Stock Market Info :: Investing In Savings Bonds

Investing In Savings Bonds

Many people today are investing in savings bonds to ensure they have enough money available when they retire. Thousands of investment advisors are saying that savings bonds are good avenues to ensure financial stability into your retirement years-but is it really true?

Unfortunately, savings bonds often aren’t all they’ve cracked up to be. The bad part about these bonds is that they have a fixed rate of return.

Therefore, while the market typically averages an increase of about 12% per year, savings bonds are often stuck around 5%. They are often much safer than stocks, but the low rate of return negates this positive.

There thing that most people aren’t aware of is that the inflation rate today is 5%. Therefore, even if you do happen to find a savings bond with a rate of return of greater than 5%, you still won’t be making much of a profit.

You will have some more money upon retirement, but it will rake a lot of years of saving to make some serious money.

The bottom line is this: if you really want to be set up for retirement you need to learn how to invest in the market. A savings bond is for someone who isn’t knowledgeable about how to invest.

If you don’t know anything about investing and have no plans to in the near future, than obviously a savings bond is the way to go.

However, a much better alternative would be to learn the stock market, learn how to invest, and put your money in stocks instead of bonds. These provide a much greater opportunity for gain, and when you learn what you’re doing, you can virtually eliminate the risk and guarantee yourself a nice profit.

Warren Buffet and other top investors make gains on their stocks virtually every single year, with virtually no chance of losing because they follow a certain formula that works every time.

Read books about the top investors, and model their success and you will soon have enough money to retire in a short period of time. When you do this, investing in savings bonds will be a virtual non-issue.