Investing in your future is a great idea, but not all purchases are created equally. There are a lot of sales people out there who will pitch you on a financial investment that seems too good to be true. Here are five not worth their cost financial investments you can make.
Whole Life Insurance
On the surface, buying an insurance policy that will cover you for the rest of your life may seem like a sensible idea. It secures your money in case the worst happens, and you won't have to see your rates go up as you age like you will when renegotiating term life insurance policies. The problem is the likelihood of needing life insurance for decades. These sorts of policies are intended to secure your investments for your family late in life, and the risk of death far before then, compounded with the fact that life terms can cost as much as ten times that of a partial policy, means that your money is better spent elsewhere.
The hypothetical advantage of commodities is that they tend to rise when stocks are falling, and they're generally more stable than traditional stock investments. That may make them seem like a natural choice for a diverse portfolio. The reality is that commodity producers have a tendency to lock in pricing before sales. The result is largely flat investments that are also volatile and have to work harder to earn you profits.
Timeshares may seem a smart alternative to buying a property outright. After all, you're sharing the risk. But the truth is, timeshares are one of the lousiest investments you can make. They depreciate in value almost as soon as they're purchased, and most timeshare companies overprice the value of their properties from the get-go. Even if you just want a home away from home, you'll probably spend less money and have less stress just booking a hotel.
Investing in currencies may have once been a sensible decision. After all, in the height of American economic supremacy, you could expect the value to continue growing steadily. But with more nations becoming competitive, the currency market is significantly more unstable. The headlines aren't a great way to predict the future of a currency, and this has caused the market for the currency itself to shrink substantively.
The promise of a higher education is a tantalizing one. Universities present themselves as being able to get you a higher paying career, one that will grow your salary over time and easily outpace your student loans. The reality is far more dire. Today, a collective student loan debt of almost $1.5 trillion is shared by 44 million Americans. Over the past 15 years, the average student loans a student owes out of college have nearly doubled.
If you're going to invest your money, it's worthwhile to do your research. The investments listed above can be major financial sinks, but they aren't the only ones. Be vigilant, and speak with a financial investor to figure out the best course of action.
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