As a youngster, I can remember vividly doing my chores for what seemed like a lot of money. I would religiously wash the dishes, clean the bathroom, dust furniture, or whatever else I was asked to do in order to earn a buck. And what did I do with my earnings you ask? The answer is absolutely nothing. I would just accumulate dollar bills and then spread them out on my bed as if these green pieces of paper were part of a great discovery, and count them as many different ways as I could think of counting the same sum.
The truth is I was only making about five dollars a week for all of my hard work and what I considered a lot of money was probably no more than forty dollars, but when you’re seven years old that’s a lot of money! For years I continued this trend as I went on to get real jobs with actual paychecks. I spent some money but my savings account was mighty healthy. Then one day my father introduced me to the stock market. I thought it was a wonderful idea; your money can make even more money.
It is true that the stock market can also lose you money, lots of it…quickly. However, playing things smart can help ensure safe investing. The great investor Warren Buffett believes strongly in a buy and hold strategy with the belief that most stocks will go up over time. As young adults, this should be a sign to us that we have enough time to make some money off the markets, even if we lose money in the short term.
Some people view the stock market as gambling and would rather stay away from it. I can sympathize with that. The stock market isn’t the only way to put your money to work. A certificate of deposit is a wonderful option for those who do not want to worry about where their money is but understand the value of gaining a return on your savings. CDs can be taken out for periods ranging from as short as three months to as long as five years. Your money is accrued on a set interest rate and at the end of the term, you have more money than you had before with which you can either renew the CD or move your money however you see fit. The interest rate may not be huge, in fact it won’t be. But it will be more money than if you had let it sit in the bank for that given period.
For those who like to focus more on their finances there are also other ways to invest such as gold, silver, copper, and bonds just to name a few. Having a savings account is a good thing and I believe they are necessary. But that doesn’t have to be the big box where all your money sits when you aren’t paying bills or making purchases. Take that money and spread it around. Have a hand in the stock market, buy a CD, add to your money market funds, AND maintain that savings account. Diversification is the name of the game.
A gold investment is seriously one of the best investments one can find thanks to the reckless monetary expansion by the Federal Reserve. The more the Federal reserve prints money, the more they deflate the US dollar and the more alternative commodities such as gold increase in value.
If you are a working professional with a 401(k) or an IRA, you can still invest outside of your retirement fund. If you are a college student or younger with no retirement plan these are valid opportunities to have a leg up once we get into the workplace, whether it be as entrepreneurs or members of larger companies.
Not investing would not be the end of the world, but why shouldn’t we? We are young, full of life, and probably more tolerant to risk than the average person. We are the perfect candidates to take a chance. Besides, none of us like to kick ourselves after the fact for not getting in on a great idea sooner. Don’t be a self-kicker.