"Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones." - Benjamin Franklin

My wife Sue and I have been mulling over how to most effectively deploy cash in the current economic climate to generate decent returns without taking outsize risks. We've honed in on six main strategies, which I outline below in descending order of risk.

Since everyone has a varying amount of cash to invest, I'm going to specifically call out ways to deploy small amounts of cash in some of these strategies, as I want this post to be really actionable for anyone. The most important part is to just get started, and the biggest barrier to doing that is you thinking "I don't have any money to invest." So get yourself out of that mindset and jump into the world of being an investor, even if it's just with $25 (yes it's possible, below), $100, or $1,000 or $10,000, or whatever. I also recommend putting money aside every month to invest; that's a great way to get started.

Riskiest: Angel Investing

We've made a couple of angel investments, mainly in tech startups, including one in AngelList itself. And as I previously mentioned, I'm mulling over the idea of creating an AngelList syndicate. Syndicates allow backers to make investments as small as $2,500. The key here is to back a syndicate of someone you really trust, as they'll be the ones with their ear to the ground, picking the startups to invest your dollars in. But even then, it's incredibly risky. I wouldn't recommend investing in startups unless you're ready to plan on never seeing that money again. It's a feast or famine return structure, and your cash is typically locked up for years at a time and isn't at all liquid. If you think you want to try angel investing via a syndicate, then I invite you to back mine by reading this blog post and then registering on AngelList as a "backer." If I get enough interest, I'll spool it up. If you want to try investing on your own, play with this new AngelList fundraising filter that allows you to sort by amount raising, valuation, and even "signal" (screenshot above).

Just a Wee Bit Less Risky: Investing in Real Estate

Sue and I are very comfortable investing in real estate because we founded and ran a real estate brokerage years ago. Even so, we still tread carefully in this market. Real estate is typically a leveraged investment (since you're usually putting a down payment down with your own cash, but taking a loan out for the rest), which magnifies both the upside and downside. One option that we've just started looking into is diversifying under a Tenants In Common (TIC) model via sites like RealtyMogul. They call it "real estate crowdfunding," and it's an interesting approach. But generally, I'd recommend you avoid real estate investing unless you're ready to deal with 'toilets, tenants & trash' on a regular basis.

Risky: Betting on specific companies on the stock market

The level of risk here will depend on which stocks you choose. We made a big bet on TSLA and it's turned out well (so far). If you bet on a company like GE, it'll likely be much less risky, but conversely, you may not see much of a return (I held GE stock that was basically unchanged in value for a decade. Bummer.) The good news is that you can get started with ridiculously little cash. Buying a couple shares of a stock might run you $100, depending on the stock. And think about it this way: Owning just one share of a stock is infinitely different than owning zero shares, because just one share a) will still provide you a return on that cash if the stock does well and b) gets you into the mentality of being an investor.

Less Risky (but aggressive): Stock Market ETFs

There's a newish class of securities called ETFs (Exchange Traded Funds) that my wife recently schooled me on (thanks, wife!) and I've really been jazzed about. At a high level, an ETF is like an unmanaged mutual fund. It's just a basket of stocks that tracks a particular segment of the market. There are technology ETFs, biotech ETFs, manufacturing ETFs, etc. You buy an ETF just like a stock, by purchasing a share in it, which you can do via your online brokerage. But the beauty is that the risk is being diversified across many companies in the ETF's portfolio. And since it's unmanaged, the fees are typically much lower than for mutual funds (0.5% vs. 1.5% or more), and its goal is simply to track how well the stocks in that category do. The trick with ETFs is really in picking the right vertical. Do you think the biotech sector is going to outperform the market in general over the next 10 years? Then buy PJP, the PowerShares Dynamic Pharmaceuticals ETF (on NYSE), or IBB, the iShares NASDAQ Biotechnology Index ETF or any of the other biotech ETFs. Think tech is going to keep killing it? Then buy FDN, the First Trust DJ Internet Index Fund (on NYSE) or PNQI, the PowerShares Nasdaq Internet Portfolio. Each ETF takes a varying approach to a similar goal of tracking the vertical with a unique mix of companies in the portfolio. I love the idea of just picking a vertical I believe in, and then letting the ETFs find the next hot company in that space for me. Just like stocks, you can get into this for under $100, so give it a shot.

