Saving versus Investing your Money

Saving and Investing money may seem like they are the same thing, but there are some differences between the two terms when it comes to money. Both involve the preserving and building up of money, but investing your money instead of putting it in a savings account will hopefully earn higher returns. Along with higher yields, though, could be some risk and reduced liquidity.

When people put money into their savings accounts at the bank, these funds are insured up to $250,000 by the FDIC (this applies to each depositor, per insured bank for each account ownership category). The FDIC does not insure U.S. Treasury bills, bonds or notes, but these instead are backed by the full faith and credit of the United States government. With that being said, saving money in this manner is probably one of the safest ways to keep your money, but unfortunately savings accounts are not paying much in interest these days.

If you instead want better results and a way to make your money grow faster, there are some investment opportunities out there that pay investors higher returns. Whether these investments are offered by banks, private money lenders or stock/mutual fund managers, the risk and liquidity, though, will differ from that of a savings account. One important factor when evaluating these other options, is to really educate yourself about the entire process and keep up with the changes in the markets. It's better for investors when they know how the cycles work and understand -and even expect- the ups and downs in markets. The cycles and the factors that can influence them also vary depending on whether it's stocks, real estate, futures, etc.

Personal financial plans and timelines can have a big affect on the way people choose to invest. Some investors are seeking to retire and live off their investments in the next few years and others have another 20 plus years of investing before retirement. One investor may feel they can "afford" higher risk investments because they have more discretionary income versus another investor who has spent many years saving up to start investing, but the possibility of suffering a financial loss of that money could have more of an impact on them than say the first investor. They key is to find what works for your own personal situation and a balance between risk, liquidity and returns.

Right now could be a good time for you to consider note and trust deed investing. With the banks setting stricter guidelines, there has been an increase in demand for an alternative loans that don't necessarily fit into conventional loan parameters. These are often borrowers with good credit and good collateral. Some of which are loan inquiries from businesses, people who are self-employed or those who want financing on a rehab or construction project. Most of our note and trust deed investments are set up for 2 years, in 1st position on the properties and pay 12-15% in yields and interest-only monthly payments with a balloon due at the end of the term. Loans can be as little as $20,000 and then go up to several hundred thousand. For more information on these types of investments, visit our website www.GreysonFinancial.com.

There are an incredible amount of resources online to help you determine the types of investing that might work the best for you. See links below for recommendations.