By Cheryl Sperling
Savings. We need to have savings to take care of our short, medium, and long term plans. Short term savings may be for financing your travel plan in the coming months or for the tuition of your kids this coming school opening. The medium term savings may be for your plan of buying a car or a house in 2 to 3 years time. And the long term savings goes towards your retirement.
Here, we should make sure that it outpace inflation and tax on it is minimal; thus, maximizing its growth. We should also focus more in building long term assets which will help us create multiple passive incomes, like for example, having an apartment or rental property where you get passive income (the rent) or in an investment that give interests or dividends. Another avenue is to put your savings in mutual funds which are invested in stocks, bonds, or a combination of both, as these financial vehicles surely addresses concerns with regards inflation and taxes as discussed earlier in financial planning.
Savings. We need to have savings to take care of our short, medium, and long term plans. Short term savings may be for financing your travel plan in the coming months or for the tuition of your kids this coming school opening. The medium term savings may be for your plan of buying a car or a house in 2 to 3 years time. And the long term savings goes towards your retirement.
Here, we should make sure that it outpace inflation and tax on it is minimal; thus, maximizing its growth. We should also focus more in building long term assets which will help us create multiple passive incomes, like for example, having an apartment or rental property where you get passive income (the rent) or in an investment that give interests or dividends. Another avenue is to put your savings in mutual funds which are invested in stocks, bonds, or a combination of both, as these financial vehicles surely addresses concerns with regards inflation and taxes as discussed earlier in financial planning.
You would probably ask, how much should I save? Well, most financial experts would recommend 10 to 30% of your income! But there is no hard rule on the amount you have to save. If you could afford to keep more than 30% of your income for savings, well, great! Then your journey towards financial security could be sooner reached. But your success could not be guaranteed if you don't invest your savings on the right vehicle. For sure, your money will not grow if you put it in the bank with 3% to 4% interests time deposit. The better option is to put it in mutual funds invested in bonds, equities, or as balanced fund which is invested in both.
"Let your money work for you!"
0 comments:
Post a Comment