There are, however, two catches: Low-risk investments earn only modest or meager returns; and inflation can erode the purchasing power of money stashed in low-risk investments. Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to create diversification without much risk, and are typically sold by brokerage firms and mutual fund companies. You can’t read an income statement or balance sheet. Many investors gravitate towards buying and managing real estate investments because they are tangible and can offer a fairly passive form of income. Image source: Getty Images. Poor investing choices, too-frequent trading, high-cost brokers, mutual fund sales loads, and a host of other fees and errors secretly frittered away most of the investing profits.