Investments That Guarantee A Return
The current economic situation has forced many people more into debt, however, while others are going into debt, there are many people out there looking for good investment options. If you have extra money, it does not make sense to let it sit in a savings account; however, many of the investment options out there are also risky. For this reason, there are many individuals who seem skeptical about where to put their money. The good news is there are options for investment that are available today and at the same time are risk free.
It is easy to confuse a good investment with a risk free investment, because not all good investments are good, yet usually all risk free investments are good on some level. When you invest in a risk free investment, you do not have to worry about losing money from the investment; hence, the term risk free investment. When you are deciding which security to invest in, anything that has the potential to cause you to lose money is typically not something that you would classify as a risk free investment. Some securities, however, do not cause loss and therefore are risk free, including, savings bonds, treasury bills, and certificates of deposits (CDs).
These types of investments are not only risk free, but they can also be a smarter investment for many people who are working to save money for the future. If you are looking to invest in new securities, keep in mind that investments are not as liquid as your regular bank accounts (checking and savings). Basically, when you invest money, you cannot necessarily get it back tomorrow if you need to. Although investments are not as liquid, it is nice to know that when you invest in a risk free investment, you can know for sure that the money you invested today will be there tomorrow along with some sort of return.
Although there are different types of risk free investments, one of the most popular risk free investments is obtained from the government in the form of a bond. A government savings bond is a nice long-term investment security that accrues interest over time; and once it matures, you can count on getting your money because you invested in the government instead of a bank or the stock market. The downside of bonds is obviously the fact that they provide a lower rate of return, yet there is no risk and you are guaranteed at least some return on your investment.
Treasury bills (commonly called T-Bills) are another form of investment that is relatively risk free and popular in today's economy. T-Bills function very similarly to bonds, except they have a different time period. While your bond investment may take years to mature, your investment in a T-Bill will mature in one year or less; thus, it is a great risk free investment for the short run investment. Also, when it comes to T-Bills, your money is guaranteed at the maturity date, so you can expect some sort of return on your investment.
Certificates of Deposits (also called CDs) are a great risk free investment for those who are interested in investing their money over a few years time period. The time period usually ranges from anywhere between one quarter and five years, and once the CD has matured, you receive the principle plus the interest. The only downside to the CD is that sometimes they do not offer the same sort of tax breaks that other investments offer; however, they are definitely sound, sure, and risk free investments.
Obviously, not all investments are created alike and this is why many people seek the advice of a financial planner to help them with their investment needs. You might be interested in talking with a finance professional as well, so that you can be best advised on what to do when it comes to investing for the future. Whatever you do decide to do, be careful and cautious and make sure that you do not invest before you are sure - especially when it comes to riskier investments.
In the investment industry, a higher rate of return usually involves more risk, and therefore it is important to be cautious. Many people do reap the rewards of the higher return, yet there are others who end up losing money - that is the risk. And, for this reason that is why caution is important, especially in real estate and stock market investments. Don't Lose Money On Your Investments
Risk free investments might not provide the highest rate of return, but they do not allow for risk. Invest in savings bonds, T-Bills, and CDs today. You will be better off in the long run. - 23196
It is easy to confuse a good investment with a risk free investment, because not all good investments are good, yet usually all risk free investments are good on some level. When you invest in a risk free investment, you do not have to worry about losing money from the investment; hence, the term risk free investment. When you are deciding which security to invest in, anything that has the potential to cause you to lose money is typically not something that you would classify as a risk free investment. Some securities, however, do not cause loss and therefore are risk free, including, savings bonds, treasury bills, and certificates of deposits (CDs).
These types of investments are not only risk free, but they can also be a smarter investment for many people who are working to save money for the future. If you are looking to invest in new securities, keep in mind that investments are not as liquid as your regular bank accounts (checking and savings). Basically, when you invest money, you cannot necessarily get it back tomorrow if you need to. Although investments are not as liquid, it is nice to know that when you invest in a risk free investment, you can know for sure that the money you invested today will be there tomorrow along with some sort of return.
Although there are different types of risk free investments, one of the most popular risk free investments is obtained from the government in the form of a bond. A government savings bond is a nice long-term investment security that accrues interest over time; and once it matures, you can count on getting your money because you invested in the government instead of a bank or the stock market. The downside of bonds is obviously the fact that they provide a lower rate of return, yet there is no risk and you are guaranteed at least some return on your investment.
Treasury bills (commonly called T-Bills) are another form of investment that is relatively risk free and popular in today's economy. T-Bills function very similarly to bonds, except they have a different time period. While your bond investment may take years to mature, your investment in a T-Bill will mature in one year or less; thus, it is a great risk free investment for the short run investment. Also, when it comes to T-Bills, your money is guaranteed at the maturity date, so you can expect some sort of return on your investment.
Certificates of Deposits (also called CDs) are a great risk free investment for those who are interested in investing their money over a few years time period. The time period usually ranges from anywhere between one quarter and five years, and once the CD has matured, you receive the principle plus the interest. The only downside to the CD is that sometimes they do not offer the same sort of tax breaks that other investments offer; however, they are definitely sound, sure, and risk free investments.
Obviously, not all investments are created alike and this is why many people seek the advice of a financial planner to help them with their investment needs. You might be interested in talking with a finance professional as well, so that you can be best advised on what to do when it comes to investing for the future. Whatever you do decide to do, be careful and cautious and make sure that you do not invest before you are sure - especially when it comes to riskier investments.
In the investment industry, a higher rate of return usually involves more risk, and therefore it is important to be cautious. Many people do reap the rewards of the higher return, yet there are others who end up losing money - that is the risk. And, for this reason that is why caution is important, especially in real estate and stock market investments. Don't Lose Money On Your Investments
Risk free investments might not provide the highest rate of return, but they do not allow for risk. Invest in savings bonds, T-Bills, and CDs today. You will be better off in the long run. - 23196
posted by X - Men @ 5:12 AM
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