Why to Invest ??
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Let's face it. You will not be able to work forever. No matter how healthy you are, there will come a time when you will not be able to work, due to health problems or simply aging. What will you do for an income when the time comes to retire? This is why planning your long term investments carefully is so important.
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Maybe you think you will be able to rely on Medicare and social security to take care of you during your retirement. Well, if that is your plan, it is time to look at the news. Social security is in trouble. Politicians are trying to repair the problem, but chances are in another twenty years, or even less, there will be little to nothing left for you in the social security budget.
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Finally, you never know what the future is going to hold. Will you stay healthy? Or, will you have some serious medical expenses that you will need to have finances for. Long term investments give you the security to know that in dire circumstances, money is there.
Short-term Investments
If you need to make money quickly, consider short term investments. Short term investments allow you to invest an amount of money at a high yield interest rate, and gain access to the return sooner rather than later.
There are several short term investment options out there, and the key to making money successfully is finding the best short term investments. And that starts with learning the answer to the question you probably have: what are short term investments?
Defining Short Term Investments
A short tern investment fund is a fund that earns you a return on your money in a short period of time, such as one to ten years. This is different than retirement investing, and it can be a challenge to find short team, high yield investments. Good short term investments will have a high interest rate, allowing you to earn substantial money immediately.
The Need for Short Term Investments
You might need short term investments if you have a pressing need coming up in the near future. If, for example, you might need to have a down payment for a house or car in a year or two, you could make use out of short term investment options. Also, you might use this type of fund in replacement of a traditional savings account, because you will earn a higher rate of return. Some even choose to use short term investment funds to supplement their retirement income.
How to Use Short Term Investments
If you are interested in short term investments, talk to your financial advisor. He or she can tell you what the best short term investment opportunity you can use will be. Then, invest your money, and leave it alone. Allow it to gain interest for the course of the investment period. When the fund comes to term, you will have earned interest on the money you invested.
Decide what amount of your total income you are willing to invest in your fund. Most people are comfortable with investing around ten percent of their total income. Then, choose the investment to use. It is best to take the amount and invest it into one particular investment. Your long term investments are where diversification is helpful.
Good Short Term Investments
A money market is an example of one of the good short term investment options. Money markets have higher interest rates than traditional savings accounts, but they limit the access to the money for a period of time. During that time, the money is earning accrued interest.
Investing in gold when the price is low, and then selling it when the price is high is another example of a short term investment. This works well because gold and silver both change quickly, and you can almost always find a time when the rate is low, and then hold onto your shares of gold or silver until the rate goes back up. Mutual funds also make great short term investments. The more money you invest in gold and silver, the less the swing in price has to be to allow you to make significant money.
Pros and Cons of Short Term Investments
There are pros and cons of short term, high yield investments. One of the cons is that the short term investments that carry high interest rates are often high risk type accounts. This means that you stand to lose money. To have less risk, you sacrifice your interest rate. Another con is that some types of short term investment options come with penalties should you need access to them early.
The pros of short term investments are that they allow you to make money for those expenses that you have right away. Unlike long term loans, you will have access to the money in a few short years. Not only that, but having short term investments actually works to protect your long term financial goals. This is because you have money available when you need it right away, rather than having to break into your IRA or other retirement fund early when an emergency occurs.
If you think you could benefit from looking into short term investment options, then talk to your financial advisor. This is the best way to find short term, high yield investments that can earn you money with the safest amount of risk. So no more excuses! Start working on your short term investments.