There are Three Types of Savings that every household should have.
I am not talking about what has become commercially accepted as investments. Society has created this false since of financial security that most people see their cars and even their flat screen TVs as investments.
There may be many different views regarding investments saving. However, I am going to discuss investment saving that is critical for every household. Individuals should consider incorporating these basic types of investment saving today.
Starting with your bank account building its balance above the minimum balance requirement should be your first action. Moving towards savings, money market and time certificates are simple personal investments that you can have at your bank. These types of bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), providing coverage or protection up to $250,000 in deposits for tax identification number. This type of investment saving are liquid and can be used for emergency purposes and big ticket items. They may carry rate adjustments, lower interest or return on investment and low or no restrictions.
This serves as a bridge to bridge the gap to long-term saving. It allows you to test minimum risk for great reward (return on investment). Like personal saving, you can use time certificates that offer a fixed rate of return over the course of a contract that may range from one month to five years. Using individual retirement accounts (IRA) assets that are designed to help you save and earn money for retirement. It offers you tax breaks that will help you grow your retirement savings much more rapidly than you could in a regular account. With a banking institution you get another $250,000 in coverage, giving $500,000 total possible coverage at any one institution.
This is where the rubber meets the road. You must take on some long term investments’ saving that does not include your 401K. You must consider looking at Securities and Commodities for your retirement savings. Your securities must give you a solid mix of stocks, bonds and mutual funds. Your commodities must also include futures contracts for items like precious metals, grains, meats and crude oil. These products carry various levels of risk they can fluctuate in value and have risk to principal assets. These investments are not FDIC insured.
Listen Saturdays from 12-3pm to Financial Solutions with Rob Wilson Follow me @waokrobwilson