For the longest time, I have wanted a personal assistant.
My life is not necessarily busy or hectic, so my secretary would not have to work very hard. But I find it incredibly appealing to wake up in the morning and tell someone, “Hold my calls; I’ll be playing Madden for the next three hours.”
As time passes, I become more and more certain that this scenario will never play out anywhere other than my dreams, so I have started yearning for little tastes of the good life. I tell myself that Google Calendar is similar to having a robot work my social calendar. Pop-Tarts-to-go is like having a personal chef who really gets me. But my greatest personal relief would be someone to go to work for me everyday.
As it turns out, I shouldn’t have been searching all this time for someone so much as something.
Making Your Money Work
I’m not a wealthy individual by any means, but my money can go to work for me and actually bring back a steady income. Good for it! I was getting tired of responsibility and creditors.
There are several different ways to make a nice return on your investment, and the options provide a veritable job fair for your cash. With greater risk comes greater reward, which I believe was a line from Spiderman but also fits in nicely with investment strategy.
The following are several different career paths that your money can take:
• Low interest rate checking account
Barely providing a return on your money, low interest rate checking accounts are not the first choice for portfolio growth. In most cases, money placed in a checking account is money that will soon be spent and in many cases overdrafted. The low rate of interest might only give you a couple of bucks each year, which may be fine if you are saving up for a Dwyane Wade rookie card but not okay if you ever want to purchase a house.
• Savings/money market account
These accounts have as little risk as you could hope for, which is great for your $3,500 but not so much if you want your $3,500 to become $3,800. Interest rates on these types of accounts vary from miniscule to tiny, but there may be some minor growth potential over a period of several years. Money put into a savings account or money market account is available to withdraw at any time, such as when IKEA has its annual sale.
• Certificate of deposit
The highfalutin cousin of the savings account is the certificate of deposit. CDs tend to have a higher interest rate, but due to their extremely low risk, the rate is nothing to jump up and down about. Like a savings account, investing in a CD is virtually risk-free, but it sounds a lot cooler when you tell your parents what you are doing with your money. The reason for the slightly higher return is that money put into a CD is designed to stay there until the maturity of the CD. Terms can run from a few months to a few years, and the interest rate will reflect accordingly. There is typically a fee to withdraw money from a CD before its term is up.
The wading pool of big-time investing would be the bond market, thanks to its relatively safe return and higher interest rates. Like CDs, bonds are issued with a specific term at which point the issuer needs to pay back the bond holders. For sheer elitism, bonds are cool because it feels like you control someone else’s destiny. “Here’s some money for your government research project,” you might say to yourself. “Now make me live forever!”
Assuming you can wait years to have your money repaid, the return on bonds can be rather fulfilling. They are a safe, comfortable means of investing (provided you don’t invest in risky junk bonds), and you and your money should have lots of fun stories to tell when you are reunited. Unless the United States government goes down in a flaming ball of disaster, there is really nothing to worry about.
Weak-hearted investors need not apply. The stock market is a roller coaster ride of greed and corruption, and many people have lost it all in an effort to get ahead in the giant payroll of life. Fortunately, no one has lost anything since the Great Depression, so odds are pretty good you will come out ahead.
Provided the economy is doing well and you have someone smart to invest your money for you, the stock market can be a great investing tool. The return is generally much higher than anywhere else, and owning stock will give you something to talk about with your snooty East Coast relatives.
There are basically two different ways of investing in stock: long-term and short-term. Long-term investors do not panic when stock prices dip one day because they know they are in it for the long haul. These investors are patient and are rewarded with big paydays down the road.
Short-term investors are essentially gamblers in suits. They trade stocks multiple times a day in hopes of getting ahead a few dollars or getting a big break.
• Lottery tickets
For sheer ease and convenience, you can’t beat lottery tickets. Of course, if you are looking for a reputable means of investing, you could do a lot better. There is great risk afforded by those who place their money in the fickle hands of Seven Eleven Cheryl. Powerball, Deuces Wild, and Tic Tac Dough might seem attractive at 10:30pm on a Tuesday night, but you’ll wish you had that twenty bucks back five minutes later. At least you will be giving back to your local state government.
• Peer to Peer Lending @ Lending Club
New ways of putting your money to work arrive every day, so your cash has no excuse not finding a job. Lending Club offers attractive rates averaging over 12%. Plus, if you lend more than $5,000 before Feb 3rd, you’ll get a 5% bonus. Putting your money to work doesn’t get any easier than that! Plus, signing up as a lender only takes a few minutes.
For the time being, it is nice to know that while I may not have a personal secretary jotting down my personal thoughts for a future book, at least I have my money out there doing work I’d rather not do myself. Now if only it would stop and pick me up some Arby’s on the way home.