Risking Your Financial Stability for Short Term Growth

Is there really such a thing as short term growth? It seems that so many of us are aching to make smart investments that pay off big in a short time period, but this leaves our finances in a risky spot. It is not always worth shooting for that big pay off. You really shouldn’t look at investments the way you look at a lottery. All in all, the term short term growth is sort of misleading. In many cases there is no such thing.

Now it would be wrong to say there is no such thing as quick growth on short term investments. Some people have had success with short term growth. All you have to do is invest your money into a market that is very unstable. An example of this is micro-cap stocks or penny stocks that are wired to move a few times a day.

The truth is that there are a number of options for short term growth, but are only advisable if you really like to gamble with your money. If it is excitement you are after then go for it. If it is stability you want, then stick it out for the long term.

This is not to say that you should never take risks with your finances or investments, but don’t get too greedy in the short term. If you have extra savings that you can play with then investing in certain equities and bonds can be an efficient strategy. Even when using that strategy though it is important to consider the amount of time you intend to keep the money invested, and the amount you intend to withdraw at any given time. The longer you intend to keep the money invested and the less you need to take out, the more you can invest.

The fact is that the rules are much different when it comes to your monthly savings. This is the money where security is a large concern. You need to ensure that this money is around when you need it most, to cover expenses, and in case of emergency. It is a common mistake to get concerned with maximizing returns on these savings. This is where you need to put aside your desire to gamble and play it safe. Even with this in mind it can be easy to be lured into investing in a stock that promises a high payout over the short term. Keep in mind that slow, steady growth can protect you in the long run.

You may feel bad only earning a measly couple of percent with your long term investment but in the end it is a lot better than watching all your hard earned money disappear. Even the savviest investors lose money at times, and this isn’t always a risk you should take with the money you need. Some stocks and investments aren’t meant to hold value over the short term.

In the end, if you want to take a risk with your daily savings then try bungee jumping. Don’t try and fill that need for thrill by risking your savings on a short term whim. You may be excited for awhile but it is likely to be unprofitable over the long term.

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