Bank and money market accounts are to be used for goals that will be achieved within one year. One of your goals is probably to pay your phone bill this month. That money came from your bank or money market account. You should try to save a little each month for your big vacation and save it in your bank or money market account.

Remember that bonds are vehicles to help you reach goals in one to five years. If you want to buy a car in three years, you could save up for it using bonds. Bonds also provide income, which we’ll need when we retire. Stocks are investment vehicles for goals that lie beyond the five-year mark. Money you don’t need in the next five years should be in stocks. This five-year window protects you from the ups and downs of the stock market.

Like stocks, real estate is an investment vehicle to help you achieve goals that lie beyond five years. Many real estate investments have high minimum investment requirements. Real estate, like bonds, can also provide income.

Education is often a goal and an investment. The more education you have, the easier it will be to achieve your financial freedom inc goals. This may come in the form of treating an expert to a free lunch or a full-blow graduate degree. Unlike all other investments, there is never a time when you aren’t investing in your financial freedom inc education. Please don’t overlook education as an extremely lucrative investment.

Your own business can’t be tied to a timeline. Some businesses are profitable in five years, others, like the proverbial lemonade stand, are profitable in five hours. But just as you’re always increasing your education, you should always be looking for financial freedom inc business opportunities.

Look at the time limits you have set on your goal sheets to reach your goals. Jot down the names of the investments that will help you reach each goal. If your goal is to retire at age 55 and you’re currently 26, you should want to write stocks and real estate. Your goal might be to earn more money in the next six months. If this is the case, you want to write down education and start your own business. Whatever your dreams are, try to find the investments that will help you achieve them.

One way to protect yourself from investment loss is to buy stocks in many different companies in many different industries. That way, if one stock goes down in value, you still have a bunch of others to make up for that one stock’s poor performance. This is known as diversification. The trouble is that if you bought stock in 50 companies at an average price of $50 per share, you’d have to come up with $2,500. That’s a lot of money. But a mutual fund offers a way around this. It allows you to buy shares in hundreds, even thousands of companies for just a few dollars.

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