Since 2008, the world economy has been a shaky one to say the least. It has plummeted to the ground taking the investments of many with it with horrific results for many investors. Things could have been worse. Within a short two years, the world economy began to recover and will continue to move forward as long as people begin to make smarter investment choices.
The definition of investment is often a monetary term however it doesn’t always have to be the case. Society can also invest in themselves through good health and education which in turn leads to positive financial investments. 2011 should be a year in which people focus on not just investing in shares, real estate, managed funds or gold but a year where they consider their health and education as one of the best investments they can make.
The ‘recession’ showed the world that people are not invincible and that it’s impossible to constantly make money, especially when the basis of that is debt. Debt is the evil in all investments and borrowing funds for anything should be thoroughly reconsidered. So the first smart investment for 2011 should be to get rid of unnecessary debt or more specifically consumer debt which is any loans that have been taken out to pay for depreciating items and liabilities, for example; a car, home appliances, 3D television or a holiday. Once the debt is out of the way there is more money to invest with.
Looking for get rich quick schemes will only lead to trouble. In 2011, a smarter investment will be to look at long term investments that don’t necessarily bring huge growth but are more stable. For people who have large amounts of cash buying a positive cash flow property or one that breaks even may be a good investment for the long term. Money in real estate is locked down and less accessible than other investments which means that you are more likely to still have it ten or twenty years down the track.
For investors who prefer to have quicker access to their investments, who want to watch what is happening on a daily basis, and want their funds to be more accessible they may choose shares instead. That way they can have their money within three days if necessary, however, shares are also a long term investment that can bring many good returns. Investing in shares which pay dividends can provide investors with a bit of extra cash flow throughout the year.
Putting money into a savings account may not bring the same results as shares or real estate but it’s a safe investment that will ensure there’s cash available when necessary. Investing in an ‘emergency fund’ or ‘rainy day’ account can protect against future downturns in the economy. Aiming to build an account with at least six months worth of income is a smart investment choice for 2011.
Investments come in various forms and not every type is suitable for every person. It’s vital to consider what you want to achieve from you investments. Is it security? Passive income? Retirement savings? Or something else? Knowing the answers to these questions will help find a suitable and smart investment for 2011.