Personal Finance For Dummies®, 6th Edition

Chapter 9. Understanding Your Investment Choices

In This Chapter

• Playing it safe: Bank and money market accounts and bonds

• Growing your wealth: Stocks, real estate, and small business

• Eyeballing oddball investments: Precious metals, annuities, and collectibles

Which vehicle you choose for your investment journey depends on where you're going, how fast you want to get there, and what risks you're willing to take. If you haven't yet read Chapter 8, please do so now. In it, I cover a number of investment concepts, such as the difference between lending and ownership investments, that will enhance your ability to choose among the common investment vehicles I discuss in this chapter.

Slow and Steady Investments

Everyone should have some money in stable, safe investment vehicles. For example, this would include money that you've earmarked for your short-term bills, both expected and unexpected. Likewise, if you're saving money for a home purchase within the next few years, you certainly don't want to risk that money on the roller coaster of the stock market.

The investment options that follow are appropriate for money you don't want to put at great risk.

Transaction/checking accounts

Transaction/checking accounts are best used for depositing your monthly income and paying for your expenditures. If you want to have unlimited check-writing privileges and access to your money with an ATM card, checking accounts at local banks are often your best bet.

Tip

Here's how not to be taken by banks:

• Consider ...