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Also, we have matched for you the most popular financial instruments (CDs, stocks, etc.) with their appropriate level of risk. Notice that the higher the return potential is, the higher will be the risk involved.� For example, a Mutual Fund will give you a greater rate of return than a CD, but it will also be more risky...meaning, again, that you have a greater potential for loss with the mutual fund than with the CD.��

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Before you start trying to get involved in the upper rungs (stocks, etc.), you should set aside 2-3 months (atleast) of normal monthly expenses in a low risk account(s).� Why do this first instead of stocks?...this sounds boring!� Well, take a clue from the rich!� The wealthy in America frequently do this to take care of life's emergencies that will inevitably come.� They have learned the secret that you don't want to have to be in debt to anyone but yourself.�� It is smarter to lend to yourself...the interest isn't as high!

Now, since a rainy day fund is meant to be for emergencies, you want to have this money stored in an easy to access account.� Our first choice for this is a Money Market (MM) account in a bank or brokerage firm.� What is a MM account?� It is just you lending your cash to somebody else so that they can go invest it.� Your local bank typically has a MM account, but you can also find them on the Internet (such as CitiFi, Telebank, etc.)...and usually with a better rate of interest.� Wherever you get it, make sure that it is FDIC insured...to give you real peace of mind.� (Both of the Internet examples we gave are.)� Also, make sure that it is easy to withdraw your funds, especially with an Internet-based bank.