Although Forex can make you much more in a smaller amount of time ? but there is more risk attached.
Our American economy is a free economy, and it operates on the principle that if we leave the factors of production alone, without government interference (and by factors of production we mean land, labor and capital) so long as the game is played fairly and honestly, those factors will gravitate to their most economic and beneficial use. This they will do by being attracted to those places in which they are worth the most, this worth being reflected in rate of return. The places that need them the most pay the highest return.
For the American economy to operate, each investor must seek the highest return on his capital obtainable consistent with risk.
This is not only the justifying theory behind rate of return. It explains why certain industries need money and can pay a good return
The individual usually needs little urging to be converted to the doctrine that if he can get 10% on his money rather than 6% with the same degree of risk he should do that. This article attempts to show him the opportunities to place his money in higher yield investments. But first it might be well to explain just how significant the rate of return on your money is:
A short time ago our very close friends invested $1000 in a promissory note which yields 12% per year'1% per month payable monthly.
Both the husband and wife work, the husband in the government and the wife as a pharmacist. It is their desire that before too long the wife cease work and retire permanently. But they are used to getting along on two salaries, not just one, and the retirement of one of the couple will cut the family income materially. Since the children are grown and out on their own they feel that they can save, after taxes are paid, $200 per month.
This will come out of the wife's income. She has not saved this much to date, mainly because there did not seem to be any great motive for saving, and she seems to like to do a good deal of shopping in the department stores. So a forecast of her savings of $200 a month was drawn up in order that she might have the facts at hand on which she could base a decision as to whether she should attempt to save $200 every month or not. This is how the forecast works out:
On January 1, 1961 she invested her first money?$1,000?and at the end of the first month her interest check on this $1,000 was $10 (1% per month). She did not spend this income but let it stay in the account in order to become capital and thus increase the earnings base. But at the end of January she put in her first periodic monthly savings?$200, so that at the end of January her original capital in the account was $1,000, the interest was $10 and the monthly savings were $200?$1,210 in all. The interest on this total capital during February was.
At the end of the first year she has put in a total of $3,400, but the interest has made this total investment grow to $3,662.
In the normal course of her business career her income will go up slightly each year as she progresses in her job, but she probably will be able to save no more as these increases take place because she must pay taxes on her interest, whether she receives it and spends it or just lets it remain in her account to increase her capital.
By January 1, 1980, when she retires from business at age 63, her capital amounts to $108,476 on her total savings of $15,400. Her monthly interest check amounts to over $1,000, and this is in addition to her pension from her pharmacist's job and her husband's pension from the government
Is all this calculation fanciful? It may be, but I personally many people have had funds invested in this particular company for five years, and the only thing that hap pens is that the company grows, gets sounder and earns more money each year. Eventually they will not pay 12% per year in all probability. Then it will be necessary to find another similar investment.
We might further define the type investment we are talking about as high yield, fixed dollar obligations. The "obligation" part of the definition means that someone or some organization has an obligation to repay the money invested.
The "fixed dollar" part means that there is an obligation to repay a fixed number of dollars. While oil wells, tung groves and citrus groves may be excellent investments and return fine profits, there is no obligation on the part of anyone to repay any fixed number of dollars.
The Forex can make you even much more in just shorter time, but you could also lose a lot so it is a matter of making a choice.
If you have a large sum of money, the worst thing you can do is let it sit around. If you keep your money in a safe-deposit box, or in another equally stagnant place, it will just sit there. It is best to get it out and put it in a place where it can actually work for you, produce returns and therefore increase your total wealth. Pasco, Washington banks offer some of these options. So if you live in Pasco, WA and you have that sort of money available to you, why not investigate some of these options and find a way to start earning income just by investing your money in the right place.
You can always open a savings account, with a fairly low return (but which is better than no return at all) but which gives you complete access to your money whenever you might need it. Many of the larger banks can also help you invest in mutual funds.
Another popular option is a CD, or certificate of deposit. With a CD, you deposit a certain amount of money, which will be locked away and non-accessible for a pre-determined period of time. Your CD can have a 2-year term, 5-year term or even 10-year term. Usually, the longer the term, the higher the rate of interest you can earn. So you must consider whether you may need your money sooner than, say, 10 years. Sometimes people "ladder" their investments and break up the amount invested into smaller sums investing one amount in a 2 year CD, another for 5 years, and then when they mature rolling them over for another 2 or 5 years, if they don't need the money at that time. The interest will have accumulated, and you will have much more money than you started with. CD's are beneficial in several ways. Firstly, the interest rate is much higher than any other savings account. Secondly, you won't be tempted to withdraw it early to pay for some sort of personal treat.
Another option available to you is to place your money in savings bonds. These come in the form of small coupons that you can buy. They mature over time, and on the maturity date you are permitted to exchange them for the "face value" of the bond, which you bought originally at a discount. For example, say you can buy a 10-year $500 bond for $380 and when it matures you exchange your coupon for $500. (Of course, the discount you pay and amount you get back at date of maturity is determined by the interest rate set by the bank.) On the consumer side, they work about the same way that CDs do. However, with CDs you are able to withdraw early and be subject to a hefty fee. With bonds, you are stuck with the coupon no matter how much you need the money. This is another great way to increase your money over time with the help of a Pasco, WA bank. It is fairly risk-free, and has a larger gain than a savings account.
Everything mentioned so far is a fairly long-term investment with relatively low returns. What if you are ready to be risky, and make an investment that could possibly have great returns (or great losses)? If this is the case, you might consider investing your money in the stock market. You can find a local stockbroker, and start to discuss your situation with him or her. You will hire people who are supposed to be experts at dealing with the stock market, and know exactly what to invest in and what to avoid. The best way to find a stockbroker is to get a recommendation from someone you know who has used this person to good effect and can assure you they are reputable. And it's also a good idea to use a broker affiliated with some large brokerage firm that everyone has heard of - such as Fidelity, or Morgan Stanley, UBS, etc. By entrusting your money to a stockbroker, you have very good chances of being able to make a large return. (You also stand a very good chance of losing money, too, plus stockbrokers charge you a fee everytime they place an investment for you.) You don't have the security of a Pasco bank, but you have the possibility of bigger and quicker returns. But investing in the stock market is risky business. And if you want to preserve captial and have a sure return, you might prefer the much safer option of a bank instrument in which to invest.
Hopefully, one of these options will be useful to you. You will surely want to consider them, if you have a large sum of money sitting around not earning interest. CDs or bonds with a Pasco, Washington bank will earn you the money to ensure financial security for yourself in later years, or even for your children. It's one of the main principles of finance that you should always have your money work for you rather than the other way around. So consult a local Pasco, Washington bank and discuss your options today.
Both Gerald Mason & Andrew Stratton are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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