Foundations of Finance

One mistake that some couples make when they are thinking about the future is mixing their investments with their savings. This mistake is made because they think of their investments as a form of savings. However, your investments could go under or turn around at a moment’s notice. If you lose your investments, you will want to know exactly how much you have in savings. You do not want to put any of the money that you need for emergencies into your investments, you will want to put that into savings so that you have access to it. The general rule that you should follow is that the money you will not need for seven years can go into your investments, while everything else should go into savings and the two accounts should be kept separate.

The unemployment rate is high and the economy is looking pretty ugly. As all of this is taking place inflation is sitting and waiting to emerge. Now is the time to prepare for this evil giant to enter. The best way to do this is by converting your liquid cash into sound investments. I want to share with you what I have learned through research on the best available investments.

Contrary to what many think, real estate is not necessarily a market you want to jump into right now. Consider this, thanks to low home prices the fed has dramatically lowered the national interest rate. The problem is potential investors need to consider inflation into this puzzle. As inflation happens the last thing to rise tends to be salaries. This will make paying off that mortgage really difficult.

With inflation it is a good idea to invest in goods and services that are rise with the inflation rate. One item that always seems to do this is gold. Thanks to this trend it a good industry to put your money in.

Another good investing opportunity for any investor living in this economy resides in commodities. A commodity is a product which people will always need regardless of the economy so their prices always increase.

Study your investment opportunities because realistically all that matters is your liquid money being converted to investments.

Several years ago, my highschool business and marketing teacher, in an attempt to convince us to “sieze the day”, exhorted the entire class to seriously consider opening a mutual fund while at such a young age.  He explained some of the legal implications, but specifically mentioned the huge economic benefits that it could bring in later years.  Of course the attitude of “want it now” put a damper on the idea, seeing as how we would have to wait for said benefits, but nonetheless he called on us to give it a try.  Today in a whirlwind economy, we are hardly interested in trusting financial firms, banks, and so on.  However i am still convinced that financial advisors are not motivated by commission in aquiring us as clients, but rather enjoy studying the market and will help us fullfill life’s adventures through wise investments in stocks, bonds, and investments in certain markets and fields.

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