Return on Investment as a Cash Reserve

Topics: Investment, Saving, Real estate Pages: 1 (484 words) Published: October 28, 2014


A situation where I would have to use my financial reserve would be when the engine of the car I commute to work in blew up. I would have to use that money to get a new engine or just buy a new car. I think that it should be saved up for at least 6 months in case you lose your job you have time to get a new one. If I were to get laid off from my job I would have enough money for 6 months expenses. I would have enough time to get a new job. I’d prefer compound interest. Over time the compound interest will build up and more interest into the account. After a while you make interest on the interest you have already gotten. I would prefer quarterly compounding because since it happens more often the interest turns to principal faster so it earns interest and the principal increases faster. I think paying myself would work best for myself because if I kept the money I would forget to pay myself and spend the money elsewhere. I would want to have a budget set aside for housing and educational needs. Also I would want to have a financial reserve. I would need these before investing so I don’t have to risk of losing everything and so I don’t spend to much. Before you invest your money into something you should know the business. Know what they do and what their plans are. You should also know who runs the business to know if the are trustworthy and reliable. He made 1.2% back.

Real estate and bonds are two examples of debt investments.
An example of an equity investment is a stock or any other security representing an ownership interest. I would incest in unregistered private stock, because there is more of a chance of becoming filthy rich with private stocks than public stocks. A great future investment is that of green energy, because as we develop technology that improves efficiency with harvesting green energy it will become far more widely used. Investing in real estate, especially if you have the skills to fix up and flip a...
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