Invest In Us
Here at Invest In Us we help you figure out what the differences are between high risk and low risk investments and what to do with that extra cash and where to put it.
Some Things To Think About
Before you invest think about risk and return. Risk is the possibility for loss on an investment, and return is the profit or loss made on an investment. One of the biggest risks investors face, even with low risk investments, is the loss of the purchasing power of the money invested due to inflation.
Although they are risk free, the safest investments generally offer the lowest return in the form of fixed rates of interest.
Bonds- Bonds backed by the U.S. government are considered to be almost risk-free because it's highly unlikely that the government would not pay back it's loans.
Certificate Deposits- A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. The term of a CD generally ranges from one month to five years. It is a time deposit that restricts holders from withdrawing funds on demand.
Money Market Mutual Funds- Money market funds provide investors with a safe place to invest easily accessible, cash-equivalent assets. It's characterized as a low-risk, low-return investment. It's more for short-term investment rather than long-term investment.
Treasury Bill- A short term debt obligation backed by the U.S. government with a maturity of less than one year. The government will not make regular interest payments to the holder. Offers tax advantages over other investment opportunities.
Municipal Bonds- A debt security issued by a state to finance its capital expenditures. Municipal bonds are favorable for being exempt from federal taxes and from most state and local taxes.
401k plan- is a retirement savings plan that employees can get. A general 401k plan is where money is usually deducted from your paycheck before taxes are withdrawn, which lowers your taxable income and therefore, lowers your taxes.
Corporate Bonds- A debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations.
Junk Bonds-Junk bonds are an IOU from a corporation or organization that states the amount it will pay you back, the date it will pay you back and the interest it will pay you on the borrowed money. With this bond pays high yields, they also carry higher-than-average risk that the company will default on the bond on you will never get your money back.
Stocks- Stocks typically are always high risk and for the most part give a generous return although not all the time.
Think of equity as ownership in any asset after all debts associated with it are paid off. Cars are an example, if it has no outstanding debt it is considered the owner's equity because he/she can sell the item for cash. So if you have a car that you've paid off and you don't want it anymore, sell it!
Diversification is the most common way for investors to maximize their returns and limit their risks. Instead of just going with one risk whether it may be high or low and waiting for a decent return, try this: put 70% or more than half investments for retirements in a variety of stocks, 20% in bonds, and 10% in CDs. By dividing your money up in various assets, you tend to better the chance of offsetting losses from one investment with gains from another.
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