Certain individuals are fortunate enough, either through earnings or inheritance, to possess large sums of money. In many instances, these funds are not intended to be spent immediately but invested with designs on yielding the investor greater returns at a later time. Financial experts suggest that those possessing significant finances consider the following investment strategies:
Consider Long And Short-Term Financial Needs
Prior to committing to any particular investment strategies, financial professionals encourage prospective investors to consider their investment goals over the short and long-term. Certain investments are made for the purpose of burgeoning the invested funds over many years. Others can yield much quicker yet still profitable returns. The would-be investor needs to determine how much money they need from their investments. For example, if the individual in question earns a solid income, long-term investments might be better suited. However, if another prospective investor is retired or has major expenses, short-term goals are a more likely pursuit.
Once such goals are established, the investor can consider specific investment avenues. Such opportunities can include:
Financial experts opine that mutual funds are typically a safer investment method than stocks. Investing in such entities might not yield significant increases in principle but investors usually are not at risk of losing large sums of cash as they might when placing their money in more aggressive investments like stocks.
Establish An Emergency Fund
No one desires or necessarily expects bad times to befall them. However, unexpected and potentially harsh events can impact a person’s life. An individual could lose their job, become injured or be forced to defray the costs of a loved one’s major illness. Should these circumstances arise, an emergency fund could prove paramount to financial survival and recovery. In many cases, an emergency fund will include anywhere from six months to a full year of basic, current expenditures like rent, insurance, utilities and food money that is placed into a simple savings account.
Add To An Existing Work-Related Retirement Account
When in doubt, placing funds in one’s already existing company-sponsored retirement plan could prove beneficial. For example, placing additional funds into a 401(k) typically yields and quicker and more significant growth in an asset that will prove vital when the individual in question can no longer rely on a steady income.