Part 1 of a Series: "The Safest Money Investments Today"

Today, I am starting a new series. This is Part 1:

"The Safest Money Investments Today"

#1. CASH

First off, I want to clarify one fact: The is no such thing as a completely safe investment. There are a number of 'low risk' investments, but none are completely safe - although people still use the term 'safe' to refer to them.

So, we'll start the conversation about safest money investments with the idea of putting your money in your mattress or burying it in a coffee can in your backyard. (People still do this!)

There are 3 risks associated with this strategy:

• Inflation risk. Assuming 3% inflation, you'll lose 3 cents on every dollar each year.
• Someone could steal your money from your mattress.
• You could forget where you buried the coffee can!

I also include in the Cash category: FDIC Insured banking accounts such as Checking, Savings, Money Market Deposit Accounts and Certificates of Deposit (CD's). These are considered by many to be the safest money investments you can make because of the FDIC insurance factor. However, you are limited to the amount insured by the FDIC (has been raised to $250,000 per bank per individual through 2009).

The risk associated with these investments is inflation risk. The rate of interest you earn on your money will probably not keep pace with inflation, though it's a little better than doing nothing with your money.

Checking Accounts typically pay no or very low interest and access a menu of fees and penalties which usually result in the average account pacing well below the inflation rate. Savings Accounts are notorious these days for their sub-inflation interest rates. Money Market Deposit Accounts pay a little better, but still typically below inflation, and have limitations on the number of checks and withdrawals you can make - therefore: limited liquidity. And even the best Certificate of Deposit investments aren't much above the inflation rate, plus you'll need a very large amount of money to get the best rates. Also, you have to be willing to forego access to your money for an extended period of time, perhaps years, unless you're willing to pay a stiff penalty for early withdrawal (no liquidity). And even then, the interest rates you earn isn't going to rock your world!

So, that's CASH: Safest Money Investment #1. Part 2 of this series will be about "U.S. Government Treasury Bills, Notes and Bonds".

For FREE independent financial advice about safe investing and retirement, visit my website at: www.JohnHanlin.com. I specialize in the safest money investments and the best HIGH YIELD safe investments, particularly in raw land development. (Please fill out the Contact Form on my website if you have questions that the website couldn't answer.)