You should separate your savings and investments into roughly 12.5% portions in 8 different accounts order to diversify and spread your risk so that no one event, theft, or mismanagement of it will ruin the whole of what you had available. For safety sake, you should pick large known brokerage house (Vanguard, TIAA CREF, Fidelity, Charles Schwab, etc.) no load, low expense stock index mutual funds for the investment portion, which should be the largest portion of your money because this is long-term money for which you need growth in order to draw future income to retire or augment other retirement income sources. For savings (no matter the stage, $1,000, $10,000, or three to six-month emergency fund, etc.), you should mostly use financial institution accounts guaranteed by FDIC or NCUA because safety and the ability to withdraw the whole amount at any time is what you need in case you encounter an emergency for which you need this money (uncovered medical expense, layoff, extended unemployment, etc.).
Be aware that no bank should have any more than $250,000 of your emergency fund money or other savings, no matter the number of different accounts it is separated into. The same goes for money held in cash equivalent brokerage accounts such as money market funds. The SIPC insures equity and bond type investment accounts for up to $500,000 against loss caused by mismanagement, malfeasance, theft, and some other situations. Putting money the LORD entrusts to you in one account leaves you vulnerable to losing all your money if that company becomes bankrupt. Financial troubles at that one company, whether temporary or permanent, could render you unable to draw a portion of your money from the account when you really need it during an emergency.
Certainly you should study to become financially literate to understand how you can best invest your money based in a risk vs. reward scenario that most closely fits your risk tolerance. Augment this practice by spreading your savings and investments into different instruments to avoid the problem of losing everything in one fell swoop. It is very unlikely that every company holding your money will be in financial trouble at the same time. We hope that none of them are ever in that situation yet it is best to plan and prepare so that you are not in that position because you only have one or two accounts. This principle of diversification may not help you get the highest return on your money but it will keep you from losing everything when the world is experiencing a sour economy and by investing the largest portion of your investment money in no load, low expense stock index mutual funds you will reap the highest returns the market can bear as you move through your future.
Please pray for this ministry and email any questions. May the LORD bless you richly as you follow His plan!
Genesis 13:2-6, Job 42:12, Ecclesiastes 11:2, Luke 19:1-8, Acts 4:34-37
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