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