Invest, Save and Grow Your Money

Investing your money is a good choice because you can beat inflation, achieve financial goals like buying a house or a car, and earn enough so you can stop working and retire! We will talk about the different ways you can choose to invest so we can achieve these goals.

1. Step 1

   High Interest Savings Accounts - This is a great place to start because before you can make risky investments you have to have a base to fall back on. A High Interest Savings Account is a great place to store your "Emergency Fund" that holds about 3-6 months worth of salary. An Emergency fund is a fall back plan in case you loose your job or anything bad happens. This type of savings account is good for this type of fund because it is very liquid and you can get to it in a hurry if you need it. Be careful not to make it to easy to get to because you will be tempted to tap into it for the smallest things. A good practice to get into is to automatically deposit a certain amount into this account from the bank account that you receive your paycheck. When money is automatically transferred and you do not see the money it makes it easier to save. High interest savings accounts typically are online and receive an interest rate anywhere from 1.5% - 4% APR.

2. Step 2

   401K or IRA - This is most people's main source for retirement (if a pension is not available). Most employers will match up to a certain percentage of what you put in here. The earlier you start investing in this fund, the earlier you can stop working and retire. The minimum you should contribute would be what your employer is willing to match because it is FREE money!

3. Step 3

   Stocks, ETFs, Mutual Funds, and Index Funds - You can pick these options to invest in depending on how much you have to invest. Index Funds are always a safe bet and one of my personal favorites. An index fund that tracks the S&P 500 is your ticket to an investment that has traditionally returned about 10% per year. There are usually very small administration fee so these are always a attractive option. Second on my personal list to invest in is an ETF fund. These are very similar to an index fund but usually does not cover a complete index. They are managed a little more than index funds so they sometimes have a higher administration fee but it is still very low compared to mutual funds. Mutual funds are third on my list because they have a high administration fee but still give you diversity. If this is where you want to put your money, I would suggest doing A LOT of research before you choice one. My last pick would be individual stocks because it does not give portfolio diversity like the other funds we talked about so far.