Why You Should Invest?

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Investing has become increasingly important over the years, as the future of social security benefits becomes unknown.

People want to insure their futures, and they know that if they are depending on Social Security benefits, and in some cases retirement plans, that they may be in for a rude awakening when they no longer have the ability to earn a steady income. Investing is the answer to the unknowns of the future.

You may have been saving money in a low interest savings account over the years. Now, you want to see that money grow at a faster pace. Perhaps you’ve inherited money or realized some other type of windfall, and you need a way to make that money grow. Again, investing is the answer.

Investing is also a way of attaining the things that you want, such as a new home, a college education for your children, or expensive ‘toys.’ Of course, your financial goals will determine what type of investing you do.

If you want or need to make a lot of money fast, you would be more interested in higher risk investing, which will give you a larger return in a shorter amount of time. If you are saving for something in the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time.

The overall purpose in investing is to create wealth and security, over a period of time. It is important to remember that you will not always be able to earn an income… you will eventually want to retire.

You also cannot count on the social security system to do what you expect it to do. As we have seen with Enron, you also cannot necessarily depend on your company’s retirement plan either. So, again, investing is the key to insuring your own financial future, but you must make smart investments!

 

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Saving has always been a way of life for people who believed on its power. These people know that they have to save more money in order to create a more established future.

However, as time goes by, more and more people find it hard to save money. They contend that saving is no longer a way of life but a resolution that they have to strictly adhere to just to salt away some amount of money.

Some people even insist that it is no longer possible for a person to save more money because most of them are already living paycheck to paycheck. With all the high-prices of commodities these days, saving more money is no longer workable.

But the point is that people can indeed save more.

How? Here is a list of some modern ways that will let you save more money:

1. Save some percentage from your salary.

Most money-savers automatically take at least 30% from their salary and save them into their savings account. The basic concept here is that most of us spend whatever amount we have on our paycheck, and maybe even more. If you are able to limit that amount, your expenses will unexplainably get smaller.

2. Pay everything in cash.

Credit cards had always been a way of life for most consumers. The problem is that they become so comfortable with it that they tend to spend everything on credit. In fact, statistics show that the average family has an average outstanding balance on their credit cards amounting to $7,000. And they even pay almost $1,000 in each year just on the interest charges alone.

Hence, because of this comfortable shopping, they forget to keep track of their expenses and accumulate more payables than what they can afford to pay.

3. Set goals.

Create goals that you really want and not be fickle-minded about it. If there’s a certain amount involved, be specific with the amount, like saying “I will save $5,000 in a year and not around $5,000.”

Try to set your goals based on your priorities. Have a period for every goal.

4. Check your company’s retirement plan.

With your employer plan such as the 401(k) or the 403(b), you can definitely save more money for the future. Here, your company will deduct a percentage of your salary from each paycheck and invest the amount in your choice of instruments—mainly mutual funds.

The bottom line is that saving is not just a way of life or a resolution. It’s the ultimate gratification that you get as a fruit of your labor.

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There’s nothing more we want than to be able to efficiently manage our money. After all, the money that we want to manage is money that is oftentimes, hard earned. This is where a budget comes in. A budget executed properly, should help you see where your money is going, get more utility out of every buck, and help you save some extra for future use.

1. The first smart secret to a budget is to set a goal. What do you want to achieve? Do you want to correctly appropriate your income into bills payments? Do you want to put an amount aside for a big purchase or a huge investment? By having a goal, you will be able to shape your budget to best serve your interests.

2. Secondly, you would want to take note of where your money usually goes. This includes bills, major but regular purchases (like grocery costs, healthcare costs, and the like), and everyday miscellaneous purchases. Only when you list down where you know your money usually goes will you be able to identify which expenses you can do without. Once you’ve identified these regular expenditures, take into consideration what you can cut back on. How much do you spend on your daily caffeine fix in the morning? How much do you spend on newspaper deliveries to your front door? The measly $2 or $5 of these small purchases cumulatively translates to more than $3600 a year! Instead of buying your expensive latte or reading the newspaper on print, put aside the amount you would usually pay for these small routine purchases in a small container. You will be surprised at how much you’re saving out of your older budget.

Being indebted is a vicious cycle on its own. You’re talking about continuous payments, not to mention huge interest rates. The best way to deal with this is to pay the minimum on all of your debts in order to avoid paying extraneous late fees. Whatever cash excesses you may have, you can opt to add on to the payments you make in your biggest debt. This way, you are concentrated on getting the biggest debts first that cost you the greatest interest rates. Doing this progressively, you’ll be amazed at how much you’ll get off your huge debts.

3. The last and most important step is to jot down the amount you earn the sum you spend. You can make use of computer cash management programs, or make database sheets of your own. Make a system that works for you and will help you keep track of your monthly budgeting progress.

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A lot of teens nowadays do not understand the value of earning and spending money. They were not oriented that investing is necessary even if they are still students. As parents, you play a crucial role in this area.

You should be able to teach your kids on how to save money. They should be able to understand the concept of money and investment as early as childhood. This will prepare them to learn money management, as they grow old.

Here are some tips on how you can teach your children how to save money:

1. Your children should be educated of the meaning of money.

Once your children have learned how to count, that is the perfect time for you teach them the real meaning of money. You should be consistent and explain to them in simple ways and do this frequently so that they may be able to remember what you taught them.

2. Always explain to them the value of saving money.

Make them understand its importance and how it will impact their life. It is important that you entertain questions from them about money and you should be able to answer them right away.

3. When giving them their allowances.

You need to give them their allowances in denominations. Then you can encourage them that they should keep a certain bill for the future. You can motivate them to do this by telling them that the money can be saved and they can buy new pair of shoes or the toys they want once they are able to save.

4. You can also teach them to work for money.

You can start this at your own home. You can pay them fifty cents to one dollar every time they clean their rooms, do the dishes or feed their pets. This concept of earning little money will make them think that money is something they have worked for and should be spent wisely.

5. You can teach them to save money by giving them piggy banks where they can put coins and wait until they get full.

You can also open bank accounts for them and let them deposit money from their allowance. You should always show them how much they have earned to keep them motivated.

Money and saving is not something that is learned by children in one sitting. You should be patient in teaching them and relating the value of money in all of their activities. Children will learn this easily if you are patient and consistent in guiding them and encouraging them in this endeavor.

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