It may seem to go without saying that you shouldn't scatter your family's investments all around, but it is easier to scatter than not. Scattering is risky. It is so easy to forget about a small investment here or there that one could easily be forgotten. If you move without updating the investment holder, it might be lost to you forever.
One brokerage
As the years go by, you will naturally accumulate more stuff, including more investments. Whenever possible, you want to keep all of your investments in one brokerage account - or several accounts with one brokerage.
A Trail of 401ks
Every company where you've worked since you turned 21 could have a 401k account for you. If you don't want to risk losing track of those old accounts, get the money into your brokerage in an IRA where you can manage the money yourself.
The CD chase
If you have a few thousand dollars invested at one bank and another few thousand dollars invested at another in a constant cycle of chasing attractive CD rates, you could be wasting as much money in gas as you're earning above the rate your primary bank is offering. For instance, a CD paying 1 percent per year on $2,000 would pay $20. A CD offering 0.9 percent per year on the same balance would pay $18. Driving across town costs easily $10. Your CD chase just cost you $8 and put that little investment at risk of being orphaned and forgotten.
Better investments
There are investments that are better suited to most savings objectives than CDs. When you open a brokerage account, you get a full buffet of investment opportunities. You are not limited to choosing the maturity of CD you'd like.
Complete Statements
If you have all of your investments in one brokerage, you can view their combined performance on one virtual statement on-line. You can check the balance any time day or night in a matter of moments. If your savings are scattered around town at half a dozen banks, you could spend hours confirming that, yes, as scheduled, another $1.50 has been credited to your CD account this month. If you're not wasting your time checking, you're risking forgetting about the tiny little investment.
Progress
: If you have better investment options, better statements, providing better information, you have empowered yourself and your money to make more money faster with less total effort. You can not only measure your progress more easily you can also make more progress more easily.
Strategy
By having all of your money in one brokerage account you can also get the benefit of having the ability to be more strategic about your investments because you can see them all at once. You can more quickly assess your asset allocation and your diversification, allowing you to prudently accept risk, grow your money quickly and better prepare for retirement.
Make your life easier this year by gathering all of the investments scattered around town and put them to work in one place where you can quickly assess and manage your performance.
This article was originally published on FamilyShare.com. Check out these other related articles: Don't let inflation rob you blind. Outsmart it in your investment strategy, Investment tips for investment daredevils and How much investment risk should I take?
