Savings – Investing

Investing for your future
To grow your money for your future, you want to invest because simply saving your money or putting it in low interest rate savings accounts will not grow it enough. Of course, low interest savings accounts can be part of your plan as described below. Just like any other money choice, you want to make a smart decision when considering your options. You do not need to become a stock market expert, but you also don’t want to blindly follow advice from a biased source. Again, make an informed decision. If you contact a professional, make sure they have appropriate credentials. I am not giving professional advice here and this is certainly not an investment seminar, but I’ll give you some things to think about.

First let me tell you my perspective. My goal is for you to make sensible, long term investing decisions that will provide you money for retirement and/or other dreams. I am wary of get rich quick schemes. Though some investments have a higher pay off, they may also be riskier. The idea is to grow your money over time, not gamble on some high growth, high-risk investment and get wiped out. The stock market is the best place for LONG TERM investing. Let me repeat the key phrase; long term investing. The stock market is risky, it goes up and down. But over time, it has always gone up. The key is; you have to be able to leave your money in the market long enough for it to build. Again, the market goes up and down, but over time, it has always gone up.

Generally, investment stocks as measured by the bench mark Standard and Poors index has never lost money for any 30 year period. The stocks may have gone down at some point but by the end of the 30 year period, the stocks made money. Even stocks bought before weathering the great depression, recovered by the late 1950s. So think long term, and only invest money you don’t need immediate access to. For money you need immediate access to, you may want to put it in a traditional bank savings account or a short term CD. Of course, you have to be careful about which particular stock you buy.

Diversify your investment; don’t put all your eggs in one basket. If you invest in one company and that company fails, you’re wiped out. The idea is to slowly and steadily grow your wealth. You won’t get rich over night, but you won’t get wiped out either.
Shop well; make sure you know what you’re paying for. There are brokerage fees and other charges that can be taken from your money. Remember the borrowing fundamentals section, where you advised you to identify what fees you are being charged and to get at least five offers from five different sources? Just like when you comparison shop for something you buy at the store, compare fees and terms.

Know the higher the growth potential, the higher the risk of you losing your money. As we’ve seen time and again, the stock market does not always go up. Investing carries with it risk, and it’s important to research and talk with certified professionals before you invest. Be aware of scams or get rick quick schemes. The safest way to grow your money is to get rich slowly with careful, diversified investments.

On to the next section!