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Saturday 22nd of November 2008
February 19, 2007

Savings - You Must Diversify

by Kathyrn Lang

The only investment most people are making these days is in their home. Having savings does not seem to be a priority for most.

To truly be financially secure, people need to spread their savings around. More importantly, people need to be saving in the first place.

I know this – but I have to admit that I fall into the first category. The only investment my family is making is in our home. Granted, the home sits on several acres of land, but it’s still one single investment.

Today, we start diversifying.

First, we will be opening a short term savings account, or what I would call a traditional account. The interest rate tends to be a bit lower than that on long term investments, but the money is easier to get to when it’s needed.

Second, we will start a long term savings. This is a bit trickier for me. I don’t want a retirement account for several reasons:
- We want the money available when ever we want the money and not when the government dictates we can have it without penalty.
-I personally don’t intend to retire – I like my job and I like working and I don’t want to stop.

A retirement, or 401-K, account is not for us.

I have been looking into mutual funds, but there seem to be so many fees associated with these accounts. You pay to purchase, you pay to maintain, you pay to sale – it’s a wonder you make anything on them at all.

For us, I’m thinking a CD will be a fairly decent interest rate without the fees. Plus, I’ve found a local account that has a CD that can be bought into monthly. It’s kind of like a long term savings account and will work perfectly for us.

No longer will we be a single investment family. By setting aside money each week, and each month, we will be able to build up short term savings that can be used for car repairs, home remodeling, or other purchases.

We will also be creating a nest egg for long term investment that will have us prepared for large purchases like new cars or maybe even more land or additional homes.

The key for us will not be the getting started; it will be the following through. This is something that we all want, so I know that putting together a secure savings is something we can accomplish as a team.

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