Most people do find themselves in some such situation, and many folks really have no idea how to go about investing their hard-earned money, or even the different types of investments that are available. If your idea of investing means using a piggy-shaped ceramic jar or the underside of your mattress as your'bank', fear no more because I bring you the good news. You no longer need your piggy or your mattress as your 'bank' because I hereby give cool information about the different types of investments available right at your fingertips.
1. Stocks: When you buy stock, you buy a piece of the company and any rights that go along with partial ownership. The way to make a profit with stocks is to buy low and sell high or to receive stock dividends. Stocks can be quite risky.
2. Bonds: When you invest in bonds, you are actually lending money, usually to a government agency. Bonds are much less risky than stocks.
3. Real Estate: When you invest in real estate, you may be purchasing with the intent to re-sell at a profit, or you may be buying property to use as rental property. Traditionally considered a sound investment, the real estate market is sometimes a buyer's market, so real estate investing could sometimes be tricky.
4. Foreign Currency: The Forex market is a currency-trading market that is open all the time and accessible via the Internet. With Forex, you trade currency pairs for other currency pairs in the hope that you will trade for currency that has more value.
5. Mutual Funds: When you invest in mutual funds, you are joining a group of others who are also investing in the mutual fund. Basically, you and the others share the cost of hiring a professional to manage your assets, and most mutual funds include a variety of different investments, such as high-risk, long-term, short-term, stocks, bonds, and the like.
6. Certificates of Deposit: Certificates of Deposit, or CDs, are similar to savings accounts, except they pay better interest. The reason for the higher interest rate is simple... when you open a CD at your local financial institution, you agree to leave the money there for a set amount of time; generally, the shortest amount of time is six months, but you may agree to a term of one year, two years, or even five years. The longer you agree to keep the CD, the higher the interest rate.
7. Insurance: Some people choose to use life insurance as an investment. Many policies have investment properties, and an insurance agent or financial advisor can help you choose the right one.
8. Savings Accounts: Savings accounts offer very little return; in fact, although they are technically a form of investment, they barely qualify anymore. They are certainly a very good way to teach your kids the process of saving, however.
9. Treasury Bills (TBs): Investing in TBs appears to be the least risky form of investment right now. The interest rates are much higher than what you will get from mainstream banks and the TBs are guaranteed by the Federal Government.
Of course there are other different forms of investment, such as investing in a start up company or some other form of business. But as you can see a variety of types of investment can add spice to your financial future.