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Should You be Investing For Your Future?

Jan 26, 2008
Investing is one of the easiest ways to prepare for your future. Every year, millions of people get married and start families. What they don't do is take the time to plan for their future. When you are young, the future seems far away and it seems like it will be long before you need retirement. The truth is, the years pass quickly and retirement can sneak up on you. One day you are twenty something, just starting out, getting married, having children, and in the next breath you are forty something with nothing saved for the future. Those years can pass in the blinking of an eye and suddenly your future is staring you in the face. So many people charge head on into their lives without making sure that their future, and their children's future, is financially secure.

Princeton University and the Consumer Federation of America conducted a study and found that a whopping 70% of households that have annual salaries under $50,000 have less than $5,000 in retirement savings. In that same report, it was concluded that "most Americans are living paycheck to paycheck." Investing allows you to put away money that will grow so that when you reach retirement you will have something to sustain you. If you invest wisely, you could have a rather comfortable nest egg upon retirement. Of course, any type of investing carries a certain amount of risk, but different investment securities have different levels of risk. Mutual funds, for example, are considered rather low risk while stocks are considered a higher risk. But these are not your only options for investing. The options are varied and vast.

Investment Fund

Investment funds carry certain advantages that individual stocks do not. By investing pooled funds of retail investors, firms retain a fee and reduce risk for the investors. When funds that come from many small investors are used to make these certain investments, they expose the investors to a wider range of securities that they may otherwise not be able to access. This also cuts out high trading costs and it is easier for smaller investors to get in on the action. The two types of investment funds are open end, or mutual funds and closed end, or investment trusts.

Hedge Fund

This type of fund is on the other end of the spectrum as far as ease of investment and typical income bracket for investors. Wealthy individuals and institutions generally use hedge funds because they can use investing strategies that are more aggressive than mutual funds. Hedge fund investors can sell short, leverage, do program trading, swap, arbitrage and use derivatives. Plus, hedge funds are not held to the same regulations and rules that govern mutual funds. Law restricts hedge funds to no more than 100 investors per fund. Because of this the minimum investment amount for hedge funds is usually set extremely high. The average minimum investment amounts for hedge funds can be anywhere from $250,000 to more than $1 million. While a management fee is paid, as with mutual funds, hedge funds differ in that they also collect a percentage, generally around 20%, of the profits.

It is never too late to save for your future. Even if you are 20 or even 10 years away from retirement, wise investments made now can bring you some healthy gains by the time you are 65. Investing can help you have the ability to enjoy your golden years by relieving some of your financial tension.
About the Author
Mark Plummer is a UK based independent Offshore Investment advisor.Has been involved in the financial services and financial planning business since leaving full time education.Before you decide where you want to invest your money please visit this Hedge Fund
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