You’ve probably heard it before: the very first aspect of financial security is having an adequate emergency fund.
Having proper cash reserves can solve a multitude of life’s expected problems, whether your transmission blew up while leaving for your family’s cross-country road trip or your job got the axe in the latest round of layoffs. But how much should you keep in reserve for emergencies? And where’s the best place to put that money in the meantime?
Although investing may seem like a guessing game, there are consistent principles that promote reliable long-term outcomes. As you consider investing to save for your personal financial goals, understanding these principles can enable you to meet your long-term financial goals with your investments.
When investors fear a market down-turn, some are tempted to seek shelter for their retirement funds in annuity contracts. An annuity is an insurance product that pays you a fixed monthly income for life. Annuities come in huge variety, due to different features, interest rate determinants, payout schedules and contract specifications. Even considering only the best of this group, investors usually are better off with a properly managed investment portfolio than through an annuity.