better to hold them over time. Because you are holding a diversified portfolio through buying an index fund, you have a greater potential to see price growth over time, which can translate into earnings for holders.
3. Real Estate*
Another traditional form of investing is through real estate. It may be confusing as to why real estate is on this list, the truth is there are some low-maintenance ways to invest in this asset. First, you can buy a home or property, rather than rent one. This is a big move financially, but the rewards can be worth it. When you purchase a property in an area that appreciates in value, you have the potential to make thousands of dollars from your investment. Whereas with renting it’s not your “investment”, and you may even be spending more per square foot than you would with owning a home.
Another way to invest in real estate is by hiring a property management company to manage your rental property. A property management company can handle everything for you, and you pay them a portion of any potential earnings from your rental property. Although this can take away from your earnings, it makes your income passive, minus a few annual meetings or emails. So, if you have enough money to put a large down payment on a rental property, this could be an investment consideration.
It should be mentioned that property management companies will vary in the scope of service that they offer. Some companies will take care of nearly every aspect- from marketing the property, to screening tenants, & handling any potential evictions, while other companies will limit their services to basic daily maintenance & rent collection. When searching for a property management company, it is important that you are 100% clear on what is included in your agreement. You should also make yourself aware of any fees or expenses that you may incur should certain circumstances arise. Among such expenses might be the costs of repair, replacement, & parts in the case of significant maintenance. Many property management companies will cover these expenses only up to a certain dollar amount, if at all.
4. Invest in an IRA
There are two common types of IRAs: traditional and Roth. While traditional may be better in some cases, in this article we are going to focus on Roth IRAs. If you would like to learn more about traditional IRAs, you can read more here.1
If your employer does not offer 401(k) matching, then consider investing in a Roth IRA. A Roth IRA is a type of retirement account that most nurses can open. Unlike 401(k)s, a Roth IRA account has income limits for investing. If you make under $140,000 per year, or $208,000 for filing jointly married couples, you can open a Roth IRA.2 Across all nursing positions, the average nurse makes less than $140,000,3 so most nurses should be able to open a Roth IRA. With this account, you can only contribute a certain amount, which generally changes every year. In 2021, this amount is $6,000 for people under the age of 50, and $7,000 for people 50 and older. There are many retirement calculators4 available on-line that can provide an estimate of how much you can earn over time with interest. One downside of a Roth IRA is that you are subject to taxes and penalties if you withdraw before you are 59 1/2 and do not hold the account for a minimum of 5 years. But, if you do use it as a retirement account and withdraw later, this can be a potentially beneficial retirement option.
5. Peer-to-Peer Lending*
Peer-to-peer lending is another potential low-maintenance investment option, but it can take some research at first. This form of investing is where you lend your money to a peer that is trying to achieve something. Sometimes, people don’t qualify for loans from banks, so they have to turn towards others to invest in their business ventures. This could be building a commercial real estate building, developing a neighborhood, starting a business, or creating an app. In return for your investment in them, they agree to pay you back interest at a rate you both agree on.
There are many peer-to-peer investing platforms that you can use to find someone to lend money to. No matter what platform you choose, it’s crucial to do your research. Make sure they have a good track record, credit score, and that you believe in their business before lending them money. This can help save you from potentially making a poor investment or from getting scammed.
Investing For Nurses
It’s important to do your own research on each investment listed above before you invest into it. Every investment is variable and has risks involved, so a risk analysis is essential when putting your money towards something. If you would like an evaluation of your individual finances, contact our team. Our wealth strategists can provide you with help when you are considering low-maintenance investments.
1 “Traditional IRAs” Anonymous irs.gov, June 26, 2021
2 “Roth IRAs” Anonymous irs.gov, June 26, 2021
3 “Nurse Salary” Anonymous nursinglicensemap.com, February 2021
4 “Retirement calculator” Anonymous equitable.com
*Equitable Advisors, its affiliates, and its financial professionals do not offer real estate, real estate brokerage, mortgage loans, are not involved with any peer-to-peer lending or investments, nor do they offer any legal or tax counsel or any related advice or services on these topics. This article is provided as a convenience and intended for general informational purposes only, based on our understanding of the subject matter. You should consult with your personal advisors including qualified and appropriately licensed mortgage, real estate, tax and legal professionals regarding your needs, questions and particular circumstances before taking any action on the subjects discussed. Investments in real estate involve risks such as refinancing, economic impacts, property value changes, operating expenses, and management skill dependency. Peer-To-Peer lending involves unsecured loans between individuals, which are not insured, and can be a risky investment.