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Investment Information
The Decision to invest your money or the funds that are generated at birthdayFund.com is a hard decision. Before you do any investing you will need to determine what your investment needs and goals are. Are you looking to put money away for your child's college fund or maybe retirement. Determining what you plan on using the money for is you first step in investing. Any investment involves a certain degree of risk, usually the higher the risk the higher the return and vica versa the lower the risk the less the return essentially could be. Our goal at BirthdayFund.com is to help you make an educated decision when it come to investing your money, however we are not licensed brokers or financial planners. Make sure you do your own homework when it comes to setting up a fund for your child or for any event. Below is a general list of types of investments or funds, however please note that it does not represent a complete list of plans available. Before deciding on any plan we recommend that you consult a licensed broker or a financial planner. Please see disclaimer at the bottom of the page.
- Low Risk Investments
- Savings Account
- Money Market Funds
- Bonds
- CD's
- Investing to Build Wealth
- Mutual Fund
- College Plan
- Stocks
Low Risk Investments
Saving Account
A saving account allows you to earn interest on your money. A savings account is backed by the federal government through Federal Deposit Insurance Corporation (FDIC). A savings account can be set up at any bank.
Money Market Funds
are mutual funds that invest in short-term debt instruments. Money market funds, also known as principal stability funds, seek to limit exposure to losses due to credit, market, and liquidity risks. Money market funds in the United States are regulated by the Securities and Exchange Commission's (SEC) Investment Company.
Bonds
When a person invest in a bond, essentially you are lending your money to an organization. At the date of issue a bond is has a specific maturity date at which the principal will be repaid. The interest rate that the issuer of a bond must pay is influenced by a variety of factors, such as current market interest rates, the length of the term and the credit worthiness of the issuer. These factors are likely to change over time, so the market value of a bond can vary after it is issued. Because of these differences in market value, bonds are priced in terms of percentage of par value.
CDs
A certificate of deposit or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions. Such CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings accounts in that the CD has a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
Investing to Build Wealth
Mutual Funds
A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instruments, and/or other securities. The fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors
529 College Plan
A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. It is named after section 529 of the Internal Revenue Code. The detailed behavior of 529 plans is determined by state legislation, and while most plans allow investors from out of state, there can be significant state tax advantages and other benefits, such as matching grant and scholarship opportunities, protection from creditors and exemption from state financial aid calculations, for investors who invest in 529 plans within their state of residence.
Stocks
Stocks represent share of ownership in a company. When a company goes public, they issue shares of stocks that the public can purchase on one of the many major stock exchanges. Hopefully as the company you purchased shares in grows over time so will your investment.
Investing for Retirement
401 K Plans
The 401(k) plan is a type of employer-sponsored defined contribution retirement plan. A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wage paid directly, or "deferred," into his or her 401(k) account. In participant-directed plans (the most common option), the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. Some assets in 401(k) plans are tax deferred.
IRA
An Individual Retirement Arrangement (or IRA) is a retirement plan account that provides some tax advantages for retirement savings in the United States. There are a number of different types of IRAs, which may be either employer-provided or self-provided plans.
Disclaimer - The following information is provided as a general and informative summary of types of funds and investing options, and should not be considered legal advice or your sole source of information. BirthdayFund.com assumes no liability for any reliance on information provided, for more information see our Terms and Conditions. For full legal description of Funds or investing information consult a financial planner or a licensed broker. No attorney or client relationship is intended or created by this information.
