Monday, July 30, 2012
Diversifying is Critical
Even when saving your money, diversification can be crucial. Diversifying can help get the most out of low-risk savings opportunities. Doing things like laddering certificates of deposit can help to spread money over a variety of return levels over time. And just because a savings option is low-risk, still doesn’t mean there isn’t some risk involved. Putting all your eggs in one basket -- even a steel reinforced basket -- can still burn you if that basket is somehow stolen or destroyed.
Be Happy with Lower Returns
It’s not always the higher-risk investment that burns an investor but the greed and short-sited view of the future that pushes him or her to make that investment in the first place. Personally, I’m fine with low returns. Over time, the steady low return on savings can be just as valuable -- if not more so -- than the fluctuating higher risk returns. I find that my ability to remain greed-free and satisfy myself with lower, albeit less exciting savings returns, tends to make my saving style safer and makes me feel more at ease.
Look for Control, Rather than High Returns
Low risk saving options typically offer more control. I like to have control over my money since no one is going to care about that money more than the one who actually earned it…me.