Saving money is not easy.
With inflation, bills, and stagnating income, saving is a challenge many struggle with. This makes safeguarding it even more important in order to achieve financial security and stability.
This is particularly important for those nearing retirement or even younger people excited to build their wealth. By safeguarding your savings, you can ensure that you will have the resources you need to meet your financial obligations and maintain your standard of living.
Some of the options to safeguard your hard-earned savings are: Cash & Cash Equivalents, Bonds, Diversified Portfolios, Properties, and Term Deposits.
Cash and Cash Equivalents
Cash or cash equivalents are your most liquid assets, meaning they’re easily accessible and transferable. These include treasury bills, treasury notes, savings accounts, money market funds, and short-term government bonds.
Not only are they easily convertible to cash but they also usually have a low or no volatility.
Bonds
If you’re an aggressive investor, bonds may not be for you.
However, if you’re more interested in safeguarding your savings and maybe earning a bit on the side, bonds are the way to go. Bonds are debt securities issued by companies or governments to raise capital. They typically pay a fixed rate of interest and return the principal when they mature.
Diversified Portfolios
Diversification is basically covering your bases.
If you have a diversified portfolio, containing different types of investments, such as stocks, bonds, and cash, you’re less likely to suffer completely if or when the market affects one of your investments drastically.
Property Funds
Real estate Investment Trusts or property funds are considered low-risk investments because they invest in tangible assets, such as real estate, which typically have a stable value and generate steady income through rent.
Term Deposits
A term deposit is one of the best ways to safeguard your savings especially if you have enough to put aside without needing to withdraw it for a certain period of time.
When using a term deposit, your savings are locked away for a certain period of time, usually between 1 month to 5 years. Depending on the bank, they generally provide a higher interest rate than a traditional savings account and the interest rate is guaranteed for the term of the deposit.
Conclusion
When choosing the right investment option for your needs, it’s important to consider your financial goals, risk tolerance, and time horizon.
It’s also important to remember that past performance is not an indicator of future results, and that the investment options that performed well in the past may not perform well in the future.
Finally, it is always a good idea to seek professional advice before making any investment decisions. Financial advisors can help you understand your options and develop a personalised investment strategy that aligns with your goals and risk tolerance. They can also help you monitor your investments and adjust your strategy as needed to help you stay on track to reach your financial goals.
