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Wednesday, May 06, 2009

Are My Investment Options Right?

How you invest each month?
Where do you invest each month?
Why should invest in that place?
Have you ever said something like this to yourself?
Or questions like this:
"How many percent do I have to invest for retirement?"
"Which is better, life insurance or education savings education?"
"What benefit to invest in the Bank?"
Standard questions about the investment that is almost always met me at a seminar or do one of the talk shows in the media.
I do not blame the questions above. For the things you should ask before investing. Now it is for any posts made this, hopefully I can answer most questions you have about your investment.

What is investment?

According to you what is the investment?

If you walk all the time to shop and go to a bookstore, you will get a lot of explanation about what is the investment. All the theory of representation and provide a different explanation of the investment. But if I may ask a few opinions, I think investment is the "action for the purpose of improving or adding value or wealth that we possess"

How? Perhaps in my opinion this is not right, but I think this is the definition of investment. My words underline the action because the investment is an "action" is not a chimera. So if you plan to buy gold, then you have not invested. Or if you're just telling stories that will buy mutual funds, the investment that has not been said. But if you buy gold in order to expect the value of adding some future time even though it only 1gram, it is investment.
I also said action Underline the action will cause a result, whether negative or positive. For that we can be positive as a result of an action, while the negative can be used as the risk that we must also be ready to receive. So sum to invest, we must act for the act without significant results will not be obtained. Although the action that we must be ready with the possible results and of course the risk.

Investment Conduct

I am sure some of you are already investing. That there may be invested in deposits, or may add some more his wealth through property, some more happy with the gold. Whatever type of investment and how do you do, I say congratulations. This is far better than you do not invest at all. But if I may ask again as the title above, the investment options already right to you?
Before doing the investment, do the 3 steps below:

1. Define the purpose of financial
What is the difference in savings with the investment share? What's the difference between investing with the purchase of land by buying gold?

When you make the investment without a goal, you will be difficult. One client said that he is saving money in a savings account that is not exhausted. Some clients I also reasoned that he purchased the land of no investment. And there is also my client told him to buy gold so that the money does not go down in value compared to inflation. In general, do right. But it is an investment must have a purpose. Why is that? Because the purpose of each investment will result in the selection of different investment instruments, investment returns that are expected of different risks and have a ready received also different. For the purpose of short-term, get focus to liquidity risk and short-term means to search for products that the risk is low and high liquidity. Why? Because you need money .So do not reach the required time value of money you get off. In the long term, so choose products that liquidity and low risk but with the lopsided result of the high. Because you need the funds are still a bit old so the risk can be more easily guarded.

2. Identify the investment product
Related to the goals above, you should invest in the product of your choice. An investment product has advantages and disadvantages compared with other products. Products have long-term results in an excess of short-term while the products have the advantages in a low risk. Customize it with a goal that you want to achieve.

3. Customize your profile with the risk
What type of risk you’re personal? Whether happy or not at risk? You are happy to risk, may not be a problem choosing the product at risk. But for you that are not happy at risk, find the products that are not also at risk. Maybe some people happy to invest in stocks for long-term investments due to unbalanced results provide a full high profit.But some do not. They prefer to invest long term in the product property such as land or buildings as it was more definitive. In addition to private, there are more considerations, such as for example, age and status. Your age is high enough, should not invest in high-risk product. Similarly, vice versa. Why is this important? Usually because the investment returns are high for the product long-term goals. So if you have a high age, why invest for the long term?
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