Some people are afraid to invest their money because they are afraid of losing it. Others are completely unsure of what investing their money entails and what it can do for them. Investing is a building block for a healthy financial standing if done properly and with some education. Don’t worry, you won’t have to go back to school! Today we are going to talk about ways to invest, why you should invest, and who to talk to get the assistance and understanding you need.
Leave Your Legacy Behind
We don’t think all too often about what happens when we pass on. Who gets your belongings? Who’s in charge of your funeral? Who is paying for everything? What will happen to your kids?
If you think we are about to talk about estate planning, you are right. More specifically, estate and succession planning. Investing money into our homes means that we can pass that on to our loved ones when we pass on. Retirement accounts will also require beneficiaries so that not only can they pay for your funeral, but they can have some left over to take care of themselves. No one wants to leave their children with mountains of debts and headaches so an estate planner and tax specialist is who you should employ to guarantee easier transition of an estate.
Build Your Savings
If you check around at interest rates for savings accounts, you will see that they are pretty dismal. When we are actively attempting to save our money for a vacation, much-needed home repairs, college fund for our children, or saving for an emergency fund, there are some low-risk options that can help you put aside some cash that will grow faster than your standard savings account.
Money market accounts are a popular option that offers a higher interest rate to grow your money. Most banks require a specific amount of money that has to be maintained in the account at all times. The great thing, and also the worse thing, is that your money is still accessible should you face an emergency and need it.
Certificates of Deposit are your next go-to for investing. You can purchase a certificate for as little as $25 at a credit union or $100 at a traditional bank. This money is not available to you during the maturation period. That will range anywhere from 90 days to five years, the longer the better because the high rate of interest is compounded annually (in some cases daily) and you can earn larger sums of money over time. If you are brand new to investing, this is a great way to get started. Who can help you with money market accounts and certificate of deposits? The financial manager at your bank will be the one who can educate you and guide you to the right option for your needs.
Retire With Ease
Retiring without any financial planning is an incredibly scary endeavor and one that all of us should avoid. No matter how close you are to retire, make sure you are investing your money into some kind of retirement account so that you have it later.
If you are working at a company that offers 401K, by all means, take that option. With just a small percentage taken out of your paycheck, you can build money for later. Consult with a financial advisor at the investing company they are paired with to learn more about the risks involved. Since 401K’s are stock and bond investing, you will need to learn low-risk, medium-risk, and high-risk options and how they can work for you.
Also, ask if your company does a matching program! If you are self-employed, check out Roth or SIMPLE IRA’s to invest your money in an easier manner. They both come with different tax options so you must talk with a financial planner or your CPA to ensure you are choosing wisely.
Investing often leads to strange money myths, like it’s too late to start saving, that inhibit us from making the most of our money. If you desire more money, you can do it with investing!