Due to inflation time value of money is going down. Whatever you can have with the money you have is greater than what you could have in the future with the same money. So it is always a good idea of investing money somewhere without taking undue risk yet making returns instead of putting it in your pocket. But you need to be smart enough not to lose money in hunt of making more.

You need the balance the portfolio of your Savings. If you are ready to invest, don’t invest too much in too narrow range of investment because it would lead to the risk of losing too much in case of worst scenario. For that matter you need to diversify your investments to get to the safer end.

Options you have for investments are investing in Stocks, Bonds, Mutual Funds and Real Estate. Stocks carry greater risk than bonds and mutual funds. On the other side real estate value is really grown over the longer term. So if you are planning to invest make sure that you invest in the longer term and not for the short period. Every moves around cycles and you’ll be gaining if you just keep the investment and let your money grow.

If you want to make sure that your Savings and Investments really count, it is important to estimate how much you can invest. It can be any percentage of you income. You can invest at lower return and lower risk in case of Govt. bonds. You can also invest to areas to higher returns like up to 30% but with higher risk. Risk is the factor we are run from.

So you need to manage your portfolio of investment such that up to 30% of your investment should be risk free. Don’t matter they are just getting the return as low as 1-2% because your remaining 70% will be making higher returns. By doing this you have 30% investment risk free yet you can returns more than 20% overall. It is diversification and if you are the smart investor you need to do this. This is the most realistic approach to investments.

One factor the amount of risk you can take is your own age. It is a big factor when it comes to deciding up to which percentage you can take risk. Older people relies on risk free investments of savings on the other side younger people tries to invest more aggressively.

In the end you need to be smart enough not to lose money in hunt of making more. So it is a good idea no to put all the eggs in one basket. Formula to have money is pretty simple just be patient and enjoy returns from your Savings.