Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 2
This is the chapter 1 for my series Ways to Invest when you have $100,000 In chapter 1, I will share with you the conservative ways to invest your $100,000. This is the part 2 for this Chapter. Check my part 1 here.
Suggestion 1: cash Bonus life insurance + Money Market Fund
Before we start, why don’t we have a closer look and understand what cash bonus life insurance and money market fund is.
In part 1, I already explained what bonus based life insurance is. So this part 2 will talk about money market fund.
In general, money market fund is a fund that invests in short term investment. The main investment for this fund is treasury, commercial papers, Banker’’s acceptances, Commercial papers, Futures contracts, Futures options, Short-term investment pools (STIPs), Short-term municipal securities and other short term investment.
Basically Money market fund is having the following benefits compare to other funds.
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1. The value of money market fund unit is always same and set at the value of $1 per share. For example, if you invest $100, you will have 100 shares of money market fund. After 1 year, the fund has 8% of returns then your shares will be 108 and worth $108.
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2. High liquidity because you can buy and sell your fund shares at any time according to the current share price ( The price is revised daily)
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3. Money market fund is a low risk investment because Money market funds invest exclusively in dollar denominated high-quality, short-term instruments issued by the federal government, corporations, municipalities, and banks.
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4. Money market fund can give you tax benefits because municipal money market funds can provide state and federal tax-free income, which can be beneficial for those in higher tax brackets.
Money market fund is a good investment that suitable to most of the family budgets. Sometimes it can bring you a higher interest rate and high liquidity that those Bank saving account don’t have. But one thing you should remember. Money market fund still has its own risk and not 100% can guaranteed you can receive any interest. Sometimes its liquidity also limited. Therefore, please do some researches before you invest in money market fund. Good Luck!