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.


 
 

 

Maintenance versus repair … of our Airmen

LITTLE ROCK AIR FORCE BASE, Ark. (AFNS) — This commentary is not about aircraft, vehicles, or even any mechanical components. It’s about our Airmen and how we manage their care and development throughout their careers. The maintenance versus repair concept is borrowed from the maintenance community and speaks to how maintenance managers plan, coordinate and...
 
 
DT_pict1

354th Bulldogs improve in-flight sight

A-10C Thunderbolt II pilots of the 354th Fighter Squadron Bulldogs began flying with a new helmet mounted integrated targeting system. The Scorpion Helmet Mounted Cueing System provides pilots with the ability to rapidly cue se...
 
 
(U.S. Air Force photo/Senior Airman Lynsie Nichols)

Your estimated wait time is…

Did you call the Enterprise Service Desk yesterday, but you’re still on hold today? The Communications Squadron will be uploading the Virtual Enterprise Service Desk application to computers base wide. 1st Lt. Brooke Leigh, ...
 

 

Face of Defense: Shooting victim seeks to inspire others

JOINT BASE SAN ANTONIO-FORT SAM HOUSTON – An Army officer who was severely wounded in a shooting at Fort Hood, Texas, last year is using his near-death experience to give others a new lease on life. “I believe I was given a second chance,” said 1st Lt. John Arroyo, who is recovering at Brooke Army...
 
 
AFAS_pict

AFAS steps up with education programs

Education can be a key to succeeding in life, especially for military members looking to make the Air Force a career. The costs associated with getting an education are on the rise, but the Air Force Aid Society can help take s...
 
 
Fuel_pict

Exchange offers full-service refueling to drivers with disabilities

DALLAS – The Army & Air Force Exchange Service, with the support of U.S. Rep. Tammy Duckworth of Illinois, is adding a new system to gas stations on military installations worldwide to make it easier for drivers with dis...
 




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