Even Less Risky (but by no means 'playing it safe'): Lendingclub

I was at a VatorSplash startup event where I heard the CEO of LendingClub, a peer-to-peer investing platform, talking about his company's growth. It was impressive. They've funded over $3.5 billion in loans (including over $250 million in the past month) and they've paid over $345 million out to investors in interest. Although there's a lot of talk about the sharing economy generally (think AirBnb, Getaround, Lyft, etc.), LendingClub might just be the giant of them all: Sharing your hard earned dollars with those who need them, and are willing to compensate you for loaning them out.

The idea behind LendingClub is this: Banks return a paltry, sub 1% return in checking & savings accounts. But credit cards often have a 15%+ interest rate. There's a huge spread there. If a lending platform could use technology to efficiently help investors get a higher return on their money than a bank's offering, while letting borrowers get a lower interest rate (on, say, their credit card debt), then everybody wins. That's exactly what they've done, and it's awesome.

But it gets even better. LendingClub lets you customize the level of return you want to get based on the amount of risk you're willing to take. Every borrower is scored between A1 (best) to G5 (worst). You can pick which types of loans you want to fund. The riskier borrowers will pay higher interest, but there will be more charge-offs. My wife and I created a fairly aggressive portfolio that is projecting a 10.15% annual return. Here's a screenshot:

You can see that the effective interest rate predicted is 18.51% based on our chosen mix of A through G notes we're funding, but 7.65% of that return is expected to be charged off, netting out to 10.15%.

The beauty of LendingClub is that your investment is divided into $25 chunks and is then diversified over hundreds or thousands of loans, which really mitigates your exposure. Think of it as your own personalized CDO :) LendingClub also has a service called "PRIME" which will invest the money for you based on the risk & return profile you specify (that's what the screenshot above is showing). The minimum investment amount for that service is $5k, and I recommend using it so you don't have to try picking the loans you want to fund manually. But if you don't want to put $5k into it, then you can get started with as little as $25, and it's the same story as stocks -- putting just a little money here is infinitely better than zero, if only to get you in the mindset of being an investor. Or conversely, if you have, say, $1MM to deploy and you're willing to put it to work at the risk level we chose above to achieve a projected 10.15% return, you could potentially earn $101k a year in interest income; enough to basically not have to work (don't forget about taxes, though; interest income is typically taxed at ordinary income rates, so cut 35%-ish off the top). You can learn more about peer-to-peer lending here.

Pretty Safe: GE Interest+

GE Interest+ is a great place to park cash if you don't want to invest it in any of the places above. Although it's not FDIC insured, it is backed by the General Electric corporation. It tends to perform as well as a 24 month CD (it's returning 1.05% right now if you have at least $50k there. Even at smaller amounts you're still getting about a 1% return. When interest rates go up, the returns can rise to 3% to 4% or more), but with a very important difference: It's liquid. You can write checks against it, like a checking account, so long as the check is for at least $250. You can get started with just $500, so if you have cash sitting in a checking account, or a savings account, or just under your mattress, I'd recommend moving it over here so at least you're earning the best possible return on it you can while still protecting it.

Really Safe: FDIC Insured account / Bank CD / US Treasuries, etc.

I'm not going to spend any time going over these options, as they're plentiful and you probably already know about them.

And it goes without saying, but I'll say it anyway: I'm not a financial advisor, and by following any of these tips you could end up penniless, living under a bridge for the rest of your life, so proceed at your own risk!

Do you have any other great suggestions? I'd love to get your pro-tips on ways to deploy cash effectively, especially in this market.