Director Of Client Services
Keri Ogden believes that knowledge is power. Unfortunately, our education system doesn’t teach us how to be good investors & most advisors cater exclusively to high-net worth clients. Leaving would-be investors, who are still accumulating wealth, without proper advice. That’s why she joined Investopedia's Advisor Insights and strives to educate clients on the power of investing early and often.
J.D., University of Hawai'i at Manoa
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If your primary objective is growth, then opening a investment account with a growth strategy would generally be more beneficial than opening a savings account. This is because, by investing in the market, you are benefiting from any growth in the market. A conservative estimate of the average growth of the market is 7%. However, this rate of return is not guaranteed and some years the market may deliver returns far below 7% and some years the market may deliver returns greater than 7%. This uncertainty is contrasted by a traditional savings account, where your return is pre-determined by the interest rate you recieve from your bank. While bank accounts offer a steady return, that return is often negatively offset by inflation. I.e. if the your bank offers you 2% interest rate on your savings, but inflation is around 4%, you would be losing 2% each year.
That said, there are many factors to consider when you are ready to start investing, including your risk capacity, risk tolerance, and time horizon. I recommend seeking the advice of a registered investment advisor before diving into the market.
First, it is important to note that investing is generally a long-term strategy for growth, as opposed to a "get-rich-quick" solution. As with most things, one size does not fit all, and it is important to consult a registered investment advisor to make sure your assets are properly optimized for your needs.
That said, it appears you have two general objectives as an investor:
1) Growth (Capital Appreciation); and,
Unless one of these objectives outweighs the other, you may consider taking a 'balanced' approach to investing. That is, allocating your assets into both stocks (which provide potential for capital appreciation) and bonds (which provide passive income). In order to minimize risk, it is important that you are well diversified in both types of securities. Developing a well-diversified portfolio that is optimized for your particular situation is generally best left to an experienced investment advisor.
There is also your desire to start a business to consider. Running a business requires consistent cash flow to cover your overhead, (especially during the start-up phase), so you want to make sure you have all your bases covered in your business before you start putting your cash into the market. After all, investing in your business is a form of investing (albeit a rather high-risk investment).
As far as cryptocurrencies are concerned, investing in cryptocurrency would be considered purely speculative in the current environment. As fiduciaries, most registered investment advisors would not be able to recommend this type of security due to the extreme volatility of the cryptocurrency market, lack of concrete valuation, danger of theft, and the unregulated nature of crypto-exchanges, among other things.