U.S.

June 27, 2013

Generate earnings: It pays to invest

Airman 1st Class Grace Lee
56th Fighter Wing Public Affairs

LUKE AIR FORCE BASE, Ariz. — Though it’s impossible for money to grow on trees, by investing and with time it can multiply.

An investment is the commitment of money or capital used to purchase financial instruments or other assets to gain profits in the form of interest, income or appreciation, said James Knuckles, 56th Force Support Squadron Airman and Family Readiness Center community readiness consultant.

“Due to compounding, investing transforms your working money into a state-of-the-art, highly powerful income-generating tool,” said Cory Carmichael, 56th FSS A&FRC community readiness consultant. “Compounding is the process of generating earnings on an asset’s reinvested earnings.”

Compounding requires two things to work, time and the reinvestment of earnings. The more time given, the more the amount of income will be able to accelerate and grow.

What about reinvestment of earnings?

Investments come in many forms, Carmichael said. They vary from conservative safe bonds, mutual funds and stocks to riskier alternative investments. A person’s investment should mirror their willingness to risk their money and financial goals.

A few other types of investments include real estate, gold and futures, which are contracts that attempt to predict the value of securities on merchandise, currencies and the stock market, Knuckles said.

You can also invest in a Thrift Savings Plan, Individual Retirement Account or a 401(k), Carmichael said. Many service members favor the TSP due to the choice of index funds, low costs and the asset allocated lifecycle fund.

Carmichael advises to invest at least 10 percent of your income.

“I like to say, ‘save until it hurts,’ but at the least, invest 10 percent of your income,” he said. “Remember that you are investing in your future. However, if you are living with any consumer debt or lack an emergency fund of at least three months of living expenses, then that should be a priority.”

It’s recommended to diversify investments to mitigate the risk of financial loss.

“Diversifying your investments is similar to the practice of ‘not putting all your eggs in one basket,’” Carmichael said. “If you spread your investments across various types of assets and markets, you’ll reduce the risk of catastrophic financial losses, since different securities perform differently at any one point in time.”

To be financially successful Carmichael recommends investing early in life and regularly, and staying invested.

“For every five years you delay investing, you will have to double your monthly investment amount to achieve the same goals,” he said. “Remember, you and no one else are responsible for your own financial success.”




All of this week's top headlines to your email every Friday.


 
 

 
(U.S. Air Force photo by Staff Sgt. Adam Grant)

AFSOUTH Liaison Officers: Embarking on a journey toward a promising future

Colonel Alex Voigt has only been serving as the Air Forces Southern Chilean Liaison Officer at Davis-Monthan for a couple of months, but with a history of Chilean LNOs reaching the rank of general and one even going on to serve...
 
 

D-M commander mixes it up with ‘The Morning Blend’

(U.S. Air Force Photo by Airman 1st Class Chris Massey) U.S. Air Force Col. James P. Meger, 355th Fighter Wing commander, Davis-Monthan Air Force Base, Ariz., talks with TV hosts, Tina Jennings and Maria Parmigiani, during a live recording of “The Morning Blend” at KGUN9 Studio, Tucson, Nov. 24. Meger went on the show to...
 
 

Let’s talk turkey: Prepare the perfect bird this holiday season

Whether having a big group over to share the Thanksgiving festivities or it’s just you and the Family, the centerpiece of any Thanksgiving table is the turkey. Guests will graze around the appetizer table careful not to fill their bellies in anticipation of the plump, juicy turkey and all the fixin’s. Most people aren’t world-renowned...
 

 
DoD

New allotment rule protects troops from lending scams

WASHINGTON (AFNS) — Defense Secretary Chuck Hagel has directed a policy change in new paycheck allotments to prevent unscrupulous commercial lenders from taking advantage of troops and their families, Pentagon officials said Nov. 21. According to a Defense Department news release, effective Jan. 1, 2015, the change in DOD’s financial management regulation will prohibit service...
 
 

Officials highlight health, wellness resources for Military Families

WASHINGTON, Nov. 21 – As efforts continue to strengthen service members and their families, Pentagon officials held a Bloggers Roundtable to highlight the myriad resources available to tackle the unique military and transitional challenges those who serve may face. Deputy Assistant Secretary of Defense for Military Community and Family Policy Rosemary Freitas Williams, Marine Corps...
 
 

Thanksgiving and our Native Americans

PETERSON AIR FORCE BASE, Colo. — On the fourth Thursday of every November, we as Americans celebrate the national holiday Thanksgiving. This day focuses on honoring the early settlers, and their harvest feast, which we know to be the “First Thanksgiving.” However, long before settlers came to the United States’ East Coast, the area was inhabited by...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Directory powered by Business Directory Plugin