In today’s unstable, volatile financial environment, multiplied millions are finding one thing in common: they all need to know how best to both save and re-invest their money. While many economic experts say it cannot be done, this brief overview for beginner investors may help guide them through the financial maze and into economic stability.
An Emergency Reserve Fund
This is the first step and often the easiest achieved. Having at least a 3 – 6 month supply of reserved funds on hand to confront an unexpected financial crisis is vitally important. Funds can be kept at home or at another financial institution but consider it as “petty cash”; moreover, develop enough restraint to avoid regularly “dipping” into funds.
Today’s “information highway”, the Internet, can easily provide beginning investors the knowledge of knowing what to do with their finances as well as the ability to keep abreast of late breaking developments in the world of finances. Carefully research every step to be taken and don’t be too quick to reach a decision — choose wisely!
Set A Strategy
Having a plan or strategy for investments is primordial in order to start on the road to financial stability. Conversely, to set a course, one must know the destination. Is it early or late retirement? Perhaps it is the goal of putting one’s offspring through college? What is it you wish to do with the money and when? Be it one year from the present or ten years; a goal must be set and a strategy developed to get there — be it for a short, medium or long-range time frame.
In a nutshell, forget it. Stop looking to the bank for earnings as they are no longer generating sufficient interest to merit tying up one’s finances. Moreover, the iconic Federal Deposit Insurance Corporation (FDIC) is just an insurance company that has the name “federal” in its name. Should several banks go down at the same time, the insurance company also would suffer as presently there are only minuscule amounts of funds to guarantee bank holders their deposits.
Having cash flow in fairly liquid investments, online banking services, and short-term government obligations such as Treasury Bills or Treasury Notes means one can have fairly rapid access to one’s money. These also provide the flexibility needed to anticipate unexpected life and financial changes.
Learn the art of “laddering” medium range CDs or even Savings Bonds which may take up to 30 years to mature but can be redeemed after merely 5 years. This will take monitoring on your part but is well worth the effort.
Real estate holdings, utilities, long-term bonds and commodities such as gold are traditionally safe investment vehicles. Today, U.S. Savings I-Bonds and T.I.P.s are especially looking better as inflation indexes are creeping ever upwards.
In today’s unstable financial environment, multiplied millions are gradually finding stability by seeking to know how to best save money and invest their savings.