Planning for the future is essential for everyone, even young people. Many courses today tell people what to do with their money so they can invest and save for their dream homes, children and their retirement. Investors want to make sure they get the best return on investment.
While some people may think starting in high school or even middle school is too early, educating children before they start working will help them grow into financially responsible young adults and enable them to take advantage of their greatest asset when it comes to investing.
What is that asset? Time.
Compound interest works in their favor because they have so much time until they retire. Many calculations and analyses by experts have shown that a 20-year- old who puts in money for retirement each month will earn more money than a 30-year-old who puts in a larger amount per month over the same period of time. Schools should teach students the value of investing at a young age so they can get the best ROI.
Everyone should know that investing is critical to anyone’s financial strategy. While saving is important, letting cash sit in the bank is not enough to keep up with inflation. A normal inflation rate is about 3 to 4 percent a year, though this could fluctuate depending on the circumstances. Most savings accounts will give you about a 0.5 percent annual interest rate, maybe up to 2 percent if you have a lot of money. Clearly, this is not enough to keep up with inflation. If you invest your money, you need to make sure you can get an average return that is higher than the inflation rate.
There are many investment options. The stock market is popular because it has an average return of seven to 11 percent over about 15 or more years. Mutual funds are another option with lower returns, but you have more options.
While not very popular, buying structured settlement agreements is another way you can invest. Structured settlements are negotiated following a successful lawsuit and the awarded money is dispersed in periodic payments.
When you buy structured settlement agreements, someone hands over his or her payments to you in exchange for a lump sum. You buy the structured settlement agreement for less than its total value. For example, you might buy a structured settlement agreement worth $100,000 for only $90,000. You give the owner $90,000 and he or she will hand you all checks and payments until the full $100,000 has been paid. You can find many markets to buy structured settlement agreements or you can do it on your own. Many people are willing to sell, so you may also approach them individually.