8 High-Risk Investments That Could Double Your Money (2024)

When an investment vehicle offers a high rate of return in a short period of time, investors know this means the investment is risky. Given enough time, many investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite thepossibility of unattractive losses.

Make no mistake, there is no guaranteed way to double your money with any investment. But there are plenty of examples of investments that doubled or more in a short period of time. For every one of these, there are hundreds that have failed, so the onus is on the buyer to beware.

Key Takeaways

  • While finding investments that enable you to double your money seems almost impossible, any legitimate attempt would likely involve taking on a usual degree of risk.
  • There are some investments that might not double your money, but do offer the potential for big returns.
  • Some investment risks are manageable, as they are based on fundamentals, strategy, or technical research.
  • Rule of 72, options investing, initial public offerings (IPOs), venture capital, foreign emerging markets, REITs, high-yield bonds, and currencies, are all manageable investment risks.

1. The Rule of 72

This is not a short-term strategy, but it is tried and true. The Rule of 72is a simple way to determine how long an investment will take to double, given a fixed annual interest rate. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself.

For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72/10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double ((1.10^7.3) = 2). If you have the time, the magic of compound interest and the Rule of 72 is the surest way to double your money.

2. Investing in Options

Options offer high rewards for investors trying to time the market. An investor who purchases options may purchase a stock or commodity equity at a specified price within a future date range. If the security price turns out to be not as desirable during the future dates as the investor originally predicted, the investor does not have to purchase or sell the option security.

This form of investment is precarious because it places time requirements on the purchase or sale of securities. Professional investors often discourage the practice of timing the market, and this is why options can be dangerous or rewarding.

3. Initial Public Offerings

Some initial public offerings (IPOs), such as Snapchat's in mid-2017, attract a lot of attention that can skew valuations and the judgments professionals offer on short-term returns. Other IPOs are less high-profile and can offer investors a chance to purchase shares while a company is severely undervalued, leading to high short- and long-term returns once a correction in the valuation of the company occurs. Most IPOs fail to generate significant returns, or any returns at all, such as the case with SNAP.

On the other hand, Twilio Inc. (TWLO), acloud communications company that went public in June of 2016, raised $150 million at an IPO offer price of $15 a share. On its third day of trading, Twilio was up 90 percent and by mid-December was up 101%.

IPOs are risky because despite the efforts make by the company to disclose information to the public to obtain the green light on the IPO by the SEC, there is still a high degree of uncertainty as to whether a company's management will perform the necessary duties to propel the company forward.

4. Venture Capital

The future of startups seeking investment from venture capitalists is precarious and uncertain. Many startups fail, but a few gems can offer high-demand products and services that the public wants and needs. Even if a startup's product is desirable, poor management, poor marketing efforts, and even a bad location can deter the success of a new company.

Part of the risk of venture capital is the low transparency in management's perceived ability to carry out the necessary functions to support the business. Many startups are fueled by great ideas by people who are not business-minded. Venture capital investors need to do additional research to assess the viability of a brand new company securely. Venture capital investments usually have very high minimums, which can challenge some investors. If you consider putting your money into a venture capital fund or investment, make sure to do your due diligence.

5. Foreign Emerging Markets

A country experiencing a growing economy can be an ideal investment opportunity. Investors can buy government bonds, stocks, or sectors with that country experiencing hyper-growth or ETFs that represent a growing sector of stocks. Such was the case with China from 2010-2018. Spurts in economic growth in countries are rare events that, though risky, can provide investors with a slew of brand new companies to invest in to bolster personal portfolios.

The most significant risk of emerging markets is that the period of extreme growth may last for a shorter amount of time than investors estimate, leading to discouraging performance. The political environment in countries experiencing economic booms can change suddenly and modify the economy that previously supported growth and innovation.

6. REITs

Real estate investment trusts (REITs) offer investors high dividends in exchange for tax breaks from the government. The trusts invest in pools of commercial or residential real estate.

Due to the underlying interest in real estate ventures, REITs are prone to swings based on developments in an overall economy, levels of interest rates, and the current state of the real estate market, which is known to flourish or experience depression. The highly fluctuating nature of the real estate market causes REITs to be risky investments.

Although the potential dividends from REITs can be high, there is also pronounced risk on the initial principal investment. REITs that offer the highest dividends of 10% to 15% are also, at times, the riskiest.

While these investment choices can provide lucrative returns, they are marred by different types of risks.While risk may berelative, these investmentsrequire a combination ofexperience, risk management, and education.

