Saving Your Money As Opposed To Starting a Business
Thanks to the economic recession that reared its ugly head during the first quarter of 2008, countless people have lost their job. Those who have managed to retain their job have found, to their dismay, that their pay scale has been decreased. However, many persons, especially those who had amassed a fortune, were unaffected by this financial disaster. These people have enough money to last them for the rest of their life. Despite this, they should take certain considerations, so that their accumulated wealth increases. After all, prices of essential commodities are rising every month. Apart from this, a major illness can dent their bank balance, especially if they have not got a suitable health insurance.
Saving Your Money:
There are several options available for you, especially if you own a huge amount of money. You can save the same using several available options. If your money is deposited in a simple saving or checking account, then it earns you interest a certain percentage of interest per year. However, this percentage is quite low. You can increase this percentage by opting for term deposits. This is also known as certificates of deposits. They provide you with a higher rate of interest on the money invested by you in them. It is a wise idea to search the interest rates offered by different banks before investing your money with them, since their rates vary.
The Balancing Act:
While certain banks offer interest as low as 0.25%, others offer up to 2.25%. The advantage of these deposits is that they are risk-free, as opposed to bonds and stocks that offer a higher rate of interest, but come with a risk factor. You should also check the lock-in period of the deposit. If you withdraw your money before that period, then you will have to pay a penalty. A good idea is to keep a reasonable sum of money in your checking account and invest the same in term deposits. This way, you can withdraw money from your checking account, as and when required, without disturbing your fixed deposit.
The Stock Exchange:
You can also invest a part of your money in stocks and bonds. They provide you with far better returns compared to term deposits. Be sure that you only invest in blue-chip stocks that have proved their worth over a long period. However, this does not take away their risk factor as the 2008 economic recession proved when the value of all stocks crashed. It is best to seek the advice of an expert when opting for this saving method.
Starting a Business:
The best way to increase your money, in a risk-free way is by starting your own business. Thanks to the internet, it is now possible for you to sell your goods all over the world. You can purchase goods, directly from the manufacturer at wholesale rates, sell them at retail prices, and earn a healthy sum in the process. If you do not want to invest money to purchase and stock goods, then you can opt for the drop shipping process. In such a scenario, the distributor or manufacturer will ship the product to your client on your behalf.