Friday, November 13, 2009

Don't Put All Your Eggs in One Basket Producer

I've written generally about my long term financial plans, but here is some simple, but good advice on how exactly to invest. It's a graphic from a recent addition to my blogroll, VisualEconomics.com. The main idea is diversity. Not only do you want to invest in a variety of companies in different industries, but also in in different countries. It might also be a good idea to put some money in businesses that actually do better in hard economic times.

Another idea mentioned is not investing in the company you work for. Even if you are getting a employee discount on the purchase, you are putting yourself at incredible risk. If your company goes bust, then you not only lose your savings, but your current income. For the same reason, it is probably not a good idea for breadwinners in the family to work for the same company. "But my company is a secure staple of the American economy." Tell that to the laid off employees of General Motors or Jim and Pam from last night's episode The Office.

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