Smart Investments
Many people today are applying for another credit card or loan to survive the unfortunate economic situation we are in today, however there are others who do not need credit - instead, they are looking for good investments. If you have money to spare you might be one of these people, yet putting your extra cash in a savings account does not usually make the most financial sense. However, today, many of the investment options available can be risky; and, because of this, it is no wonder that people are skeptical about where to invest their money. Despite the skepticism in the air, there are actually options available for investing your money that are practically risk free.
It is easy to confuse a good investment with a risk free investment, because not all good investments are good, yet usually all risk free investments are good on some level. When you invest in a risk free investment, you do not have to worry about losing money from the investment; hence, the term risk free investment. When you are deciding which security to invest in, anything that has the potential to cause you to lose money is typically not something that you would classify as a risk free investment. Some securities, however, do not cause loss and therefore are risk free, including, savings bonds, treasury bills, and certificates of deposits (CDs).
Risk free investments are not only a less risky investment, but they can also be a smarter investment for a lot of individuals - especially those investing to save for the future. When it comes to investment securities, these assets are not as liquid as a regular checking or savings account. In other words, you cannot necessarily get the money invested in the assets back tomorrow if you need to. However, when you invest in a risk free investment, you do have a decent guarantee that the money you invested today will be there tomorrow - and, that is nice to know.
One of the most popular risk free investments in the ones you get from the government - savings bonds. When you invest in a savings bond, you are basically giving money to the government and accruing interest on it overtime; and, although the bank may not be there in 20 years to give you the return on your investment, the government will be. Although bonds do not promise a high rate of return, there is no risk to losing money when you invest in a bond; therefore, in the long run, it is a wise decision to invest in them.
Treasury bills (commonly called T-Bills) are another form of investment that is relatively risk free and popular in today's economy. T-Bills function very similarly to bonds, except they have a different time period. While your bond investment may take years to mature, your investment in a T-Bill will mature in one year or less; thus, it is a great risk free investment for the short run investment. Also, when it comes to T-Bills, your money is guaranteed at the maturity date, so you can expect some sort of return on your investment.
Certificates of Deposits (also called CDs) are a great risk free investment for those who are interested in investing their money over a few years time period. The time period usually ranges from anywhere between one quarter and five years, and once the CD has matured, you receive the principle plus the interest. The only downside to the CD is that sometimes they do not offer the same sort of tax breaks that other investments offer; however, they are definitely sound, sure, and risk free investments.
Obviously, not all investments are created alike and this is why many people seek the advice of a financial planner to help them with their investment needs. You might be interested in talking with a finance professional as well, so that you can be best advised on what to do when it comes to investing for the future. Whatever you do decide to do, be careful and cautious and make sure that you do not invest before you are sure - especially when it comes to riskier investments.
Some people get careless when they are investing their money and they put it all in risky investments where a higher rate of return is possible. However, a riskier investment ultimately involves the possible of losing money; and, it is always a great idea to invest money in securities that are sound and risk free to ensure you will get a return. It used to be that the stock market and housing market seemed to always provide some sort of return, however, today that is not always true.
Risk free investments might not provide the highest rate of return, but they do not allow for risk. Invest in savings bonds, T-Bills, and CDs today. You will be better off in the long run. - 23221
It is easy to confuse a good investment with a risk free investment, because not all good investments are good, yet usually all risk free investments are good on some level. When you invest in a risk free investment, you do not have to worry about losing money from the investment; hence, the term risk free investment. When you are deciding which security to invest in, anything that has the potential to cause you to lose money is typically not something that you would classify as a risk free investment. Some securities, however, do not cause loss and therefore are risk free, including, savings bonds, treasury bills, and certificates of deposits (CDs).
Risk free investments are not only a less risky investment, but they can also be a smarter investment for a lot of individuals - especially those investing to save for the future. When it comes to investment securities, these assets are not as liquid as a regular checking or savings account. In other words, you cannot necessarily get the money invested in the assets back tomorrow if you need to. However, when you invest in a risk free investment, you do have a decent guarantee that the money you invested today will be there tomorrow - and, that is nice to know.
One of the most popular risk free investments in the ones you get from the government - savings bonds. When you invest in a savings bond, you are basically giving money to the government and accruing interest on it overtime; and, although the bank may not be there in 20 years to give you the return on your investment, the government will be. Although bonds do not promise a high rate of return, there is no risk to losing money when you invest in a bond; therefore, in the long run, it is a wise decision to invest in them.
Treasury bills (commonly called T-Bills) are another form of investment that is relatively risk free and popular in today's economy. T-Bills function very similarly to bonds, except they have a different time period. While your bond investment may take years to mature, your investment in a T-Bill will mature in one year or less; thus, it is a great risk free investment for the short run investment. Also, when it comes to T-Bills, your money is guaranteed at the maturity date, so you can expect some sort of return on your investment.
Certificates of Deposits (also called CDs) are a great risk free investment for those who are interested in investing their money over a few years time period. The time period usually ranges from anywhere between one quarter and five years, and once the CD has matured, you receive the principle plus the interest. The only downside to the CD is that sometimes they do not offer the same sort of tax breaks that other investments offer; however, they are definitely sound, sure, and risk free investments.
Obviously, not all investments are created alike and this is why many people seek the advice of a financial planner to help them with their investment needs. You might be interested in talking with a finance professional as well, so that you can be best advised on what to do when it comes to investing for the future. Whatever you do decide to do, be careful and cautious and make sure that you do not invest before you are sure - especially when it comes to riskier investments.
Some people get careless when they are investing their money and they put it all in risky investments where a higher rate of return is possible. However, a riskier investment ultimately involves the possible of losing money; and, it is always a great idea to invest money in securities that are sound and risk free to ensure you will get a return. It used to be that the stock market and housing market seemed to always provide some sort of return, however, today that is not always true.
Risk free investments might not provide the highest rate of return, but they do not allow for risk. Invest in savings bonds, T-Bills, and CDs today. You will be better off in the long run. - 23221
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