Many safe money guides are out there but don’t always tell you the whole story. Here we will give you a safe and sound guide to investing your hard-earned dollars. We’ll talk about the different types of investments available to you, how much time it takes for each type of investment to grow in value, and what some safe-money pros think about these options!
What is Safe Money?
Safe money is an investment option that focuses on the preservation of capital. This means that the goal of investing in safe money is not to lose any of the original investment but to make a profit. As a result, safe money investments are typically low-risk and have a relatively stable return. Examples of safe money investments include government bonds, GICs, fixed annuities, and high-quality corporate bonds.
How does safe money work?
Safe money investing is all about minimizing risk. Investors in safe money typically invest in a mix of asset classes with low volatility and are not prone to large fluctuations in value. This helps ensure that the original investment is preserved and that the investor does not experience significant losses.
What are the pros and cons of investing in safe money?
There are both pros and cons to investing in safe money. Some of the advantages include:
- The investment is low-risk, meaning there is a lower chance of losing money.
- The investment is relatively stable, so the value will not fluctuate dramatically.
- The investment is typically easy to understand and access.
Some of the disadvantages include:
- The investment may not provide high returns, limiting the growth potential.
- The investment may be less liquid, so it may be difficult to access the money promptly.
- The investment may be less exciting than other, more volatile options.
Safe Money Types
- US Treasuries: Short-term government securities guaranteed by the full faith and credit of the United States.
- Certificates of Deposit: The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) provide underlying guarantees for bank and credit union accounts. The United States government has provided a full faith and credit guarantee for these systems.
- Fixed Annuities: Guaranteed by the insurance company’s assets and the underlying guarantee of each state’s Guaranty Fund.
- Fixed Index Annuities: Guaranteed by the insurance company’s assets and the underlying guarantee of each state’s Guaranty Fund.
- Immediate Annuities: Guaranteed by the insurance company’s assets and the underlying guarantee of each state’s Guaranty Fund.
- Life Insurance: Guaranteed by the insurance company’s assets and the underlying guarantee of each state’s Guaranty Fund.
So, is safe money right for you? The answer to that question depends on your personal financial goals and risk tolerance. If you are looking for a low-risk, stable investment option with modest returns, then safe money may be the perfect choice for you. However, if you are seeking higher returns through investing, then there are other options available that may better suit your needs. Contact us today to discuss what type of account would be best for you and get started on the path to financial security. Thanks for reading!
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Frequently Asked Questions
What is the safest place to put your money?
The safest place to put your money is in a savings or a money market account. These accounts are FDIC insured, meaning your money is guaranteed up to $250,000. You can also invest in CDs, which are also FDIC-insured. However, the interest rates on these accounts are typically lower than those on savings and money market accounts. Fixed annuities are also protected from loss, but they typically have higher fees than other types of accounts.