Over time, you have pinched those pennies and you have increased your income or decreased the amount that you spend. Either way you may have savings and you just aren’t sure what to do with them. You worked hard for the money and you want to continue to make frugal choices that will benefit both you and your family. For most people, this can be a little overwhelming.
However, here are a few key ideas for investing the savings that you have worked so hard for. For some, the final goal is retirement. If this is you, it is important to look into different ways to turn that savings account into money that increases over time. You want enough to live on comfortably when it is time to tell your job goodbye.
If you are worried about risk, you can always leave some of your money in a savings account. Keep at least some of the money liquid and make it so that you still have access to some of the funds in case of emergency.
The stock market is one way to invest. Purchase stocks from companies that you feel confident about. Today, you can even buy just one share or part of a share with special DRP (Dividend Reinvestment Plans) or DSP (Direct Stock Purchase Plans). You don’t have to invest all that you have. Just put some money away a little at a time. While you may see fluctuations over time, you should be able to see an increase in the amount of wealth that you are accumulating.
If you want to “risk” a little more, you can invest in an Index Fund. It takes a little more money but if you have the time, there is a chance that you will see pretty good returns. It is important to note that none of these investments are going to be worthwhile for the short term. Long term investing is the best way to go.
An IRA is a popular choice for those looking to invest money from their savings. There is a limit to how much you can put in each year, but it grows as interest accumulates. You can deposit a certain amount each year and it also decreases your tax liability. This type of investment benefits you both now and later.
If you are looking to be more hands on with your money, some people are considering real estate as an option. With property and housing prices so low, there is a change to pick up rental properties at a low cost. While there is some maintenance and upkeep involved, many times, these expenses also reduce your tax liability and can benefit you in the short and long term.
You can also invest in something such as gold. Here, you purchase a certain amount and as its value increases, so does your investment. Most of the time you will need to work with a gold purchasing company or a broker in order to make purchase and sell what you have.
If you’re going to put your money in a savings account, shop around to find the best interest rate to make sure that the money is working for you.