With interest rates so low, trying to find a way to save money and earn interest can be difficult. Your run-of-the-mill bank savings account really only earns pennies on the dollar, and this doesn't provide you with much for the future. There are some other investments, however, that can help you plan for retirement or stockpile for a rainy day.
Your first step should be took look at what your company offers in terms of retirement plans. Many companies offer a 401 (k) plan, and this is simply a retirement plan where a portion of your income is deducted from each paycheck and then placed in a special account that earns interest. The best part about a 401 (k) is that most companies will match a portion of the money you put in it up to a set amount. That amount might by $5,000 or it might be $50,000. Either way, it's a great way to double the money you put aside for retirement. If your company doesn't offer this type of account, go to your bank and ask about IRAs or Investment Retirement Accounts. The money won't be matched, but it is still an excellent way to save for the future.
These days you hear a lot about investing in precious metals, such as gold or silver. The reason why people invest in these metals is because they tend to hold their value over time, and currently the price of gold especially is very strong. You can simply buy gold coins and store them in a good quality safe or a safety deposit box. Another option is to invest in a gold mutual fund, either a gold mutual fund or a gold exchange-traded fund. With a gold exchange-trade fund (ETF), the only asset in the fund is gold bullion. With a gold mutual fund, the investments are more varied, or diversified, and you will be putting money into mining operations for gold and other precious metals, as well as in gold bullion.
On that same topic, there are many other types of ETFs and mutual funds that can be smart investment opportunities. These are both funds, but they have some key differences. Both funds are generally diversified, spreading your money among many different holdings to decrease the overall risk. The value of your mutual fund is set at the end of each trading day. Mutual funds have some expenses attached to them, such as commission fees and redemption fees, and these funds are professionally managed.
ETFs, on the other hand, have a value that fluctuates during the trading day, so it might be higher at one point during trading then it is at the closing bell. With an ETF, you can actually sell shares during trading which might translate to more money for you. It works a bit like a stock in this regard, allowing selling and buying and adjusting value during the day. ETFs have some tax advantages over mutual funds, as well, and often the fees associated with mutual funds do not apply with an ETF.
Either way, you have plenty of choices of ETFs and mutual funds, although there are more mutual funds to consider. Generally, your fund will focus on a particular "topic" which might be a geographic area or perhaps a specific type of industry. You might invest in a mining fund or an energy fund or an alternative energy fund. The holdings will be spread among different types of energy companies. With a geographic fund, such as a China fund, the holdings will all be companies and investments in China and Hong Kong. China is not the only area of the world to invest in, and you can broaden your scope to include an Asia Pacific fund or invest in another region altogether, such as Russia, Latin America or even solely American holdings. It is wise to look at a variety of funds and to speak with a financial planner before you make a decision.
Your first step should be took look at what your company offers in terms of retirement plans. Many companies offer a 401 (k) plan, and this is simply a retirement plan where a portion of your income is deducted from each paycheck and then placed in a special account that earns interest. The best part about a 401 (k) is that most companies will match a portion of the money you put in it up to a set amount. That amount might by $5,000 or it might be $50,000. Either way, it's a great way to double the money you put aside for retirement. If your company doesn't offer this type of account, go to your bank and ask about IRAs or Investment Retirement Accounts. The money won't be matched, but it is still an excellent way to save for the future.
These days you hear a lot about investing in precious metals, such as gold or silver. The reason why people invest in these metals is because they tend to hold their value over time, and currently the price of gold especially is very strong. You can simply buy gold coins and store them in a good quality safe or a safety deposit box. Another option is to invest in a gold mutual fund, either a gold mutual fund or a gold exchange-traded fund. With a gold exchange-trade fund (ETF), the only asset in the fund is gold bullion. With a gold mutual fund, the investments are more varied, or diversified, and you will be putting money into mining operations for gold and other precious metals, as well as in gold bullion.
On that same topic, there are many other types of ETFs and mutual funds that can be smart investment opportunities. These are both funds, but they have some key differences. Both funds are generally diversified, spreading your money among many different holdings to decrease the overall risk. The value of your mutual fund is set at the end of each trading day. Mutual funds have some expenses attached to them, such as commission fees and redemption fees, and these funds are professionally managed.
ETFs, on the other hand, have a value that fluctuates during the trading day, so it might be higher at one point during trading then it is at the closing bell. With an ETF, you can actually sell shares during trading which might translate to more money for you. It works a bit like a stock in this regard, allowing selling and buying and adjusting value during the day. ETFs have some tax advantages over mutual funds, as well, and often the fees associated with mutual funds do not apply with an ETF.
Either way, you have plenty of choices of ETFs and mutual funds, although there are more mutual funds to consider. Generally, your fund will focus on a particular "topic" which might be a geographic area or perhaps a specific type of industry. You might invest in a mining fund or an energy fund or an alternative energy fund. The holdings will be spread among different types of energy companies. With a geographic fund, such as a China fund, the holdings will all be companies and investments in China and Hong Kong. China is not the only area of the world to invest in, and you can broaden your scope to include an Asia Pacific fund or invest in another region altogether, such as Russia, Latin America or even solely American holdings. It is wise to look at a variety of funds and to speak with a financial planner before you make a decision.
About the Author:
Cleveland Jernigan loves writing about investments. To get more information regarding Asia Pacific investments or to learn about various types of investment like Renminbi investment, check out these fund sites today.
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