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Personal Finance Terms 101: Cash Investments


 

Cashing In on Cash Investments

When coming across an abundant of complex words used in the investment world, it may make you want to run in the other direction. But, were here to break it down for you and make it as simple as possible so that you can have a positive relationship when it comes to financing. So, what are cash investments you ask? Well, it’s a very safe an effective way to invest your money so it grows and created a little bit of interest. That’s great news!

cashinvestments1Some examples of cash investments would be:

  1. A bank savings account
  2. A money market fund

In other words, with cash investments the value of your account won’t be going up and down each day, however, you will be watching it grow as you earn interest on that money. The drawback on a cash investment is that you’re really not earning a lot of interest.

So, if you want your money to grow at a greater rate than 1-2% then you really need to look at other investments that will do that over the long term. So, what is a cash investment appropriate for? Basically, any money that you have set aside for an emergency fund or a rainy day fund, that should be a cash investment.

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