Investing Your Hard Earned Money Wisely  

You can be a small business owner, CEO of a company, or a mere employee, yet it is equally important for you all to make investments for your future.

For employees, there is company pension to look forward to. However, many things happen in the interim and it is best to have a backup plan in case things go south.

One of the most effective ways to grow your money is to invest in the stock market. However, the success of your investment depends on a number of things including research, the performance of the economy, and some bit of luck.

Here are some tips on how to invest your hard-earned money for maximum return:

Assess

Make an assessment of your current financial position. Check your monthly income and determine what part of your income can be invested and which part cannot.

Segregate your funds into two: those that you need not touch in the next five years or so, and funds that you might need in the succeeding years. The funds that you will not need in the next few years are those that can be invested. The money that you might need should be invested in safe investments including short-term money market funds and savings deposit accounts.

Research

Find out everything you can about making investments. Research on different investment strategies, including stocks, mutual funds, and even futures trading strategies. Look up strategies that worked and those that didn’t work. Find out the typical timeframe and rates of return for your target investments. Read every publication you can get your hands to regarding investing.

This is one area of your life where too much research is never wrong. Investing wisely starts from the research process.

Find The Investment Option That Suits You

Once you have made all the necessary research, compare the advantages and disadvantages of the different investment options you have your eyes on. Compare their expenses, rates of return, and general performance.

Index funds generally perform better than managed mutual funds, if measured in the long run and they also entail lower expenses. However, you will need to invest in a long-term basis. On the other hand, managed mutual funds can range from short term to long terms.

Mutual funds also enable investors to withdraw their money subject to a management fee or penalty charge. This is important if there is a sudden need for the money, for example, in case of emergency.

Lastly, buying stocks at the stock market can be more active and will require the investor to check on the performance of his stocks himself. Having a stock broker will entail some expenses but will also free up some time for the investor.

Find Your Investment

Lastly, find the investment company that best suits your needs. It can be the mutual funds management company or the company offering index funds, or even the stock broker who will manage your stocks for you.

Invest time discussing the different options they offer so you can be sure you have the perfect fit. Don’t be afraid to ask questions. After all, this is your hard earned money that you are entrusting into their hands.

Tags: Index fund, Investment, Money market fund, Mutual fund, Stock

Category: Investing