Saving money is the cornerstone of personal finance. I’ve always said that as long as you spend less money than you make then you will never go broke. However, there is a lot more to financial security than that. Most people don’t realize that simply saving money isn’t enough anymore, it’s more about how and where you save those funds. I know most of the world prefers to be risk adverse, but inflation is the silent killer of money. It’s important to stash your extra funds in an investment or growth vehicle that is more aggressive then a low interest earning savings account. I’m not saying that you should throw all of your money into risky real estate investment trusts, but a good portion of the money should be put into an investment that will allow you to outpace inflation.
The world of investing is tricky, and you may find yourself asking “what are binary options” or “what are exchange traded funds”, but with a little research and consulting with investment advisor you will find that investing isn’t nearly as daunting a task as it seems. The process of investing is quite easy to do on your own should you choose to. Opening an online brokerage account is relatively inexpensive and easy. Just search out one online that meets your investment needs and is accompanied by low fees and trading costs. From there it’s simple to invest in blue chip stocks, mutual funds, exchange traded funds, and numerous other investments. If you want to know how to invest with binary options it may be best to consult with your advisor as they can be slightly more complicated.
Outside of the stock market there are several other areas to place your money that can handsomely outpace inflation. Consider certificates of deposit, or even a money market account. Money market accounts are quite similar to the typical savings account with the exception of stronger interest rates coupled with stricter account guidelines. In exchange for higher rates they require that you keep these accounts more adequately funded with higher minimum balances. Other than that, you can usually draw on the accounts as necessary.
Peer-to-peer lending sites are another source of investing. If you live in an area that allows you to legally invest in peer lending, and you have the time to research it, then this is a great way to beat inflation. It has been shown that peers are often a lot less likely to default on loans when borrowing via P2P. A quick search online will show you that major sites like Lending Club boast double digit return rates, and low default rates, you can’t beat that combo!