Investing When Financial Times are Difficult
When times are tough and money’s tight, one of the first things you may neglect is investing. That’s also true when there’s volatility in the stock market or when real estate prices seem to be dropping. People get frightened, and they don’t want to take the risk. You don’t have to stop investing, though. You just have to be more cautious.
Investing is a great way to build up a nest egg for the future. If you take the time to put money into investments that are safe, you won’t have to be as concerned about losing your cash.
When the economic climate improves, the stock market and real estate market can help you make money very quickly, but that’s not the case when there are very few hot stocks and no one’s buying houses!
Banks Can Help You in a Down Market
You may not think of savings accounts as much of an investment because of their low interest rates. When you want to protect your money, though, it’s better to put it into something that offers a lower return and virtually no risk, as opposed to something that’s high risk. A savings account won’t make you rich, but you’ll earn a steady return and won’t need to worry.
While you’re at the bank, ask about CDs and IRAs. These are both ways to save for retirement and get a modest return while keeping your money protected. A CD, or Certificate of Deposit, typically pays a higher interest rate than a savings account. You have to leave the money alone for a while, but many CDs are short-term investments.
Other Ways to Invest
Some people also make private loans to others. These can be risky, but if you know and trust the person you’re loaning money to, you can make a loan with the cash you have and get payments with interest. It’s not quite the same as investing in stocks or real estate, but you’re investing in the future of someone who needs your help – and making money in the process.
Others invest their money by playing games of chance. However, it’s never safe to gamble more than you can afford to lose. In a down economy, the amount you can afford to lose will likely be at or near zero. Only when you have money to play with should you consider trying to make money by gambling, instead of saving.
Giving Up is Not the Answer
The most important thing to remember is that the economy will improve. While you might not be making the return on your investment that you had hoped for, that can (and most likely will) change in the future.
Keep thinking positive and looking into new investment options. Talk to your banker or financial adviser about saving money and earning a good return on it.
Listen to the suggestions you’re given, and choose the best ones for you. Remember, investing isn’t just about making a quick buck. It’s about a long-term strategy. You may need it one day. If not, you can use it to travel, help family members who need it, or make a donation to a charity that matters to you.
As long as you invest carefully and don’t lock yourself into something long-term that might not be right for you, you’ll come out ahead in the end. Be prepared to lose a bit from time to time. That happens to even the best investors. By proceeding with caution and cutting losses when necessary, you should be able to continue to invest even in hard financial times.