If possible, most experts recommend that you save about 10 percent of your paycheck each and every month. This can include saving up for a big expense such as a house, car or college fund or perhaps a long-term goal such as retirement. Knowing a bit about various types of investments can help you make the best money saving decisions for you and your family situation.
There are several types of retirement or pension plans to consider. Many employers offer a 401(k) plan, which is a pension plan account where a portion of your salary is deducted and placed into a special account where it earns interest. The money is taken out before taxes are levied on the paycheck, and you pay the taxes years later when you withdraw money. Often your employer will match a portion of this money, which further helps you plan for retirement.
If your employer does not offer a 401 (k), another popular retirement plan option is an Individual Retirement Account or IRA. There are several different kinds, including SEP IRAs and Roth IRAs. Roth IRAs are interesting because the withdrawals typically are tax free because the money is deducted from your after-tax assets. Another positive aspect about IRAs is that if you have to declare bankruptcy, a portion of the IRA might be exempt from bankruptcy.
In addition to saving for retirement with the aforementioned plans, there are many other options for long-term investment strategies. A mutual fund is an investment that can be either long-term or short-term but offers investors a lower risk option than buying and selling individual stocks and bonds, which requires quite a bit of research and maintenance.
These mutual funds are professionally managed, and a variety of investors are included. The actual investments are many and varied; this diversity helps to minimize the overall risk. Open-ended mutual funds are one type of mutual fund, and they are by far the most common, with more than 7,000 in the United States alone. Unlike a few other types of mutual funds, your fund manager is required to buy back your portion of the fund at the end of any trading day if that is what you want. So basically, you can sell at any time.
There are literally hundreds of different mutual funds, and generally they target a specific industry or perhaps a region. For example, you might opt for a China fund or an Asia fund that invests all of the money in various businesses in China, Hong Kong and other Asian nations. These investments will be in many different industries and in many different companies, including banking and real estate holdings, technology, energy and other sectors. Another option is to invest in a type of energy fund, which might include companies that drill for oil, natural gas companies, gas companies and other similar businesses. A green energy fund is a fairly new addition to the market, and there are several to be found. These invest in energy that comes from wind, water and solar power.
There are several types of retirement or pension plans to consider. Many employers offer a 401(k) plan, which is a pension plan account where a portion of your salary is deducted and placed into a special account where it earns interest. The money is taken out before taxes are levied on the paycheck, and you pay the taxes years later when you withdraw money. Often your employer will match a portion of this money, which further helps you plan for retirement.
If your employer does not offer a 401 (k), another popular retirement plan option is an Individual Retirement Account or IRA. There are several different kinds, including SEP IRAs and Roth IRAs. Roth IRAs are interesting because the withdrawals typically are tax free because the money is deducted from your after-tax assets. Another positive aspect about IRAs is that if you have to declare bankruptcy, a portion of the IRA might be exempt from bankruptcy.
In addition to saving for retirement with the aforementioned plans, there are many other options for long-term investment strategies. A mutual fund is an investment that can be either long-term or short-term but offers investors a lower risk option than buying and selling individual stocks and bonds, which requires quite a bit of research and maintenance.
These mutual funds are professionally managed, and a variety of investors are included. The actual investments are many and varied; this diversity helps to minimize the overall risk. Open-ended mutual funds are one type of mutual fund, and they are by far the most common, with more than 7,000 in the United States alone. Unlike a few other types of mutual funds, your fund manager is required to buy back your portion of the fund at the end of any trading day if that is what you want. So basically, you can sell at any time.
There are literally hundreds of different mutual funds, and generally they target a specific industry or perhaps a region. For example, you might opt for a China fund or an Asia fund that invests all of the money in various businesses in China, Hong Kong and other Asian nations. These investments will be in many different industries and in many different companies, including banking and real estate holdings, technology, energy and other sectors. Another option is to invest in a type of energy fund, which might include companies that drill for oil, natural gas companies, gas companies and other similar businesses. A green energy fund is a fairly new addition to the market, and there are several to be found. These invest in energy that comes from wind, water and solar power.
About the Author:
Cleveland Jernigan enjoys blogging about investments. For further information about Asian investments, or to discover more about Asia Pacific bond funds, check out these fund sites today.
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