There are many aspects to what makes an ideal investment (I have listed some of them below). The five most important are discussed more in depth here. For a quick overview of what you should think about keep on reading!
What Makes the Ideal Investment?
- RISK: Do you want risk involved in your account? Is it okay if you lose the money?
- GUARANTEES: Do you want guarantees offered to protect your money?
- PENALTIES: Are there fees and/or penalties for using or withdrawing your money before a certain date?
- LIQUIDITY, USE AND CONTROL: If you need your money, can you get to it easily and quickly?
- PROTECTION: Is your money protected from creditors and lawsuits? (This varies from state to state)
- LEVERAGE: Does your account allow you to create the most wealth from the least amount of money?
- TAX-ADVANTAGED: Does your money grow tax-advantaged?
- TAX-FREE: Is your money tax-free upon distribution?
- TAX-DEDUCTIBLE PAYMENTS: When you put money in, are your payments tax deductible?
- COLLATERAL: Can your money be used as collateral for a loan if necessary?
- DISABILITY BENEFITS: If you become disabled does someone continue to put money in?
- WEALTH TRANSFERS: Will your money transfer to your heirs tax free?
Keep in mind that these are very basic questions. You should put much more thought into your investments. Check out a more in-depth description of these topics here.