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Introduction |
| Benjamin Franklin
once said, "A penny saved is a penny
earned." That saying really doesn't hold
in today's world. In the world today it
really should be, "A penny saved is two
pennies earned." You are probably
wondering now this is possible, well thanks
to all the investments you can make today
you can turn your savings into profits.
These are two essential parts when starting
out in investing. If you didn't catch what
I just said the two parts are:
- saving
- investing |
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Financial
Planning |
| So
all I really have to do is have the control
to save the money right? Well that is a all
good but actually what you should do first
is to decide on what your goals are. The
questions to ask yourself are:
-
What is my goal that I am trying to achieve?
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What do I want to buy with the money that I
make?
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How long am I going to save to reach my
goal?
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How much risk is involved in achieving my
goal?
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Am I willing to lose some money in order to
gain some?
There
are two kinds of goals, long term and short
term, these goals mean exactly what they
imply. The long term goals may take a year
or more to be achieved while the short term
goals can usually be achieved in less than
one year. |
| Long
Term |
Short
Term |
| Vacation |
Clothes |
| Car |
Video
Games |
| College |
CDs |
|
| All
right, now that you have your goals set here
is the hard part. Saving money can be hard,
but here are some places where you can look
to get some money. |
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Allowance Some of you may get an
allowance, be it from your parents/guardians
or other family members. You should consider
yourself lucky because that allows you to
put a small portion of that allowance apart
to invest. |
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Gifts You know how you hate getting
clothes from your family as gifts well,
sometimes they do cave in and will give you
money. That would be your lucky break! If
you save that money and invest it, even a
little at a time, you have a chance of
making a profit. |
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Job Do you flip burgers? or Hey, you
might even mow lawns, but no matter what you
do to get money put some aside to save. This
is one of the best ways to add to a savings
account. It may not be the easiest but at
times it can be the quickest. |
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| Now
that you have the money what do you do with
it? That question can be simply answered
with two words, INVEST IT. It may sounds
simple but you look beneath the surface you
can be taken aback. Here are the basics of
where you can put your money& |
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Banking
Account |
| This
is probably that safest way to invest your
money, because you don't have to worry
about losing your money. However having such
a low risk venture usually means that there
will be less earnings. |
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Purchasing
Stocks |
| Stocks
are shares in a company. When you invest in
a company's stock or buy its shares, you own
part of a company. If the company makes
money, your stock will increase in value,
therefore if you sell at that time you will
make a profit. This is a high risk venture
and is good for those with solid stomachs.
You can watch your money go on a
roller-coaster ride everyday. This
instability also shows that the greater the
risk the larger the return. |
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| Mutual
Funds |
Money
Market Mutual Funds |
| This
is similar to a bank savings account in that
it has little risk, however it is just a bit
more risky than the bank. This means that
there is a greater chance to make more
money. An investment in the money market is
not guaranteed to make money and there is a
risk of losing money when investing in this
fund. |
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Bond
Mutual Funds |
| This
is a higher risk venture than Money Market
Mutual Funds. As stated before the bigger
the risk the better the return, and this has
a greater return than both the bank and the
Money Market Mutual Funds. Bond Mutual
Funds, like stocks, can have its rough days.
This is more of a long-term investment due
to the fact that you have a greater chance
of coming out ahead the longer that you stay
in. |
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Stock
Mutual Funds |
| This
is type of account has the most risk
associated with it. As said before, you have
a greater chance of making money due to the
large risk involved. Stock Mutual Funds are
very volatile. You have to make sure that
you will be comfortable with this. This is
also a long term investment due to the same
reasons as the Bond Mutual Funds. |
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