Newsflash! Don't stuff your money under your mattress! There is a safer alternative.

Everybody's worried about their money right now. Some are resorting to crazy behavior, like pulling all of their money out of the banks and putting it under their mattresses. I’ve been running into the same question lately. “What is a safe investment in a troubled economy?” Keep reading. There is a better strategy than mattress stuffing.

I recently held a seminar to show appreciation to my clients. At this quiet gathering, several of my clients needed a refresher course on the benefits of living trusts, basic information on estate planning, and the need to keep their estate plans up-to-date when things change in their lives. Everyone had a good time, but there was one nagging question that was unanimous. People wanted to know what to expect in our current uncertain financial times.

You know, as a nation we're going through some trouble sometimes. Most of you understand the financial crisis that has reared its ugly head. In an effort to avoid financial collapse, the government has taken steps to shore up the economy. The Federal Reserve is pouring billions of dollars into the financial sector in an effort to stimulate banks to begin making loans again.

People around the world are worried about a government bailout. They question, what if any investments are safe. They wonder what they can do that won't pose a lot of problems in the future. No one wants to be dependent on the wild up-and-down swings of the stock market.

If you're considering getting out of the stock market, what are some good alternatives? You could invest your money in a CD or money market account at your bank. You can also place your money in a fixed annuity.

For some of my clients who are close to retirement or in their latter years, I recommend preserving their capital rather than worrying about its increasing value. By placing capital in a safe place that will give them adequate returns, smart investors may not get high rates of return, but they will protect their assets. That's the best way to deal with money when the economy is causing worries.

Fixed annuities are a great option for savvy investors. Annuities are programs run by insurance companies into which you can contribute money, much like you would invest money in a CD or money market account. The annuity is guaranteed to pay you a certain percentage over its lifetime. The principal that you invest is protected by the insurance company, and it will not lose its value.

Before the Great Depression, a number of professional baseball players placed their money in annuities rather than the stock market. When the Great Depression wreaked its havoc, these professionals were some of the few people that had any money left.

In today's changing economy, annuities are the vehicle of choice for safe investments. Annuities allow you to accrue interest, while deferring taxes on the interest. If you have a CD, you have to pay interest on the interest every year, whether you take that money and use it or not. With an annuity, you let the money grow and the interest is tax deferred until you withdraw it. You can continue to let it grow, and the interest is paid back into the annuity.

 

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