Basic finance

First step to financial preservation is actually a question.

What is money? and how do I make money?

Sounds pretty basic.

The next question is how do you make money without working for it?
If you answered Certificated Deposites or CD then you are correct.

CDs are basically a safe way to earn money from your local bank. However, one have to understand that the interest rate that they give are just horrific. They are not enough even to adjust for inflation. So, if you think that doing CD will guarantee beating inflation and your money will be preserved. Think again.

Averagely, inflation is about 2-3% per year. Thus, if the bank's CD issue is not above 3%, a general outlook is bad for your money preservation.

The second most common way to preserve your capital is Bonds. It is relatively safe if you choose the highest grade. Again you need to choose bonds above 2-3% a year and this 2009 20 year treasury is about 4.25%. OH for those you that don't know about the average cost of bonds. It is about 1000 dollars a share and averagely you buy five shares at a time.

A lot of analyst claims that you need to diversify. However, that is not true. As long as you are above 3% usually your money is safe. There are scenarios where your money can devalue. However that is all speculative economics. Historically inflation per year adjustment is about 3% and if your goal is only preserving your money then 4% US treasury bonds will do.

My personal goal minimum is 5%. However to make sure my money is growing at my lifestyle rate. I believe I need to be at about 7%.

There are Stocks and Real estate. That can be considered. However, these catagories now run in the world of risk. Risk is something one have to face when deciding to make a lot or conservatively little of money.

I will talk about them another time...