Practical Ideas to Achieve Financial Freedom – Part 4

December 26th, 2007 | Stacey | Residual Income, Passive Income, Financial Independence, Financial Freedom Opportunities, Financial Freedom

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Today we will resume our series offering practical ideas to achieve financial freedom and discuss various types of traditional investment products and how to use them to earn passive residual income over time.

There are many vehicles you can take advantage of to become financially free and we will review most of them over the next couple of days. Consider a few of the common accounts used to generate additional income:

-Savings accounts are good place to store funds and are usually insured by the FDIC for up to $100,000 at one institution. However, the interest rates paid on savings accounts tend to be rather low.

-Certificates of deposit (CDs) earn more interest than savings and are all low-risk and FDIC insured for up to $100,000 per institution. Money has to be held in deposit for a specific period of time and the longer the time, the higher the rate of interest paid.

-Money market deposit accounts earn slightly higher interest rates than savings accounts while still allowing access to your funds. Often a minimum deposit of $1,000 is needed and there are limited withdrawals or transfers allowed.

-401(k) plans may be offered by your employer for retirement savings and you can contribute a certain percentage of your income. Contributions cannot exceed certain amounts and several investment options are available, including CDs, stocks, mutual funds and bonds.

In the next part of our series about how to achieve financial freedom, we will discuss additional financial investment products to help you build passive residual income for a more secure future.