Most Americans realize that they need to save and invest for their future but the line between how the two are different can sometimes be unclear.
Both saving and investing are an important part of your financial plan.
Savings maintains a rather consistent principal and accuses a small amount of interest contingent on where you keep the funds (e.g.; Certificate of Deposits, Savings Accounts, etc.) Savings should be designed for short term financial goals.
Investing on the other hand uses a long term horizon. It is riskier than savings because you’re investing in a variety of financial products that experience volatility with market and economic conditions.
However, historically a well designed financial plan incorporates a balanced blend of investments that generally out preforms the marginal interest one earns in savings accounts.
As an investor if is prudent to ask yourself, “Why should I invest?” and “How should I invest?”
Why should you invest?
You invest for your future. People live longer than ever but the cost of living and taxes continue to rise - meaning it is probably safe to say the future is a little more expensive than present.
The goal of our investment portfolios is to outpace inflation so that our clients retirement plans can maintain their targeted purchasing power.
Of course, all investments are subject to risk so as an investor you have to consider a few factors:
How much money do I need?
How long is my time horizon to grow my portfolio?
When will I start needing the money for retirement?
How long to I expect to live?
What level of risk am I comfortable with?
Everyone has a different portrait they paint of what retirement looks like.
Work with a financial professional that gets to know you as an individual and creates a financial plan around your goals.
As an Independent firm, our company works with a variety of companies to provide diversity in a competitive market place.
We look at long term potential instead of short term fluctuations.
Contact us today to learn more about our investment philosophy.