Investments

There are two things for sure in this life "Death and Taxes" lets keep in mind both of these while viewing this page. The late Albert Einstein, said "compound interest is the most powerful tool man has created". This may be why banks are the most popular way of saving money for the long haul. So, let's explore the five ways of investing your money:

  1. bank deposits
  2. real estate
  3. insurance
  4. stocks and bonds
  5. resalable goods- like antiques, guns and gold

The people who survived the the stock market crash of 1929 and the great depression had substantial investments in real estate and antiques. Prudential Insurance co. and Fireman's fund Insurance co. of San Francisco both had substantial holdings of real estate to fall back on. Since Real estate is a long term investment the type of real estate you own becomes very important, more about this later.

Let's start with Bank Accounts. These are compound interest oriented and federally insured to $100,00 dollars. there are several ways to save with banks :

  1. standard savings.
  2. money market which may pay a little more but requires a higher deposit.
  3. certificate of deposit which pays more interest but has a time limit
  4. the new trustee account which allows a parent to give a child money towards a college education with a deferred tax status this allows the student to pay income tax at the student rate instead of the parent rate which may be more.

Insurance

Insurance comes in many forms some of these are

  1. Life--long term low interest paying but offers the hope of receiving the whole policy amount on early death. This might be used as a retirement account if it matures before age sixty-five. It might be possible to be over insured.
  2. accidental death --I don't know much about this
  3. estate--This can help offset inheritance taxes or pay mortgages and other debts at your death--plan this carefully.
  4. medical--This may help to prevent bankruptcy if you have a major medical problem. This is an expense not an investment
  5. auto- in an accident lets hope the other person has insurance too. this is an expense not an investment.

Real Estate

Real Estate is not a passive investment it demands work maintaining it. Here are a few ways to invest .

  1. residential-- long term the property value increase according to inflation and your mortgage interest. Don't purchase property built on an environmentally sensitive or destructive lot. Example: The love Canal Toxic Land fill or a watershed area Living in an area of high un-employment can present problems
  2. residential rental--everybody hates the personality conflicts with tenants but it is a great way to invest for the long haul. You will most likely recover your operating expenses, but your profit will be put off for several years.
  3. commercial space-- I don't know much about. It can be a good investment in a growing economy.