| Many families have been forced
to give up putting anything aside in savings as the recession
has raged and has forced them to focus on survival. Even if
the household hasn't been hit with decreases in income, they
have probably been called upon to help out relatives or even
friends who are in trouble.
The good news: all signs point to recovery in 2010, and the
wise family will begin again to think about putting some of
its income away for a rainy day. Many families have already
drained their savings accounts just to get by until things
improve for them, but it shouldn't be accepted as a way of
life for them. If there is income, there should also be savings.
The question arises, of course, about where the best place
is to put that cash. Our banks are where we think of first-opening
a savings account that will yield interest and where the money
will grow. However, it's good to do some shopping around.
Some bank savings accounts don't have very good terms at all-the
rate of return may be low and the fees high. However, the
matter of safety is worth considering, and sometimes the safest
place to have one's money is in a local bank where you already
have other accounts. Your bank will probably have an investment
officer who can help you think through this question and arrive
at an answer that is best for you.
Credit unions typically bear good rates of interest and offer
other benefits a savings account in a bank does not offer.
A credit union is a not-for-profit cooperative that is owned
by its members. They are typically operated by a mostly volunteer
board. Because of this, credit unions pay their members dividends
and offer them lower loan rates, higher rates on savings accounts,
and very few service fees. These non-profit organizations
are chartered and supervised by the National Credit Union
Administration (NCUA). It's very rare to hear that one of
them goes under. Each credit union has its own eligibility
requirements, so you need to find one where you will fit.
Investments in stocks are another good way to save your money
and to anticipate growth. However, don't be dazzled by stories
of others who have made fortunes in this way. It's possible,
of course, but the risk of the opposite happening is also
high in such investments. In many ways, 2010 is going to be
a good year to get into the stock market. Many stocks are
more affordable during a recession and before recovery is
strong. However, don't try to do it on your own. Following
are some basic facts you need to know:
A share of stock stands for a share of ownership in a company.
A shareholder is a person or company that owns shares in a
company.
A share of common stock gives the holder of that share a vote
on matters of policy and on members of the board of directors.
A share of preferred stock is typically higher ranked; however,
it carries no voting rights although it may carry priority
in payment of dividends. In other words, if your share is
preferred stock, you may be paid before any dividends will
be paid to common stock shareholders.
Some people buy stocks online on their own, but most buy through
a stock broker. A stock broker may also be an investment advisor
who can manage your buys.
Shop around for a broker. Educate yourself on the qualities
to look for before you turn loose of your hard-earned money.
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