7. High-Yield Bonds

Whether issued by a foreign government or a high-debt company, high-yield bonds can offer investors outrageous returns in exchange for the potential loss of principal. These instruments can be particularly attractive when compared to the current bonds offered by a government in a low-interest-rate environment.

Investors should be aware that a high yield bond offering 15 to 20% may be junk, and the initial consideration that multiple instances of reinvestment will double a principal should be tested against the potential for a total loss of investment dollars. However, not all high-yield bonds fail, and this is why these bonds can potentially be lucrative.

8. Currency Trading

Currency trading and investing may be best left to the professionals, as quick-paced changes in exchange rates offer a high-risk environment to sentimental traders and investors.

Those investors who can handle the added pressures of currency trading should seek out the patterns of specific currencies before investing to curtail added risks.Currency markets are linked to one another, and it is a common practice to short one currency while going long on another to protect investments from additional losses.

Currency, or forex trading, as it is called, is not for beginners. The forex market allows for high leverage. Brokers offering 50:1 leverage is standard, which can be additionally risky for investors if not used appropriately.

What Are High-Risk Investments?

High-risk investments include currency trading, REITs, and initial public offerings (IPOs). There are other forms of high-risk investments such as venture capital investments and investing in cryptocurrency market.

What Is Forex Trading?

The forex market involves trading one form of currency for another, and it has different margin requirements for trades than the stock market. Forex can be a complex market for beginners to navigate.

Are Penny Stocks High-Risk Investments?

Penny stocks (often sold for $5 or under a share) may sound simple but they can become a high-risk investment if a trader is not experienced in trading over the counter. Penny stocks have a lack of liquidity or ready buyers in the marketplace due to the nature of the company and the small size of the shares. These stocks are known as speculative and if you overinvest in them, you stand to lose your investment, which makes them a potentially risky venture.

The Bottom Line

High-risk investments are not for everyone. These investments may have a high chance of loss coupled with the potential for high returns. While some high-risk investments are enticing, it may be advisable to do your homework. By building knowledge of what the risk is and how it can impact you financially, you may be able to include some higher-risk investments in your portfolio and continue to have holdings with a lower potential loss as well.

8 High-Risk Investments That Could Double Your Money (2024)

FAQs

How to turn $5000 into $10000? ›

How can you make $5,000 turn into $10,000? Turning $5,000 into $10,000 involves investing in avenues with the potential for high returns, such as stocks, ETFs or real estate. Another approach is to use the money as seed capital for a profitable small business or side hustle.

How to invest $1,000 dollars and double it? ›

Here's how to invest $1,000 and start growing your money today.
  1. Buy an S&P 500 index fund. ...
  2. Buy partial shares in 5 stocks. ...
  3. Put it in an IRA. ...
  4. Get a match in your 401(k) ...
  5. Have a robo-advisor invest for you. ...
  6. Pay down your credit card or other loan. ...
  7. Go super safe with a high-yield savings account. ...
  8. Build up a passive business.
Apr 15, 2024

How to double 10k quickly? ›

Think about the type of strategy that works best for you, and then dive in!
  1. Flip Stuff For Money. ...
  2. Invest In Real Estate. ...
  3. Start An Online Business. ...
  4. Start A Side Hustle. ...
  5. Invest In Stocks & ETFs. ...
  6. Fixed-Income Investing. ...
  7. Alternative Assets. ...
  8. Invest In Debt.
May 24, 2024

What investment has the highest risk and high return? ›

Some of the best high-risk investments include:
  • Initial public offerings (IPOs)
  • Venture capital.
  • Real estate investment trusts (REITs)
  • Foreign currencies.
  • Penny stocks.
Feb 25, 2024

How to turn $10,000 into $100,000 fast? ›

To potentially turn $10k into $100k, consider investments in established businesses, real estate, index funds, mutual funds, dividend stocks, or cryptocurrencies. High-risk, high-reward options like cryptocurrencies and peer-to-peer lending could accelerate returns but also carry greater risks.

How to turn $10,000 into $20,000 quickly? ›

How to Turn 10K into 20K Fast?
  1. Flip stuff.
  2. Start a blog.
  3. Invest in real estate with EquityMultiple.
  4. Start an online business.
  5. Write an email newsletter.
  6. Help others learn with online courses and webinars.

How much money do I need to invest to make $4000 a month? ›

Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.

