Investing Your Money Wisely

If you are involved in business then chances are you are so caught up with your day to day operations that you sometimes forget that there are ways for your money to make even more money for you. In many instances, you will actually earn more from your investments than from your actual business. This is because you have to deal with overhead expenses, salary, and other operations with your business. On the other hand, all these factors are not present with your investments. In other words, you are making your money work for you when you invest rather than the other way around.

So how exactly can you go about this endeavor? The fact is, investments require exposure to the financial markets, so you would need to determine where to invest your money. There are many investment options from which to choose. 401k Plans, IRA's, Simplified Employee Pensions and the SIMPLE Plan are a few ways you can funnel cash from your business into an investment account. Asset Management Accounts, Annuities and Life Insurance are other methods you can use to gain some tax advantages while putting your money to work.

While investing in the market can yield a higher rate of return for your money, there are also risks, so you should have a long term investment horizon. Some ways to invest include investing in the stock market, bonds, mutual funds, ETF's and money market funds. Diversification is one key to success while investing. This means having your money spread over many asset classes so your risks are balanced in different industries and sectors of the economy. Using diversification/asset allocation as part of your investment strategy neither assures nor guarantees better performance and cannot protect against losses in a declining market.  Another key to investing wisely is to dollar cost average into your investments, so you don't drop a large amount of money into a particular asset all at once. Dollar cost averaging is simply investing smaller amounts of money on a monthly or quarterly basis into your selected funds, in order to make purchases at various prices, instead of one large purchase.  Dollar cost averaging/systematic investment does not ensure a profit or guarantee against a loss.  Investors should consider their financial ability to continue their purchases through periods of low price levels.

Investing is a good way to earn while enjoying the convenience of being in control of your time and your money. Investments also can provide you with a sense of security if you know that your money is managed by a competent financial advisor. Choosing an investment advisor is a highly personal endeavor, but with all of the options and choices available, having someone with which to discuss your investments and provide advice is extremely important. Advisors can work fee based or commission based and can even charge on an hourly basis, depending on the needs of the client. No matter whether you choose to go it alone or work with an advisor, investments certainly give you plenty of flexibility because you are free to choose the investment medium that best suits your needs.

John Kaighn

Jersey Benefits Advisors