Commentary

June 21, 2013

It pays to invest

Pg-11-It-pays-to-invest-photo
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.”

For more information on investing or other financial needs, call A&FRC at 623-856-6550. The A&FRC, in addition to having trained financial counselors, has free publications, guides, classes and other resources to answer questions concerning finance. One-on-one appointments are also available.




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


 
 

 

Fly, fight & win! Luke plays unique role in AF mission

The mission of the Air Force is to fly, fight and win. The Air Force’s “motto,” as it was originally called, was adopted October 2010. Capt. Gregroy Bollrud of Hurlburt Field Florida, wrote, “It succinctly captures what our Air Force has been renowned for ever since its creation in 1947. Also, the specific choice of...
 
 

Wingman for life

“I look after my wingman. He looks after me. We work together. We fight together.” — Col. Gabby Gabriski, WWII ace Having a wingman has been an essential part of combat flying since the beginning. A wingman is able to watch your “6,” provide support and can offer a different perspective on a situation. These...
 
 

Chaplain’s thoughts

President Abraham Lincoln issued a proclamation on Oct. 23, 1863, which established Thanksgiving Day as a national observance. The proclamation highlighted the prosperity and expansion of the country even while it was engaged in civil strife. It acknowledged that no foreign country had used the civil war as an opportunity to “provoke their aggressions.” Lincoln’s...
 

 
Interstellar_7

Fly Over: ‘Big Hero 6′ and ‘Interstellar’

In theaters: ‘Big Hero 6′ It was bound to happen: when the entertainment juggernaut Walt Disney Company acquired Marvel, it was only a matter of time before a mash-up movie was produced. “Big Hero 6,” produced b...
 
 

AF needs Airmen to maintain identity

Some of us may remember playing the pool game “Marco-Polo.” Some of us may still use this game to entertain our children at the pool today. One player closes his or her eyes and repeatedly shouts out “Marco” while the other players tread water and respond “Polo.” All the while, they attempt to shift quickly...
 
 

New evaluation system calls for accountability

It seems that everyone is overly concerned with the new evaluation system the Air Force is releasing. We should ask ourselves if it is really that scary to have an assessment which fits each of us in a more realistic way. This new system is going to hurt a lot of egos when they are...
 




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