Wednesday, July 18, 2007

Short Term or Long Term?

I told my neighbors out at my property that I had decided not to participate in their road paving project. It would be nice to have a paved road in front of my property but I think it would not be the best use of the money. My other plan was to use the money to drill a well. This would increase the property value equal to the cost of the well. I could also invest the money in a nice index fund as long as I don’t plan to use it in the next 5 years like the experts recommend. The only reason I would need a well is if I was going to build a house out there. I have a house in town which I am trying to sell because I think it is too big and expensive for little old me. I really don’t need to be building another house unless I suddenly acquire a husband. Then if he wants a house he can build one.

So, how do I know if I am going to need my little nest egg in the next 5 years? Just because I don’t have any plans for it today doesn’t mean I won’t have plans tomorrow. I am always making new plans. It seems a shame to loose out on the extra interest I might gain just because I can’t make up my mind. My other plan, besides drilling a well, was to use the interest to supplement my income if I ever get the courage to quit my job and try to make it as an artist with only a part time job. That could still be possible since I would only be using the interest as a back-up if I couldn’t support myself with other part time work. It is just that investing seems so much riskier, like the money could disappear. It seems so safe where it is at now in its little money market fund. Money means security to me, but the bigger the risk, the bigger the reward. There is a chance that it could do very well and I could finance my dream sooner than I had planned. I think I will think this over a little bit longer and research some index funds while I’m at it.

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