Six Investments to Improve Your Personal Finance Portfolio

Monday, May 26, 2014, 1:00 PM | Leave Comment

For individuals looking to improve their personal finances, making smart investment decisions can help them get where they want to be. These investments can range from conservative investments like assets or municipal bonds to high-risk investments like private equity. This article will explain investments individuals can make that will improve their personal finance portfolios.


  1. Government Bonds

    Generally considered a very safe investment, government bonds carry the advantages of exemption from taxation, adjustments for inflation, and the backing of strong national governments. Since these bondholders don’t have to worry about paying taxes on earnings derived from them, generally their interest rate is lower due to the resulting increases in net return on investment. While their return rate is low, government bonds are one of the best ways to hold onto a nest egg while still realizing some returns on investment.

  2. Savings Accounts

    While not generally considered as safe as government bonds, savings accounts carry the advantages of instant liquidity and returns generally above inflation. Since returns on savings accounts are based in cash instantly deposited and readily available for withdrawal, these accounts essentially function as cash. Due to these advantages, banks generally don’t offer a very high return rate on these types of investments, but they can still be advantageous for a diversified portfolio.

  3. Bullion

    While bullion, or gold and silver investments, does not yield any returns, it has the advantage of not being based in cash. When dollar prices crash, a diversified bullion portfolio will still retain 100% of its value. Since it doesn’t yield a return, bullion should generally make up only a small part of a well-structured personal finance portfolio.

  4. Public Stocks

    Owning stock shares in public companies is well-known to provide a high long-term rate of investment return. Since these securities are generally considered much higher-risk, a diversified stock portfolio is required to prevent over-exposure to market volatility. While diversification can help reduce risk, even investments in the aggregate stock market have the potential to lose value. Therefore, while investors should invest heavily in public stocks, they should not be the only asset class invested in.

  5. Private Equity

    Generally considered to be the highest-risk category of investment, private equity carries the advantages of potentially exorbitant returns with the likelihood of total loss and extremely low liquidity. Since private stocks cannot be publicly sold, they must be individually appraised and marketed in a process that often takes longer than a home purchase. However, for investors in these instruments, the potential for huge gains can outweigh the costs of their risks.

  6. Valuable Objects

    Another way to invest your money is to buy valuable objects that you think will gain value. You can find these objects using auctions and estate sale services in Anaheim, CA. You have to be knowledgeable about the field in which you want to invest and be willing to hold on to the object for a long time. This is usually considered riskier, because there is a chance the objects will not gain the value you expected.

Having a diversified personal finance portfolio is critical to maintaining and growing existing capital. For new investors, it is generally advisable to work with an investment advisor before jumping in risky investments.

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