Monday, June 17, 2013

Investing Your Money - Understanding Your Options in the Current Economic Climate

If you have a nest egg that you'd like to keep safe and see grow then you might be forgiven for thinking that your only option is to put that money in a savings account and let the bank grow it for you. While this is fine for smaller amounts of money though, for real investing it is one of the worst and least profitable options available to you. When you invest money with a bank, they will invest the money for you in stocks, shares and properties but they will only give you a tiny fraction of the interest they make meaning that your money could be growing much faster if you had made those same investments yourself. In the current economic climate too, with the banks struggling more and more, those interest rates go down considerably meaning you can end up tying your cash up for years on end and getting less than 1% APR for your troubles.

The benefit of savings accounts for most of us is the simplicity they offer and the security. In theory you should just have to put away your money and then forget about it while it grows and there should be no chance of a bad investment causing you to lose that cash. Unfortunately though with the current climate that's no longer even true and there's no guarantee that a bank isn't going to go bankrupt losing you some or all of that investment. If you are going to stick to savings accounts then - even for smaller amounts of cash - you should divide your money across several banks to protect it.

Better yet though you should look into some of the other options you have for protecting your money. Here we will look at what the best options are for really growing and protecting your money

The Best Protection

If you really want to keep your money safe then an overseas account can be preferable in a number of ways. One of the best forms of overseas account for keeping your money safe is a Swiss Annuity which you pay into in a large lump sum up-front in order to get subsequent smaller payments over the years. This works well to save your money as it will be with a Swiss bank (meaning the economic crisis isn't so much of a factor) and because there won't be a pot of your money sitting somewhere. This is also a form of 'asset protection' meaning that even if you were to go absolutely bankrupt your money would be safe.

Investing Yourself

Another option is to invest your money directly yourself and there are a number of different ways you can do this. For security and peace of mind for instance you can invest in gold, precious materials, wine or paintings which will be generally impervious to fluctuations in the market and the economy. Investing in property is also relatively safe, though it requires a big upfront expense and can be a hassle if you plan to rent it out or just maintain it.

Alternatively you can invest in stocks and shares yourself or with a self-managed super fund (which basically sees you teaming up with other investors). This can yield high rewards but is very high risk - so if you're going to go that route it's wise to use a financial advisor who can talk you through the best decisions.

Author Byline:

John Lowrie resorts to blogging to share his thoughts and opinions with his readers. He works for Payday Angels and likes to keep himself updated with the latest developments in the field of personal finance management. His Twitter ID is j_lowrie.

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