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Chapter 10. Everything You Need to Know ... > The Basics of Investing - Pg. 100

Everything You Need to Know About Investing Your 401(k) Money 100 Safety Now if we're the retired person mentioned above, and we're dead-set against anything but safety- oriented investments, where should we put our money? The industry term for investments that are fairly safe from stock market risk are called cash equivalents . Cash equivalents include things like savings and checking accounts at banks or credit unions, certificates of deposit (CDs), Treasury Bills ( not notes or bonds), and money market or cash reserves at brokerage firms. Cash equivalents are very safe and fairly liquid (i.e., you can get your money out quickly). Terms to Know T-bills, notes, and bonds what's the difference? T-bills last up to 1 year (3 months, 6 months, and 1 year). Notes last from 1 to 10 years, but the most common are 2and 5-year. Bonds last for 10 years and beyond. Treasury bills (T-bills), notes, and bonds are debt of the U.S. government. In other words, you are loaning money to Uncle Sam, who uses it to run the nation's business. Uncle Sam borrows your money for short-, intermediate-, and long-term reasons. As a consequence, the difference in T-bills, notes, and bonds is the time the investment lives. The most commonly referenced Treasuries are