4 low-risk ways to invest
In my previous article, I wrote on the four major ways that bring about financial stability I gave step by step principles that brought about to wealth, investment was one of my main focus, today I will outline 4 safe low-risk ways to invest.
Investment is a very important commodity but, if not done wisely it can lead to financial ruin. When starting investment don't try to get rich overnight but, try to build a solid foundation to wealth although it takes time. You must be smart, it's safer to get a small profit that increases over time than big profit with high risk. Don't gamble with the money that you work so hard for, stay discipline while investing until all your goals are achieved.
When building your financial status, the first thing that needs to be done is to understand how money works. If an individual can start to save from a young age it would a big differents, most people when young thought they didn't have to invest because it was still early days in their life. But, after having kids, getting a mortgage to purchase their new house, and sending their kids to college suddenly, they are in their midlife having lots of bills and no saving.
If an individual saves $10 per day that's $300 per month and continues this for 30 years at 8% interest rate that works out to $447,107 which is awesome than not to save at all. People who are wealthy always seek to find different areas where they can invest best but, the poor man doesn't understand this concept and doesn't even care to understand.
One of the best vehicle to invest money is a place that compounds interest over time and has little tax or no tax at all. Benjamin Franklin said that nothing is certain in this world except for death and taxes.
If you make money- they tax you, If you spend money- they tax it, If you save money-They tax it, If you die- they tax you.
Here are Four of the best low-risk avenue in which you can invest your money for the future
1. Cash value life insurance- This insurance policy has both death benefit coverage and also cash value that can be drawn if an emergency pops up and the best thing about this policy is that it's tax-free. Only whole and Universal carry this type of cash value attached and this is one of the best vehicles that can build wealth over time.
2. The second is Tax-Free Saving Account (TFSA)- This is a tax- advantaged account that helps with both long and short term saving to reach your financial goal. It is without a doubt that TFSA is the best tax-advantage vehicle available to Canadian. It is similar to Roth IRA in the USA, the amount that can be contributed to this account is $5500 annually. Even when you withdraw from this account its not taxable.
3. The third is Register Retirement Saving Plan (RRSP)- This is a Canadian account for holding saving and investment assets, no income earned in this account is taxed but most withdrawal is taxed as income when they are withdrawn. This is the same principle that is applied to register pension plan.
4. The fourth is Guaranteed Investment Certificate (GIC)- This Canadian investment account offers a guaranteed rate of return over a fixed period. Because of its low-risk profile, the return is not so great. It is similar to time or term deposit in any other country. GICs is a safe vehicle to invest money because your initial investment is protected.
Some other alternatives in which you can invest your money are:
* If you going to need your money within 1 year you can put it in a saving or money market account.
* If you going to need it between 1-5 year you can put it in a safe area such as Treasury bills, or conservative bonds, and CDs account.
* If you won't need it for 5 years or more you can invest in stocks and bonds but they are little risky.
ConclusionWhether you put your money in an insurance or investment account make sure it's at a place that can build up cash over time.
If you Know your goal and objective it will help you to select the best choice or tools to invest. Where you put your money is very important, it's up to you to consider and make the proper decision so that you can apply it to your financial future.
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