Over 50 million Americans are investing cash long-term

Financial experts don’t see cash as a great long-term investment. Yet, a recent Bankrate report found that 54 million Americans prefer cash investments with money not needed for more than 10 years.

People prefer cash because they see it as safe and predictable, unlike stocks.

Is cash really safe?

Financial advisers would argue that cash is anything but safe in this era of ultra-low interest rates: you simply cannot earn enough interest on cash to keep ahead of inflation. They see cash as a great short-term savings tool that’s there when you need it for emergencies.

Bankrate found that the most popular investment option for money not needed for more than a decade is real estate (25 percent), followed by cash (23 percent), stocks and precious metals tied at 16 percent.

The least popular option are bonds (5 percent).

Ironically, bonds can be a relatively safe, higher-yielding alternative to cash. Yet, people seem to like this form of investing the least.

Create a plan

Start a plan, thinking both in terms of monthly saving and long-term returns. Having a goal in mind allows you to evaluate your options in terms of reaching it. You can weigh the risks of various options and arrive at “likely scenarios” that allow you to do things such as retire one day without experiencing major financial difficulty.

Savings is the key

Smart investing follows from steady saving, and credit unions such as Travis can help you to maximize your monthly saving goal. Once you know what you can afford to set aside, explore options for short-term investments such as CDs and interest-paying accounts.

For larger investments, Travis Financial Services’ financial consultants can help you figure out a financial plan that best suits your needs. Visit www.traviscu.org or call us at (800) 877-8328 during normal business hours to setup a free appointment with a financial consultant at one of our branches.

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