Consumers, like you and I, love choice; it can be recognized that the kind individuals who provide financial investment services have catered quite substantially to this very prominent trait of ours.
As opposed to keeping your cash assets under your mattress, there are an innumerable amount of alternative investments now available which offer varying incentives, returns and features to meet the needs of every kind of individual in society.
A young person, who is embarking upon adult life in the workforce or further study after high school today, may not feel the same urgency to provide for their future and that of their family as, for example, a middle-aged parent or elderly person. Still, a young person is able to understand the sense in keeping their money safe in a bank or alternative financial institution, allowing them to earn interest on their deposit over time. To them, convenient access to their funds, along with savings incentives, is arguably more important than attractive rates of return since they require an ability to deposit their earnings and save for their goals. However, because young people are debatably the largest consumers of non-durable goods, they also require access to their money when they need it. While not necessarily having many financial obligations, it is recognized that it is vitally important to have contingencies such as life insurance in place.
An older person may need to establish a definite savings strategy in order to, for example, purchase their first home or to pay for holidays. As such, they may not need regular access to their funds and are prepared to surrender their assets for longer periods of time in return for a commensurate rate of recompense. Being more conscious of value, future contingencies and existing responsibilities, this group of people will often be very selective in regard to issues of the security of their investment balanced against the return they receive.
In addition, there are people who have, either through recent retirement or the proverbial ‘empty nest syndrome’ where children have grown up and become financially independent, accumulated numerous assets and wealth, finding themselves in the position to be able to take greater risk than when they had long-term responsibilities. They may still wish to protect their spouses through over 50s insurance or mortgage protection. For these people it is often the case that they have certain assets they have dedicated to their future well being, and surplus assets which they wish to risk in order to enhance their wealth.
Lastly, but by no means least, are the elderly, who have lived life to their fullest and simply want to cater for their needs. These may include medical contingencies and also bequests to family members. They generally desire to preserve their wealth in preference to risking it to build more, and along with convenience are more than willing to forgo high rates of return for simplicity and security.