How much is $1000 a month for 5 years? ›

In fact, at the end of the five years, if you invest $1,000 per month you would have $83,156.62 in your investment account, according to the SIP calculator (assuming a yearly rate of return of 11.97% and quarterly compounding).

How to invest $500 dollars for quick return? ›

This could include stocks, bonds or alternative investments, among others.
  1. Investing In Stocks. To get started, you don't have to spend $500 on one stock. ...
  2. Investing In Bonds. ...
  3. High-Yield Savings Account. ...
  4. Certificate of Deposit (CD)
  5. Commission-Free ETFs. ...
  6. Mutual Funds. ...
  7. An IRA or Roth IRA.
Mar 19, 2023

How to make 100K a year in passive income? ›

Ways to Make $100,000 Per Year in Passive Income
  1. Invest in Real Estate. Rental properties generate income through tenants who pay rent each month to live in a property you own. ...
  2. CD Laddering. ...
  3. Dividend Stocks. ...
  4. Fixed-Income Securities. ...
  5. Start a Side Hustle.
Jul 28, 2023

How to turn 50K into 100K? ›

How To Turn 50K Into 100K – The Best Methods To Double Your Money
  1. Start An Online Business. ...
  2. Invest In Real Estate. ...
  3. Invest In Stocks & ETFs. ...
  4. Invest In A Blog. ...
  5. Retail Arbitrage. ...
  6. Invest In Alternative Assets. ...
  7. Create A Rental Business. ...
  8. Invest In Small Businesses.
May 24, 2024

How can I make 10k ASAP? ›

Here are ten ways to make $10k quickly:
  1. Become A Freelancer. Freelancing is one of the most popular ways to make money quickly. ...
  2. Invest In Cryptocurrency. ...
  3. Participate In Online Surveys. ...
  4. Become A Virtual Assistant. ...
  5. Do Odd Jobs. ...
  6. Create An Online Course. ...
  7. Become An Affiliate Marketer. ...
  8. Sell Your Stuff.

How to get 10% return on investment? ›

Investments That Can Potentially Return 10% or More
  1. Stocks.
  2. Real Estate.
  3. Private Credit.
  4. Junk Bonds.
  5. Index Funds.
  6. Buying a Business.
  7. High-End Art or Other Collectables.
Sep 17, 2023

What not to invest in right now? ›

3 investing mistakes to avoid right now
  • Not investing in gold. The price of gold has surged in recent months, partly due to its reputation for hedging against inflation and diversifying portfolios. ...
  • Not diversifying your portfolio. ...
  • Not keeping a close eye on the economy. ...
  • The bottom line.
May 3, 2024

What are the two riskiest investments? ›

While the product names and descriptions can often change, examples of high-risk investments include:
  • Cryptoassets (also known as cryptos)
  • Mini-bonds (sometimes called high interest return bonds)
  • Land banking.
  • Contracts for Difference (CFDs)

How to invest $5000 dollars for quick return? ›

Here are seven expert-recommended strategies for investing $5,000 effectively:
  1. S&P 500 index funds.
  2. Nasdaq-100 index ETFs.
  3. Sector ETFs.
  4. Thematic ETFs.
  5. ESG ETFs.
  6. BDCs.
  7. REITs.
3 days ago

How can I double $5000 quickly? ›

5 ways that you can double your money
  1. Get a 401(k) match. Talk about the easiest money you've ever made! ...
  2. Invest in an S&P 500 index fund. An index fund based on the Standard & Poor's 500 index is one of the more attractive ways to double your money. ...
  3. Buy a home. ...
  4. Trade cryptocurrency. ...
  5. Trade options.
Nov 3, 2023

How to flip $5,000 fast? ›

How To Make Money With 5000 Dollars: 12 Proven Methods!
  1. Build A Niche Website.
  2. Buy And Sell On eBay.
  3. Create An eCommerce Store.
  4. Build An Online Course.
  5. Flip Websites.
  6. Start A Podcast.
  7. Create And Sell An Ebook.
  8. Start A Content Agency.
May 1, 2024

How to make $10 000 quickly? ›

Here are ten ways to make $10k quickly:
  1. Become A Freelancer. Freelancing is one of the most popular ways to make money quickly. ...
  2. Invest In Cryptocurrency. ...
  3. Participate In Online Surveys. ...
  4. Become A Virtual Assistant. ...
  5. Do Odd Jobs. ...
  6. Create An Online Course. ...
  7. Become An Affiliate Marketer. ...
  8. Sell Your Stuff.

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