Safe Short Term Investments

For most people, earning – and of course, keeping – their money is a good thing. We work hard to generate our incomes, some of us through employment and long-term careers, and others through businesses, companies, and independent operations. There’s very little that’s more important to the world as a whole than generating an income large enough to take care of ourselves and others.

But there’s more to being safe and financially secure than simply generating that income. There’s a second part of being rich – or in fact, just being you – that many people tend to skip over. It’s what happens after you’ve earned that money, and how you can preserve it, enhance it, and build on the capital that you’ve earned over the short-term, the medium-term, and the long-term ahead.

This, not surprisingly, is where most would-be investors and entrepreneurs fail. The idea of earning money and holding it in the short term is one that many of us can relate to, an in fact many of us do this through hard work and business savvy. However, for every once-off millionaire there’s a sea of those who failed to invest their money properly, losing it due to unsafe or insensible investments.

In this guide, we’ll be looking at safe short-term investments – simple ways to invest your money for the short and medium-term ahead of you. From bank accounts and other foolproof ways to use your income, all the way to stock investments and other equity ideas, we’ll cover all of the ways to keep your money safe, secure, and earning a reasonable amount of short-term interest.

There’s rarely a combination of safety and value to be found in short-term investments. Those that are safe and secure rarely gain a large amount of interest in a short-term period, leaving those with their cash invested disappointed at the lack of growth. This is particularly true of lower or no-risk investments, such as bank certificates of deposit, or bank accounts backed by the FDIC.

On the other hand, there are a wide range of short-term investment opportunities that do have the potential to make you vastly wealthy. They’re typically somewhat risky, however, with equally as many people losing money as gaining anything. As such, it’s best to approach these investments – which include stock and bond investments – with an eye of caution and limited confidence.

At the top of the safety scale is a certificate of deposit – also known as a ‘CD’ – from a bank. This type of investment is about as safe as one can possibly get. The vast majority are backed up by an insurance provider, often the Federal government, and even more are supported by the bank itself, which guarantees a return on the account’s balance during the period for which it’s invested.

However, alongside their stability and safety is a weak overall return rate. Most CD accounts gain only a fraction of their value during their deposit period – typically six months to a year – and fail to generate decent returns. As such, they’re a safe way to store money for the near term, but a very bad way to generate a lucrative empire within the course of six months, a year, or even more.

At the same end of the safety scale are money market bank accounts – accounts that, unlike savings accounts and other no-risk accounts – are invested into the stock market and other securities. Many of these accounts are backed by the confidence and financial reserves of the Federal government – a characteristic that limits their overall risk, albeit with a slight decrease in their earnings levels.

Outside of the standard banking system, an investment in bonds can also prove safe and decidedly short-term in its nature. Bonds in government projects, such as Treasury bonds or local debt, aren’t quite as safe as an FDIC-backed bank account, but they’re close. These are claims to the debt that’s built up by Federal or local governments, and can be claimed back with due interest and rewards.

As such, they’re closer to a mid-term investment than a short-term one, requiring a time investment of several months, or often a year, to see significant earnings. They’re also far from lucrative, with a bond typically paying around the same amount as a similar bank account over its time period. They are safe, simple, and easy to manage, however, making them an accessible short-term investment.

Although generally considered a high-risk investment avenue, the stock market is also a good way to preserve your money in the short-term. Blue chip stocks, which are stocks in companies with an extensive history of stability and credit, rarely drop in value overnight. This makes them a potential option for those willing to take a slightly greater amount of risk in their short-term portfolio.

There are many other safe short-term investments, all of which could potentially improve your financial state over the near term. However, they’re for you to find – many of the most valuable, rewarding, and lucrative investments require a keen eye for research, and lots of time, to find.

Otherwise, these investment opportunities – all of which are safe, secure, and rewarding – could be your best short-term bets. While safe short-term investments aren’t going to make you rich, they’re a good way to store money for the near future before reinvesting it elsewhere.

Comments are closed.