These days with the market in chaos, there are many questions over what the best way to invest money is. Depending on your personal situation you may have a few options, this article will take you through a few of your options and help you decide which is the best course of action for you.
How old are you? The reason I ask is that where you stand in life can make a big difference in deciding what the proper investments are for you. Younger investors can afford to be more risky with their investments simply because they aren't likely relying on that income for retirement. If you fall between the ages of 20-35, any moderate losses you sustain in the market can be made up over the next 30 or so years.
If you are an older investor you need to take your current retirement situation in to consideration. If you are planning on retiring in the near future you need to be sure to invest in something much less risky than stocks, preferably secure bonds, treasury bills or bonds, money market investments or something that virtually guarantees you income, even if it only a small percentage return.
The second thing you need to consider is your every day income level. They say money makes money, and unfortunately for the common man that is very true. Investors in high tax brackets can afford to deal with the wild swings the stock market sometimes experiences, while an investor that relies heavily on their day to day income can't make up a heavy loss as easily and therefore needs to invest in something more secure. Secure investments don't typically pay the high returns that the risky investments do, although there are some occasional exceptions.
Lastly, take a look in your wallet and tell me how many credit cards you have. Do they have large balances? Before you invest a single dime in investments, pay off your credit cards completely. The reason for this is that normally credit card interest rates are much higher than your return on investment, and it would therefore make very little sense to spend the money anywhere but paying off your debt.
How old are you? The reason I ask is that where you stand in life can make a big difference in deciding what the proper investments are for you. Younger investors can afford to be more risky with their investments simply because they aren't likely relying on that income for retirement. If you fall between the ages of 20-35, any moderate losses you sustain in the market can be made up over the next 30 or so years.
If you are an older investor you need to take your current retirement situation in to consideration. If you are planning on retiring in the near future you need to be sure to invest in something much less risky than stocks, preferably secure bonds, treasury bills or bonds, money market investments or something that virtually guarantees you income, even if it only a small percentage return.
The second thing you need to consider is your every day income level. They say money makes money, and unfortunately for the common man that is very true. Investors in high tax brackets can afford to deal with the wild swings the stock market sometimes experiences, while an investor that relies heavily on their day to day income can't make up a heavy loss as easily and therefore needs to invest in something more secure. Secure investments don't typically pay the high returns that the risky investments do, although there are some occasional exceptions.
Lastly, take a look in your wallet and tell me how many credit cards you have. Do they have large balances? Before you invest a single dime in investments, pay off your credit cards completely. The reason for this is that normally credit card interest rates are much higher than your return on investment, and it would therefore make very little sense to spend the money anywhere but paying off your debt.
About the Author:
Charles Johnson is a personal finance writer for PE Financial Services. Visit PE Financial for articles on investments, loans, insurance, and the best way to invest money in this difficult economy.
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