Why It Doesn't Pay to Save
Oftentimes, people shy away from these accounts because they qualify as investments - the money doesn't sit safely in a vault, waiting for you to claim it. Rather, it is invested into different mutual funds or various stock options. However, account holders can specify the level of risk they are willing to take with their money and, according to Schwark, save a significant amount of money through the tax deferment and long-term investment.
Consider investing in the stock market.
Those who can focus on long-term gains should consider getting into the stock market, since the poor economy has driven the prices of stocks so low. "If you can hold the stock for the next 10 years it's a good time to buy," Satyavolu explains.
Buy municipal bonds.
A bond is a formal contract to repay borrowed money with interest at fixed intervals, except in this instance, you are the lender. A municipal bond, specifically, is essentially an IOU from a city or local government agency that uses the funds to finance community projects such as sewer construction or road repairs.
According to Satyavolu, bonds are a good option for cautious investors, who profit from the interest they receive and benefit from the fact bonds are exempt from federal income tax and, in many cases, state and local taxes as well.>To submit a news tip, email: firstname.lastname@example.org.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV