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401(k) Plans
You have permission to this article either electronically or in print as long as the author bylines are included, with a live link, and the article is not changed in any way (typos excluded). Please provide a courtesy e-mail to ...
Are You Financially Fit?
When it comes to health, you go for a medical checkup to see if you're physically fit. The medical report will tell everything about your health.
But when it comes to wealth, it's as important that you do a regular checkup for your financial...
Different Types of Mutual Funds
This is a guide to the different types of mutual funds. When it comes to investing in mutual funds, investors have literally thousands of choices. Before you invest in any given fund, decide whether the investment strategy and risks of the fund...
Setting Financial Goals - Part 2
In my earlier article “Setting Financial Goals – Part 1” I identified the 4 simple steps to setting up achievable financial goals. I mentioned that your financial goals should be broken down into smaller more manageable goals and then written down...
The Conflict of Interest Game
Disgruntled investors are going after Wall Street once again, this time accusing one of investment bank Morgan-Stanley's high-tech mutual funds of making biased stock picks. Recent lawsuits allege the Morgan Stanley Technology fund was influenced...
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Finance Tips
Here are some useful finance tips to get you started on the right path to your finance success. Knowing how to secure your financial well-being is one of the most important things you'll ever need in life. You don't have to be a genius to do it. You just need to know a few basics, form a plan, and be ready to stick to it. No matter how much or little money you have, the important thing is to educate yourself about your opportunities.
There is no guarantee that you'll make money from investments you make. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
No one is born knowing how to save or to invest. Every successful investor starts with the basics. A few people may stumble into financial security - a wealthy relative may die, or a business may take off. For most people however, the only way to attain financial security is to save and invest over a long period of time. Time after time, people of even modest means who begin the journey reach financial security and all that it promises: buying a home, educational opportunities for their children, and a comfortable retirement. If they can do it, so can you.
Your "savings" are usually put into the safest places or products that allow you access to your money at any time such as a savings accounts. But there's a price to pay for security and ready availability. Your money earns less interest as it works for you.
Most smart investors put enough money in a savings product to cover an
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emergency, like sudden unemployment. Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.
But how "safe" is a savings account if you leave all your money there for a long time, and the interest it earns doesn't keep up with inflation? Let's say you save a pound when it can buy a loaf of bread. But years later when you withdraw that pound plus the interest you earned, it might only be able to buy half a loaf. That is why many people put some of their money in savings, but look to investing so they can earn more over long periods of time, say three years or longer.
You may prefer to invest your money in order to achieve a higher return compared to savings but you should be aware that when you "invest," you have a greater chance of losing your money than when you "save." You could lose your "principal," which is the amount you've invested. That's true even if you purchase your investments through a bank. But when you invest, you also have the opportunity to earn more money than when you save.
All investments involve taking on risk. It's important that you go into any investment in stocks, bonds or mutual funds with a full understanding that you could lose some or all of your money in any one investment.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
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