It’s easy to get into the habit of only thinking about long-term investing strategies. After all, how many articles have you read about the importance of saving for retirement? Your company puts on retirement seminars, your financial advisor starts conversations with, “Let’s take a look at your retirement savings snapshot.”
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You panic at the thought that you’re “behind” on retirement savings because of articles like “Have you Saved this Much Retirement Money by Age 40?”
You may get so knee-deep into thinking about your long-term strategy that you neglect what’s right on the horizon, and that means choosing short-term investing strategies.
What short-term investments might appeal to you? Let’s walk through a few short-term investing ideas and some solid short-term investment vehicles as well.
Short-Term Goals You Might Want to Consider
Does the following list show everything you might possibly want to save for in a few months or a few years? Of course not. That’s why personal finance is so individualistic — you can choose your own goals and strategies. However, let’s take a look at a few savings goals you might want to consider.
Start an Emergency Fund
Everyone needs an emergency fund. This one isn’t so much as a goal you “might” want to consider; it’s one of the most important short-term goals you can identify.
Experts recommend stashing away at least three months’ worth of emergency fund money, and if you have a job that’s a little more unstable, such as a consultant or freelancing job, you should save even more. You may want to ramp your savings up to six or even 12 months’ worth of saved income.
Paying off debt can help you reduce the amount of interest you pay on your debts over time. You may want to take this approach if you have high-interest credit card debt. Paying off debt will not only free up your conscience, it can also improve your credit score.
Now, this really doesn’t qualify as a short-term investment because the money won’t go directly into a short-term investment account. Instead, you’ll apply your cash directly toward paying off your debt. However, it’s worth mentioning because many experts suggest eliminating debt before you attempt to invest in short- or long-term goals.
Create Travel Goals
Have a plan to make it to all 50 states and all the countries in Europe? If so, you may have to develop a specific plan to make it happen. Saving for travel doesn’t always land on …….