Where to Invest Your Money?

investPart of personal finance is making your money grow through investments. The tough part, however, is how to place your hard earned cash wisely.

Savings account- definitely you need to toss a portion of your income into your savings account. This is a safe place for your money to stay, to ensure that you won’t spend it on unnecessary expenses. Unfortunately, this doesn’t yield very high returns, so it’s not wise to put everything in here.

Low risk investments- like your basic bank account, these types of investments are pretty stable but doesn’t offer very high returns. Examples are mutual funds, certificate of deposits, annuities, and treasury bills.

Medium risk investments- as the term suggests, these investments have a higher level of risk, but also with a bit higher returns. Examples are bonds and real estate.

High risk investments- placing your money at high risk investments is like gambling, but they do yield the highest rate of returns. Examples of this are stocks. Of course, while you can’t predict what will happen in the market, you can ask for advice from the experts and study the trend before making a big move.

Diversity is Key

There’s no definite answer as to where you should put your money, but rather, I advise for you to diversify your investments. Decide on how much money should go into a safe investment to ensure that you’ll be able to meet your retirement needs. Meanwhile, if you can spare a little extra, play a little with medium risk investments and aim for higher returns.

If you have a little more room for higher risk investments, it also pays to include them in the mix. Like gambling, make sure that the money you put into this is the amount that you can afford to lose. If you win though, this money can be used to treat yourself on a sudden trip or make another investment if you like.

To further know the basics of investing, read this helpful guide from Investopedia.

0 Flares Twitter 0 Facebook 0 Filament.io 0 Flares ×