When Saving Isn’t Enough, Try Investing2 min. read
Many people are limited to thinking that saving is sufficient to ensure their plans are fail-proof. However, the economy has its twists and turns, which may affect and disrupt one’s financial status. Investing is not just advisable but essential to be able to maximize the power of money and to secure one’s self financially for the future. If you are currently eyeing to attain specific goals, you can get them up and running in time through investments.
Saving vs. Investing
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case,” says Robert G. Allen. Saving some cash and letting it sit in the bank for a period of time can garner interest but restricted only to a certain percentage. Investing, on the other hand, can generate more possible income as you have control on your target revenue. You can also decide on how you want to grow your money. For instance, you can get a portion of a company’s earnings when you invest on stocks. This is considered an income. Another example is you can buy a lot area and let the value appreciate over time to gain a sizeable amount in the future. Remember, profit can gain you more than interest can.
You might think that paying consistently for your social security can shoulder all your necessities the moment you decide to retire. But you have to face the reality. If you calculate your contribution and the benefits you will receive, the amount you will get won’t be enough for the comfortable lifestyle you want to settle for upon retirement. That is why investing is key to ensure financial stability until the future.
(See Related Topic: 5 Lessons I’ve Learned About Saving and Investing)
Time is Gold
Money doesn’t multiply overnight; profiting from an investment takes time. Start letting your money work for you as early as possible. Investing your cash early will enable you to weather the financial rise and fall in the market, having an ample time to recover and profit further.
Keep Your Eyes on the Prize
Setting objectives can fuel the drive to grow your investment. Determine your short-term, mid-term, and long-term goals. Importantly, set a deadline on attaining each of your aims, may it be big or small. Alongside your plans to get married, buy a car, acquire a house, or put your child to school, you should also put up an emergency fund. This will serve as your safety net to assist you in cases of financial pitfalls so you can recover with ease.
Use Your Head
Educate yourself about the type of investment you are planning to put your money in to, first and foremost. Talk to a licensed broker to know how your money will course through. Ask how much you can possibly gain from your potential investment and when you can see results. Never sign a deal without fully comprehending the whole process. Here are some suggestions you might want to invest in to:
- Mutual funds
- Real estate
- Metals and gems
- General merchandise
- Other small businesses
You may also tap banks and other financial sectors for assistance when trying to make an investment. It is also important to bear in mind that you are taking a risk so do not keep your hopes high too much. The key is to a profitable investment is to learn to handle your money smartly.