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2012年8月29日 星期三

Money Markets Vs Certificates of Deposit - Which to Choose?


Deciding between money market accounts and certificates of deposit is a matter of determining the length of time and level of security you desire when investing. Both forms of investing can be very beneficial to your assets, but they satisfy different goals. Therefore, to decide between them, it is important to determine your goals.

Let's look briefly at some goals you may have in mind:

Long-Term Savings - If you're looking for a way to invest that can guarantee the amount of funds at maturity then certificates of deposit are probably the best way to go. They are debt instruments that are issued by banks or other financial institutions in exchange for money paid by an investor. The CD is given for a predetermined amount of time with a fixed interest rate until maturity. The trade-off in this is that you may not have access to your money for a while, anywhere from weeks to years. However, if you're not interested in having access to your money (and like investment growth) the CD is a good option.

Easy Access to Funds - If you are looking for an investment tool that allows you access to your funds whenever you want them then money markets would be a better choice. You can open your account at most any financial institution, from which you should receive a checkbook that will give you the ability to regularly invest in the form of purchasing stocks, bonds or mutual funds. Also, you can deposit cash easily in these accounts.

If you're still not sure of which route to take, here are some other ideas to keep in mind:

• Certificates of deposit are FDIC insured up to $100,000, much like money in a savings account; however, if you decide to opt for a longer maturity period (and higher interest rate), you may have to wait a very long time to access your funds.

• Money markets tend to keep their share price right at $1 per share, which works out nicely for some; however, if you want to take advantage of interest rate maturation you will have to deposit more money instead of waiting over a period of time like with CDs.

Making the decision of what you should do with your cash can be a tough one. But with certificates of deposit and money markets both clearly offering unique perks, your biggest job will be to decide which goals are most important to your investment future.




http://www.gobankingrates.com/





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張貼者： 於 晚上9:29 0 意見
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2012年5月14日 星期一

Money Markets Vs Certificates of Deposit - Which to Choose?


Deciding between money market accounts and certificates of deposit is a matter of determining the length of time and level of security you desire when investing. Both forms of investing can be very beneficial to your assets, but they satisfy different goals. Therefore, to decide between them, it is important to determine your goals.

Let's look briefly at some goals you may have in mind:

Long-Term Savings - If you're looking for a way to invest that can guarantee the amount of funds at maturity then certificates of deposit are probably the best way to go. They are debt instruments that are issued by banks or other financial institutions in exchange for money paid by an investor. The CD is given for a predetermined amount of time with a fixed interest rate until maturity. The trade-off in this is that you may not have access to your money for a while, anywhere from weeks to years. However, if you're not interested in having access to your money (and like investment growth) the CD is a good option.

Easy Access to Funds - If you are looking for an investment tool that allows you access to your funds whenever you want them then money markets would be a better choice. You can open your account at most any financial institution, from which you should receive a checkbook that will give you the ability to regularly invest in the form of purchasing stocks, bonds or mutual funds. Also, you can deposit cash easily in these accounts.

If you're still not sure of which route to take, here are some other ideas to keep in mind:

• Certificates of deposit are FDIC insured up to $100,000, much like money in a savings account; however, if you decide to opt for a longer maturity period (and higher interest rate), you may have to wait a very long time to access your funds.

• Money markets tend to keep their share price right at $1 per share, which works out nicely for some; however, if you want to take advantage of interest rate maturation you will have to deposit more money instead of waiting over a period of time like with CDs.

Making the decision of what you should do with your cash can be a tough one. But with certificates of deposit and money markets both clearly offering unique perks, your biggest job will be to decide which goals are most important to your investment future.




http://www.gobankingrates.com/





This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

張貼者： 於 上午9:34 0 意見
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2012年3月1日 星期四

Be an Owner, Not a Loaner (To Make Money, Which is Better?)


The difference between financial independence and financial servitude is this simple principle; Be an owner, not a loaner. The average American's failure to understand this principle, (and live it), has sown the seeds of a stark financial future for ourselves and our families.

In my earlier article, "The True cost of a Guarantee", (see link below), I discuss the effect that inflation has on the value of our money. In this article, I discuss the difference between investing, and putting money in a bank's 5 year Certificate of Deposit product that had an advertised an interest rate of 2.5%, (two & one half percent).

Loaning your Money vs Investing

In our current day and age, we have the opportunity to participate in the ownership of businesses and national economies around the world: either through "self-directed" investing, (web-based stock/bond purchases for example), or through brokers/agents.

Here I would like to illustrate the difference between letting the bank use your money, (loaning it to them), and putting money directly into the U.S. or world markets, (be an owner).

What happens to the money?

