Countless US citizens are struggling with the unpredictability of the current economy. The COVID-19 pandemic has put moderate to low income individuals into a precarious financial position, making it difficult to keep up with daily expenses, pay debts, and save up for future endeavors. In such a tumultuous time, it might seem counterintuitive to start investing. But this isn’t entirely true. Though investing always carries some form of risk, remember that these risks come in varying degrees. And there are several options that offer minimal potential losses. Here are four examples:
1. Certificates of Deposit
A Certificate of Deposit (CD) is a fixed-term loan that you offer to your bank. You let them keep a specified amount of your money and, in return, they pay you back with a guaranteed rate of interest after several years. The longer the term, the more interest the loan yields. CDs are a popular choice because they offer higher interest rates compared to a regular savings account. Plus, they’re insured by the FDIC and NCUA (for credit union accounts), so there’s very little margin for loss. The only downside is you aren’t allowed to withdraw from the amount you loaned, or you’ll be penalized.
2. Bond Funds
Bond funds are another type of fixed-term loan. This time, it’s to your government. The two main types are US Treasury bonds and municipal bonds. US Treasury bonds are issued by the federal government, and terms can span from one year to ten. The short-term loans are safer to invest in because while these bonds are backed by the US government, your funds can still fluctuate in value. Just note that the Treasury rates tend to rise during times of economic instability. As of late, bond prices have been falling while the yields have climbed. For municipal bond funds, these are invested in state and local governments. Whiles these bonds are not as reliable as U.S. Treasury Bonds, one upside is that the interest is exempt from federal tax. Some options are also exempt from state and local taxes.
3. Money Market Funds
Money market funds are another ideal option as they offer very short-term investments where professionals actively manage your funds. Though this type of investment isn’t backed by the government, money market funds always aim to maintain a $1 net asset value (NAV). This protects investors from losing principal investments. But note that while the $1 NAV rule applies, it cannot always be followed, especially when the money market can’t adapt to inflation rates or interest rates become low. When funds go below your initial investment, the losses are passed onto you.
Gold is an ideal investment option because interest rates cannot influence its price. Neither is it affected in times of economic and political uncertainty. And there are multiple ways to invest in it. You could acquire physical items such as coins, jewelry, and even bullions. Or, you could invest in gold without having to physically own it. Exchange-traded funds (ETFs) are a good example of this. Gold ETFs are convenient because you won’t need to go through the hassle of ensuring the gold you buy is legitimate and stored properly, and there are plenty of trusted ETFs you can consider. Another option is to purchase gold-related stocks, which funds companies directly connected to the gold industry, such as miners and refiners. Just be wary of the current state of the stock market.
Those are four safe investment options for you to choose from. Many young individuals have flocked to online investment platforms to place their bets on the stock market. However, frequent trading is not recommended, especially given the country’s current economic and political climate. We recommend investing in at least one of the four items on our list before delving into riskier investment options.
That the COVID-19 pandemic has had a significant impact on women is undeniable. In many of the business sectors hit hardest, the majority of employees are women. Ultimately the numbers show women overrepresented, making up 83% of job losses per CNBC.
And even though many states are allowing businesses to reopen, other states are implementing or considering another lockdown. In short, there’s no telling how long this pandemic and its economic effects will last.
If you’re a woman who has lost your job or had your hours cut, explore informative resources at DoughMain Financial Literacy Foundation to ensure you’re applying your available funds in the best possible manner. And know that there are plenty of ways to make money without even leaving your home. Here are some tips to help you get going on the right track:
Due to the pandemic, many of us are facing the reality that our children are not going to be headed back to school in the Fall and instead will most likely continue with virtual learning. There are many creative and engaging ways to teach life lessons outside of the classroom, even if you are not a certified teacher! One area that is important to talk about with children at any age is finances.
The sad truth is that most children are growing up without any financial education whatsoever, whether at home or at school. Since 2016, not one U.S. state has added personal finance to the K-12 standards.(1)
This lack of financial basics is creating long-term negative effects. For example, nearly one fourth of millennials are spending more money than they earn and 67% of Gen Yers have less than 3 months’ worth of savings in emergency funds.(2)
by Robert M. Church, DoughMain Financial Literacy Foundation
Planning for Your Health
Millions of Americans are coping with stress and anxiety as they deal with the unpredictability of their personal financial situations and the future due to the economic uncertainty created by the pandemic.
At-risk populations including moderate-low income, impoverished, women and single parents are increasingly burdened with fears that include the lack of savings, job loss, inability to afford daily expenses, pay debts and their children’s future abilities to afford college. These are very real fears and their impact affects present and future generations of families.
It’s Murphy’s Law that all will go wrong that can go wrong. Without the proper insurance coverage, you risk potentially high costs in the event of an incident. To avoid you or your loved ones suffering harsh financial losses, you should get all the necessary coverage now. Let’s discuss the coverage you need and the benefits that the right insurance policies will bring to you.
Today’s Americans value diversity and inclusivity in the workplace more than ever, according to a recent survey conducted by the Pew Research Center. Moreover, 75 percent of Americans claimed it was important for companies to promote racial and ethnic diversity in the workplace, but only 24 percent wanted race and ethnicity to be considered when it came to aspects involving hiring and promotion. On the other hand, 74 percent believed that only qualifications should be considered, despite the fact that it may result in less diversity. Because of these sentiments, there are still many barriers to entry, with people being left out of the picture because of gender, race, minority backgrounds and a lack of financial literacy. Andrew Anastasio writes how gender discrimination leads to workplace and wage inequality, stemming from societal attitudes. Because of this, efforts should be made towards building more inclusive workforces across all companies, giving students hope that they will find their place in the world.