These days, you can’t retire without using the returns from investments.
You can’t count on your social security checks to cover your expenses
when you retire. It’s barely enough for people who are receiving it now
to have food, shelter and utilities. That doesn’t account for any care
you may need or in the even that you need to take advantage of such
funds much earlier in life. It is important to have your own financial
plan. There are many kinds of investments you can make that will make your life much easier down the road.
The following are brief descriptions for beginning investors to familiarize themselves with different kinds of investment options:
401K Plans
The easiest and most popular kind of investment
is a 401K plan. This is due to the fact that most jobs offer this
savings program where the money can be automatically deducted from your
payroll check and you never realize it is missing.
Life Insurance
Life
Insurance policies are another kind of investment that is fairly
popular. It is a way to ensure income for your family when you die. It
allows you a sense of security and provides a valuable tax deduction.
Stocks
Stocks
are a unique kind of investment because they allow you to take partial
ownership in a company. Because of this, the returns are potentially
bigger and they have a history of being a wise way to invest your money.
Bonds
A
bond is basically a promise note from the government or a private
company. You agree to give them a set amount of money as a loan and they
keep it for a set number of years with a predetermined amount of
interest. This is typically a safe bet and one that is a good investment
for a first time investor because there is little risk of losing your
money.
Mutual Funds
Mutual funds
are a kind of investment that are based on the gains and losses of a
shareholder. Basically one person manages the money of several or many
investors and invests in a list of various stocks to lessen the effect
of any losses that may occur.
Money Market Funds
A
good short-term investment is a Money Market Fund. With this kind of
investment you can earn interest as an independent shareholder.
Annuities
If
you are interested in tax-deferred income, then annuities may be the
right kind of investment for you. This is an agreement between you and
the insurer. It works to produce income for you and protect your earning
potential.
Brokered Certificates of Deposit (CDs)
CDs
are a kind of investment where you deposit money for a set amount of
time. The good thing about CDs is that you can take the money out at any
time without paying a penalty fee. We all know life isn’t predictable,
so this is a nice feature to have in your option.
Real Estate
Real Estate
is a tangible kind of investment. It includes your land and anything
permanently attached to your piece of property. This may include your
home, rental properties, your company or empty pieces of land. Real
estate is typically a smart and can make you a lot of money over time
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