Plan your family budget and Save money 

Home Investment Partnership

So now you have some money and you are ready to invest

Cash and Cash Equivalents Lowest Return and Lowest Risks

One type of investment that you know and are probably using already is the bank account. Here you can get about 2.5% a year ($2.50 for every $100) for the money you have in your account. Not the best way to invest but an easy way to start.

Bonds Moderate Return with Lower Risk

Another easy way to invest are Bonds  . Bonds can be issued by a bank or company. Through the next four years you can earn 7 percent interest through a bond (Calculate that for a $100 investment and it comes out to about $130 after four years).

Another type of investment is the certificate of deposit (CD). CD's are a type of lending investment. With a CD you lend your money to a bank for a specific time, say 6 months, and they give you your money back with an interest rate of 6 to 7 percent compounded onto that amount. CD's are a guaranteed safe investment.

Stocks High Return and High Risk

Stocks, also called equities, represent ownership rights in a corporation or company.  You might receive dividends and share in the company's growth. However this is quiet high risk as there is  no guarantee that the company will grow and do well, so you could lose value rather than gain value. If you dont need your funds within a short period of time this can be profitable over the long run, stocks in general have always brought the highest return. If you've got time to recoup from down periods in the market, you should be able to tolerate the higher risk of stocks. The best way to make your money grow is through the stock market. Historically the stock market has on average returned 11 percent annually. However, the stock market can be the most volatile place in which you can lose a lot of your money You must realize that risk and return go hand-in-hand  

The stock exchange is efffected by a number of things such as world events, buy & sale of the stocks,  national and international security in adition to the stat of the company.

So which one is for you? Risk is a factor that plays a big role. How much risk do you want to take? If you're a low risk taker that needs the money in 1 year, a bond or CD is the best choice. If you can take a good amount of risk, without having your stomach churn every time you hear "The market dropped 200 points today", invest in stocks. Stocks are also a good way to invest if you don't need the money for another five years.

Investment selections and timing within the allocations are other factors. Consider your specific investment goals, financial resources, time frame, and risk tolerance. Some financial advisors suggest that you subtract your age from 120 to determine the percentage of your assets to invest in stocks. The remainder would be invested in bonds and cash or cash equivalents. For example:

• If you are 30 years old, invest 80 percent in stocks and 20 percent in cash and cash equivalents.
• If you are 50 years old, invest 60 percent in stocks and 40 percent in cash and cash equivalents.

History has shown that financial markets recover. And the longer you keep your money in the stock market the better it will grow to achieve your goal. Remember that the biggest risk is not taking one at all.

It is recommended to talk to a professional financial adviser in the field of investments as there are many stock exchanges in the world that you can invest in and also not to put all your money into the same plan, thus having more chance of earning even if one plan fails you can win over the long run.

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