Maybe investing in a food truck or a startup business is not for you. If you’re not comfortable with an investment type or opportunity, by all means, don’t take the risk. Life is too short to have high blood pressure because you unwillingly put your hard earned money on the line. Someone very wise once said, “Ain’t nobody got time for that!” But, given that life is short, the time to save for your future is today! All investments are not as risky as starting a business or playing the stock market. There are just as many sound investment opportunities that have little to no risk. You can set yourself up for retirement, and save money on all of those prescriptions for blood pressure medication.
Investing can be passive or active. Passive investing is an investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long-term appreciation and limited maintenance. A popular and smart passive investment is a 401K.
401K. A 401K is sometimes called a “do-nothing” investment (i.e., passive). While the funds you allocate to your 401K can be actively managed, most investors that choose a 401K as an investment strategy, choose it for its passive maintenance ability. Many companies offer 401K and matching as an employee benefit. If your company offers this, TAKE ADVANTAGE of it. It’s free money, and a reliable retirement investment. If your company does not offer 401K, consider investing in a Roth IRA (…funds are after tax dollars but the interest and other earnings are not taxed). It’s basically a private 401K. Either is a means of investing that is no risk, and only reward.
Conversely, active investing involves ongoing buying and selling actions by the investor. Active investing, while it involves more risk, can be pursued in a way to minimize the risk. Usually, the investment goal is set and then buying and selling of investments happen to make the goal come to fruition.
Organized Investment Groups. Forming or joining an investment group is a way to participate in active investing but minimizing your risk. By being a part of a group or team, you have the knowledge that each individual brings to the table. All of their previous investing experience, education, knowledge and most importantly, their money are able to be added to the success of the group. If forming one, rather than joining, you can decide on the number of investors, the amount required to join, and how vast your group’s portfolio will be. Once the group is formed, risk is minimalized by giving you the ability to get your feet wet, without having to jump in the deep end as the group decides to: purchase a business, invest in a business/stock, build or purchase real-estate, etc.
Whatever investment strategy you choose, choose something. Investing can be used to gain wealth, secure your retirement, or just to an immediate financial end. It doesn’t have to be your life savings, but if you have the opportunity, attain the knowledge, and properly evaluate the risk then you can reap some pretty great rewards from whatever amount you safely invest and get your piece of the American dream!
