Big Idea: “Save Regularly and Start Saving Early”
Saving puts you in control > To have choices in life
Investing gives opportunities > To make your money grow
The reasons to save are many. You can save for a sense of greater security and control, to be prepared for unexpected events, to reduce stress or to provide for a major expense
Research shows that on average a person saves less than 5% of his/her income. Ideally you should at least save 10% of your income.
- To motivate yourself set savings goals such a specific amount you want to save and the period it will take to get there
- Write down your goals it helps you to remember why you were saving for and it makes it more real
- Track your progress regularly
3.Four steps to savings
Savings don’t just happen you must make an effort and a plan to Save.
Step 1: Build an emergency fund.
Keep the money in a savings account or an investment that can be easily cashed and will not be touched unless in an emergency.
Step 2: Pay yourself first
Consider your savings as any other bill, you have to pay regularly every month. This can be done by putting a side a set of amount.
Step 3: Set up an automatic transfer of money
Set up an automatic transfer of money to a savings a/c. this can help to make saving easier.
Step 4: Make your money grow.
- Grow your savings. This will offer a best possible interest rates at a risk level you are comfortable with.
- Give yourself time to take the advantage of compound interest. Compound Interest is the interest that’s paid on a initial deposit and also on any interest that’s been earned on any previous periods, so you earn interest on interest which helps your money grow faster.
4. Increase your savings
Now we will look at different ways to Invest. Every investment comes with a risk, you may not make any money or you may lose money. Generally, more risky investments have a higher potential return and less risky investments have a lower return.
Before choosing an investment, you need to decide how much risk you can handle?
- Assess your risk tolerance
- Establish investment objectives
- Determine when u will need access to money
There are 4 major types of investments:
- Investments that pay interest – Savings a/c
- Shares in a company- Stocks, Mutual funds that invest in stocks
- Property – Real estate, Precious metals etc.
- Direct investment in a business
Three things every investor should know
- Know your self
- Understand your risk tolerance, investment goals and your timeline
- Know your investment
- Is it right for you?
- Will it help to meet your goals?
- What fees apply?
- Know your financial advisor
- Be clear about your risk tolerance
- Explain your short and long term goals
- Verify credentials and references
Remember to choose diff types of investments and choose investments that fits in your risk level and wish your financial success.
For a happy life SAVE INSURE INVEST