When you put money into an account at the bank, it doesn't just sit around. The bank takes that money and invests it so they can get a return, (income). One of the most common ways Banks earn income is to lend money and charge a fee, (interest), to let the borrower use the money for a period of time.

To use a very simplistic example: If I borrow money from the bank to buy my car, the money they give me is the money depositors have put into their accounts.

Letting them use your money

Let's take that example and look at it a little closer. Today you go into the bank and put $1000 in their 5 year CD and they promise you their advertised rate of 2.5%. 10 minutes later I go into the bank and get a $1000 loan to buy my car. The money the bank lends to me is, in essence, the same money that you just deposited.

The loan terms state that I have to pay back the money within 5 years, and the interest rate they are charging me is probably about 7 - 10%. We already know that after the 5 years is up, your $1000 deposit will have earned about $131.41 in interest. (Interest is the fee the bank pays to you so they can use your money).

How much money the bank made, (using your money).

If the interest rate on my loan is 8%, by the time I make all the payments to pay back the loan, I will have given the bank $1202.40. That is the $1000 I borrowed, (the money they are letting me use), plus $202.40 in interest, (fee to use the money). If the bank gave you $131.41, on the $1000 in your CD, that means they put $70.99 in their pockets. Remember, they made that profit using your money, not their own. By letting the bank act as the "middleman" you give up some of the earning potential of your investment.

Be an Owner

When you put your money into the world's market system you would be, in essence, a part owner of the world economy. By owning a piece of the "pie", (instead of loaning money to the bank), you have the opportunity to have your money earn a higher return.

Even over these financially turbulent last five years, a conservatively mixed portfolio could have earned a return of about 4 to 6 %. (Two key words: "mixed" and "conservative"). That means your $1000 could have earned from $216.65 to $338.23. That is $85 - $207 more than you would get loaning your money to the bank.

But what about the guaranteed deposit? What about the guaranteed interest rate? I recommend reading my article "The True cost of a Guarantee" to answer those questions.

So what are the choices?

When it comes to investing in the global economy, no one can promise that you are going to get a certain rate or return, or even that you won't lose some of the original money you invested.

So here are the options: Choose to follow the "better safe than sorry" philosophy, and almost surely lose to inflation, OR, take a small chance in the world market place and enjoy an opportunity to earn a much better return. I think I'll place my bets with the world.

**(The above information, including the amounts and values stated, is for educational and illustrative purposes only, does not constitute any type of projection, warranty, or guaranty, and is neither a solicitation nor endorsement to buy, sell, or transact, any type of investment or financial instrument).




Why go it alone? A personal financial coach can provide you with valuable insights in your quest for financial security.

For a referral to a coach whose services are customized, confidential, and complimentary; send us an email at duane.ashby@usa.com, or visit our blog at http://www.duaneashbyonline.blogspot.com

(c) Copyright - Duane Ashby, all rights reserved





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張貼者： 於 中午12:01 0 意見
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2011年12月6日 星期二

Money Markets Vs Certificates of Deposit - Which to Choose?


Deciding between money market accounts and certificates of deposit is a matter of determining the length of time and level of security you desire when investing. Both forms of investing can be very beneficial to your assets, but they satisfy different goals. Therefore, to decide between them, it is important to determine your goals.

Let's look briefly at some goals you may have in mind:

Long-Term Savings - If you're looking for a way to invest that can guarantee the amount of funds at maturity then certificates of deposit are probably the best way to go. They are debt instruments that are issued by banks or other financial institutions in exchange for money paid by an investor. The CD is given for a predetermined amount of time with a fixed interest rate until maturity. The trade-off in this is that you may not have access to your money for a while, anywhere from weeks to years. However, if you're not interested in having access to your money (and like investment growth) the CD is a good option.

Easy Access to Funds - If you are looking for an investment tool that allows you access to your funds whenever you want them then money markets would be a better choice. You can open your account at most any financial institution, from which you should receive a checkbook that will give you the ability to regularly invest in the form of purchasing stocks, bonds or mutual funds. Also, you can deposit cash easily in these accounts.

If you're still not sure of which route to take, here are some other ideas to keep in mind:

• Certificates of deposit are FDIC insured up to $100,000, much like money in a savings account; however, if you decide to opt for a longer maturity period (and higher interest rate), you may have to wait a very long time to access your funds.

• Money markets tend to keep their share price right at $1 per share, which works out nicely for some; however, if you want to take advantage of interest rate maturation you will have to deposit more money instead of waiting over a period of time like with CDs.

Making the decision of what you should do with your cash can be a tough one. But with certificates of deposit and money markets both clearly offering unique perks, your biggest job will be to decide which goals are most important to your investment future.




http://www.gobankingrates.com/





This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

張貼者： 於 晚上8:37 0 意見
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