5 Places to Put Your Money Besides the Stock Market
By Tiffany Bass Bukow, Founder of MsMoney.com
You might be thinking these days that hiding your money under a mattress is a safer place than investing in the stock market. You wouldn't be alone if that were the case.
However, there are other places to put your money to work.
1. Real Estate
Investors who bought real estate funds at the peak of the stock market in 2000 have fared substantially better than those who purchased other types of investments, according to recent data by USA Today.
These investment vehicles are called REIT's. A REIT is a company dedicated
to owning and, in most cases, operating income-producing real
estate, such as apartments, shopping centers, offices and
warehouses. Some REITs also are engaged in financing real
estate. To learn more about them visit the national trade
association for real estate companies at http://www.nareit.com/
There's a place in every portfolio for bonds, because they operate differently from stocks. Bonds offer more stability to help preserve the amount of money that you initially invest.
A conservative and typically guaranteed investment, a bond is a debt instrument issued for a period of one year or more. Bonds raise capital for the issuer by borrowing money from investors. The federal government, states, cities, corporations and many other types of institutions sell bonds. With a bond note, the issuer is basically promising to repay the principal along with interest on a specified date, also known as the maturity date. Visit http://www.msmoney.com/mm/investing/portfolio_basics/bonds.htm for more information on bonds.
The government has used the Internet to make it easier to buy government bonds online. They also provide online calculators to make decisions, and software to track your bonds.
In TreasuryDirect, you buy Treasury bills, notes, and *bonds directly from the government -- without brokers, without hassles, and without a mountain of paperwork. http://www.publicdebt.treas.gov/sec/sectrdir.htm
The Savings Bond Wizard ® helps you manage your savings bond inventory on your PC. It's a downloadable program that allows you to maintain an inventory of your bonds and determine the current redemption value, earned interest, and other information. You can also print your bond inventory, providing you with an important record if you ever need to replace any of your savings bonds.
This calculator will help you find out what your bond is worth today. http://www.publicdebt.treas.gov/sav/savcalc.htm
A bank has typically been the place you put your money so that you can perform your everyday money transactions. Beyond your day-to-day needs, how much you decide to put in your bank should depend on the amount of interest your bank is willing to give you for those funds. Banks offer a wide variety of financial products that can be custom designed to your needs.
You hear about interest rates everywhere. They affect how much your bank will pay out on your CDs and money market accounts. They affect how much more you have to pay a credit card company above and beyond the amount you charged. Visit http://www.msmoney.com/mm/banking/bkbasics/int_rates.htm for more information on banks and interest rates.
If you haven't already put money in your IRA for the year, then you might consider a CD for your IRA account. You can use Bankrate.com to find out what the competitive rates are for these types of products at: http://www.bankrate.com/brm/rates_home.asp
Bankrate.com's surveys approximately 4,000 banks each week in 173 markets in 50 states and the District of Columbia.
Most collectors don't look to their collection as an investment they can retire comfortably on. Usually they just want to make a little extra money and have fun while doing it. As with other types of traditional investing, a successful collector needs to be well informed and in tune with their market. They face the same decision making process the stock investor has: when to buy and when to sell. Sometimes, as with stocks, there is the rare opportunity to make a lot of money in a short amount of time.
A good example of the collectible market that recently created a financial windfall for a few savvy collectors, was the Beanie Babies market. The financial upside was so great at one point that even the Wall Street Journal ran an article on it on the cover of their paper. If you were one of the rare individuals who timed the Beanie Babies market correctly, you could have turned a $10,000 collection into a $50,000 collection rather quickly. Of course, keep in mind, that you could have also lost a good portion of that $10,000 if the Beanie Babies fad died and been left with a whole bunch of kids play toys instead.
You take your chances. The more information you have about a particular market, the greater your chances of success. Information and a knack for this type of thing could help you predict some collectible trends and bring you some extra cash.
A great place to buy and sell your collectibles is eBay.
5. Pay Off Credit
The typical American Household carries 10 credit cards, an auto loan and a mortgage. Often the first place to look to improve your financial picture is with your existing situation. You might take some of your earmarked for investment and instead use it to pay off your debt. If you are paying a high rate for your credit cards, you could save yourself money in the long run.
A home mortgage is usually the largest investment a person has. The cost savings of paying off a mortgage early is often overlooked. Based on the Smart Money Mortgage Calculator at: http://www.smartmoney.com/home/buying/index.cfm?story=mortgage
A 30-year mortgage on a $200,000 home, at a 7% interest rate would make your monthly payments at $1,331. A 15-year mortgage on this same home, at a 7% rate, would make your payments $1,798. You can see what a big savings it would be to pay off the home in 15 years instead of 30. You can also use this calculator to determine how a one time pre-payment would affect your equity. A one time early payment of $10,000 can build your investment equity much quicker.
Visit http://www.bankrate.com to check up on home loans, your auto financing and your credit cards. Bankrate.com provides the tools and information that can help consumers make the best financial decisions.
As you can see, there are other attractive options to put your money besides sleeping on it.
Tiffany Bass Bukow