Investing With Nonessential Funds

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In the United States alone, millions of dollars are spent on non-essential items. Instead of spending so much on luxuries, that money can be used to invest in our future. That is our economic future as a country as well as our personal future. The vast majority of that non-essential spending comes from people that are living in poverty or struggling to stay above poverty, so you may wonder how we=ill these people be able to invest. This article will explain ways in which people, no matter what their financial status is can make sound financial invests for their future.

WARNING: There is never a guarantee that any investment will net a positive return.

For the new investor and those who don’t have much to invest may want to start off with safer investments. Safer investments are those investments that are more likely to make a positive return, however those returns are usually much smaller than more riskier investments.
Before discussing investment options, a discussion on what it takes to make available funds to invest. As was mentioned in the opening millions of dollars are spent on non-inessential items daily. This is where we find money to invest.  Not all non-essential money need be diverted to investment money. Sometimes we need to actually spend money on non-essential things, it helps our general moral and some non-essential things gives us relief from day to day stresses. The way in which we determine what money is available for non-essential spending and investments, is by budgeting. With a budget in place we see what funds are needed for recurring necessities. Listed here are some of the recurring necessities:

Utilities (note: mobile phones should be considered a necessity if there is not a landline in the home)
Auto payments

Once we have deducted these funds from the gross monthly take home income, then we will have left money for non-essential spending.  Now you comes to the interesting part, determining how to allocate the remaining funds for non-essential spending of which investments is a part. From these funds it is up to you to determine how much you want to use for investments.

Now that you have determined how much you have to invest, we can look at ways to invest. To start you have to choose whether you want to invest in safe or risky investments. Though no investment can guarantee you a positive safe investment come the closest to achieving that guarantee. That is to say you will receive a positive return on safe investments unless the institution becomes insolvent and shut its doors and then the federal government may have insured these investments up to a certain amount.

Safe investments almost always make a positive return, but those positive returns are low-fixed interest rates or extremely long term as with U.S. savings bonds (20 years until maturity). In fact it is smart to start of your investment portfolio but making safe investments. Here is a list of safe investments:

Savings accounts at banks, credit unions,  or other institutions that offer savings accounts. These days many prepaid debit cards offers their cardholders the opportunity to open a savings account with their debit card.
Certificate of Deposits which our generally a 6-12 month investment and offers low fixed interest rates slightly higher than savings accounts.
U.S. Saving Bonds EE Series offers a double the purchase price (face value of the bond) at maturity and continues to accumulate interest for another ten years. But this is a long term investment. Maturity of these bonds is 20 years.
 U.S. Saving Bonds I Series has a two-part interest rate. One part is a fixed rate throughout the life of the bond and the other part is variable and can change depending on how the fluctuation of the Consumer Price Index (CPI-U) every six months.

After the safe investments the investment options gets more and more riskier and usually takes more income in order two invest in these markets. This being one of the reasons why I is better to start your investment portfolio in the safe investment area. Some of the riskier investment opportunities are in some of the areas listed here:

Financial institutions’ money market
Mutual funds
Individuals stock purchases

Additional investment options are available for large investors such as business and foreign investors. For instance, China is the largest holder of US Treasury securities holding 110.7 in $US billions.


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