Investment is something that is on the mind of everyone. At least once we enter the stage of our life where we begin to work and support a family.
Investing can be quite different depending on your goals, whether they be short term or long term.
The most popular form of investing is investing for your retirement. An IRA is one form of investment. Monies you put in an IRA are tax deferred; in other words, you do not pay taxes on this money at the time you invest.You are limited to the amount you can use for tax deferment, up to $ 5000 beginning this year (2008). You pay no taxes on this money until you retire.
That is popular because you immediately earn on your monies. For instance, if you earned $ 30,000 in 2007 and invested $ 4000, you would only be paying tax on $ 26,000, so you have an immediate increase on your savings.
In addition there is 401 (k), Roth IRA, Keough plans and more. You owe it to yourself to talk to an investment professional and discuss which plan might suit you best.
One piece of advice for everyone, If your company offers a 401 (k) and they match a portion of your investment, take advantage of that! It's like getting an automatic raise.
For instance, if they match up to 3% of the amount you have taken out of your check, you are basically getting a 3% raise. Having this money come out of your check before you see it is a big plus as you do not miss what you do not have.
Investing for your retirement is quite different than investing for the short term. When you invest for retirement, you are attempting to earn a good return on your money over a long period of time. If you can get 8% or more, you are going to multiply your money considerably, particularly if you begin this savings when you are young.
However, if you are investing for quick short term gains, chances are you will be looking into stocks or real estate or options; something that might carry a higher risk but turn you a quicker profit.
Obviously an investment in real estate has almost always proved to be a solid investment if you choose the real estate property correctly. Short term gains in real estate can be a little trickier. Many people may opt to buy and sell real estate notes. This can be very risky but can also earn you quick profits.
I do not advise you to enter this without full knowledge of this field.
Stocks can be purchased for long term or short term investing. Stock options is an area where you can make a lot of money quickly. Of course, you can lose a lot of money quickly as well. There are courses on buying and selling options and you should read as much as you can before starting.
In addition, there are many websites online where you can open a dummy option account and practice trading options without any real money being involved. Do this! Do not begin buying and selling options for real until you are consistently showing a profit here.
Investing is an exciting thing and this is one area where the more you know the better you will profit. The internet has made it a lot easier to gain the knowledge you need. It has also opened up the possibilities of scams and fraud, so be careful.
Social Security is seemingly in trouble so it is becoming more and more important you begin investing wisely when you are young. You want to kick back and enjoy life when you do finally retire.