Investing money in the stock market is the No. 1 way Americans build wealth and save for long-term goals such as retirement, but figuring out the best strategy to invest that money can feel daunting. This doesn't have to be the case.
Best way to invest money Everyone has a unique financial situation. The best way to invest depends on your personal preferences along with your current and future financial circumstances. It's important to have a detailed understanding of your income and expenses, assets and liabilities, responsibilities and goals when building a sound investing plan.
To enjoy a comfortable financial future, investing is absolutely essential for most people. As the coronavirus pandemic demonstrated, a seemingly stable economy can be quickly turned on its head, leaving those who weren’t prepared for tough times scrambling for income.
Why invest? Investing can provide you with another source of income, fund your retirement or even get you out of a financial jam. Above all, investing grows your wealth — helping you meet your financial goals and increasing your purchasing power over time. Or maybe you’ve recently sold your home or come into some money. It’s a wise decision to let that money work for you.
While investing can build wealth, you’ll also want to balance potential gains with the risk involved. And you’ll want to be in a financial position to do so, meaning you’ll need manageable debt levels, have an adequate emergency fund and be able to ride out the ups and downs of the market without needing to access your money.
Certificates of deposit, or CDs, are issued by banks and generally offer a higher interest rate than savings accounts. And short-term CDs may be better options when you expect rates to rise, allowing you to re-invest at higher rates when the CD matures.
