There is no secret that in today’s economic time, the small choices you make with your money will make the biggest impact on your future. It is important to grow and cultivate your money. When it comes to investing money, there is never an amount that is too large or too small. It’s how often and where you invest your money that makes the difference.
Practicing self-discipline and eliminating some of life’s little luxuries, not all, but some, and redirecting that money toward saving or investing can lead to a bigger financial pay-off in the long run. As women we are sometimes tempted and drawn to spend our extra money at the latest Macy’s sale or on the hottest pair of shoes. At the same time we must gain some self-control and make a conscious decision to be smart with our money.
Budgeting is the first step. If your budget is limited, save $25.00 a week; if your budget is larger, $100.00 or more per week then invest in an interest bearing account that can yield a nice amount of savings over time. Commitment and consistency are the true keys to building wealth through investing.
Suze Orman, an internationally acclaimed personal finance expert, suggests, Subtracting your age from 100; and investing that amount into Stocks/or Bonds. Suze notes that for long-term savings goals, stocks have the potential to generate inflation-beating gains. Focus your stock investments on those that pay dividends—payments a company makes to its shareholders. Sticking with a low-cost exchange traded fund (ETF) with a diversified portfolio of dividend payers is a smart strategy.
For all your long-term investments, such as retirement accounts that you won’t touch for at least ten years, Suze states that you need a mix of stocks and bonds. Stocks offer the best shot at inflation-beating gains. But stocks don’t always go up. That’s where bonds come into play: They have less upside potential, but they also do not pack the same risk. Subtract your age from 100 and invest that percentage of your retirement savings in stocks. The rest belongs in bonds. For the stock portion, put 70 percent in U.S. stocks and the rest in international funds. As for the bonds: You should definitely have some lower-risk investments in your 401(k), but rather than invest in a bond fund, look for a GIC or Stable Value fund, which offers a guaranteed return.
Develop an asset allocation strategy—the appropriate distribution of your money across several types of investments. This lowers your risk and earns you a higher return than if you just invested in one or two types of assets. Diversify your investments. Mutual funds, index funds and Exchange Traded Funds (ETFs) give you instant diversification with less risk than owning individual stocks.
You may want to discuss your options with a professional financial planner. It’s good to have a professional financial planner who has a securities license, this way they may be more knowledgeable about your investment options. Be sure to have a will in place, so your assets will not be held in probate should anything happen to you. It is also important to have adequate long term care and life insurance in place.
Investment Options:
Government Bonds*: These are risk-free investment options issued by the government. “Government securities and bonds give a higher rate of interest while keeping your money secure. You can be assured of returns because the government has options like raising taxes to repay your money,” say experts.
Fixed/Recurring Deposits*: Banks are the best places to invest your money. They grow your money slowly but steadily. If you have a decent sum of money, go for a fixed deposit but if you want to invest a small amount every month, a recurring deposit is a better option.
Mutual Funds*: A mutual fund is a professionally managed investment portfolio which can include stocks, bonds and securities. This diverse portfolio is managed by a fund manager. In a lot of mutual funds, 65 per cent of the money is invested in equity such as stocks and 35 per cent is invested in government bonds giving more than adequate short term returns.
Shares*: You will be investing capital into a company and will get a share of the profits in the form of dividends. The best time to invest in shares is when a company is coming up or when the economy is down, when the share prices picks back up, it can yield good returns.
Precious metals*: Gold, silver, platinum are a hot commodities to invest in now and can be a solid investment choice. Precious metals are stable in times of worldwide uncertainty, or when the economy is bad. Used correctly, they can be an effective component of a diversified investment portfolio, but remember, they are an investment like any others, and have an element of risk. Consider precious metals funds, because they are diversified and managed, and are the most stable.
Real Estate*: Investment in real estate is not completely risk-free but if current market trends continue, you will get high returns on your money.
Real estate is a very good option because you can pay the money in installments. Once the property’s value appreciates, you can sell it off and make a huge profit.
Small Business* Investing in small business is and will always be a great option for investing. Home based businesses in a variety of industries have the unique opportunity to launch with little overhead. Investing sweat equity in a home based business can generate a significant return on investment. Visit: www.SuccessWithNicola.com for investment opportunities.
* The above information is for informational purposes only. It is recommended that you consult with a Financial Planner, Business Broker or Private Banker before making any Financial Investments.
