| Fifty years ago, the average worker didn't | | | | and small-cap risk range |
| need to worry about saving for his | | | | |
| retirement. If he stayed with the same | | | | Bonds: |
| company for 20, 25 or 30 years, he was | | | | |
| guaranteed a pension, in addition to a | | | | Basically an IOU from a company or |
| monthly social security check form the United | | | | government, bonds are a relatively safe |
| States government, and medical benefits under | | | | investment. Bonds are issued as a way for |
| Medicare. Still, those same workers generally | | | | corporations and government agencies to raise |
| saved about 10% of their paychecks for a | | | | money quickly. Bonds come with a guarantee |
| rainy day, leaving many with a tidy | | | | that the purchaser will get back their |
| retirement fund. | | | | original investment, with a set amount of |
| | | | interest at a specific date. These |
| Today's workers aren't offered those same | | | | fixed-income investments come in several |
| retirement benefits, yet, many fail to put | | | | categories, or grades: |
| even 5% of their annual salary into a 401K | | | | |
| retirement plan, let alone save additional | | | | -AAA, AA or A offers relatively low risk |
| funds on top of that. Today's worker, (no | | | | |
| matter how much, or how little they make), | | | | -BBB, are medium grade |
| must become a savvy investor in order to | | | | |
| guarantee a comfortable future. | | | | -Bonds lower than BBB have higher risk of |
| | | | default |
| Whether you can put aside $50 a month, or | | | | |
| $500, learning a few investment basics is | | | | -Junk Bonds, offer the highest risk, and are |
| crucial in order to get the best future bang | | | | often worth nothing by their maturation date |
| for your current buck. Here are a few of the | | | | |
| most common investment opportunities | | | | Cash Equivalents: |
| available to both the high and low-end | | | | |
| investor: | | | | This is a type of short-term investment that |
| | | | is easily converted into cash, such as |
| Stocks: | | | | Treasury or T-Bills ( a government note |
| | | | offering low interest) and money market |
| Stocks, or equities, are a way to invest a | | | | accounts, Although a safe investment, their |
| small portion of ownership in a specific | | | | return can be rather low. |
| company. The number of shares that you buy, | | | | |
| in proportion to the number available, | | | | Mutual Funds: |
| determines how much of the company you | | | | |
| actually own. Known as the best opportunity | | | | This popular investment is a simple way to |
| for long-range growth, stocks can be a risky | | | | expand your investment portfolio, by allowing |
| short-term investment. | | | | investors to pool their money in a collection |
| | | | of stocks, bonds, and cash equivalents, in |
| There are three types of stocks available for | | | | order to make the most profit at the least |
| purchase: | | | | risk. The rationality with this type of |
| | | | investment is, if one fund does poorly, |
| -Large-cap stocks, from well-established | | | | another will make up for the loss. |
| companies | | | | |
| | | | Investing money wisely takes a little |
| -Small-Cap stocks, represent lesser-known | | | | research and experience, but today's options |
| companies with fast-growth potential | | | | make investing an option for just about |
| | | | everyone - no matter how much or how little |
| -Mid-Cap stocks, lie between the large-cap | | | | they have to invest. |