The Key to Saving and Investing
Why is saving and investing important?
- learn to manage your money
- cope with the unexpected
- be able to afford things in the future
- borrow less
- ease financial stress
Benefits of Saving
Saving is important to each individual as well as the world as a whole. By saving a percentage of their income, someone could gradually work their way up to a large sum of money. With that money, they might be able to afford a large purchase or get themselves out of financial troubles. It is likely that they wouldn't even notice the small percentage being saved from every paycheck.
The economy benefits from savings put into a bank because this allows the bank to loan out the money to others in need. The individual putting their savings into the bank can earn interest from the bank depending on the amount of money and the amount of time the money is in the bank.
Some may believe there are risks to saving in a bank but the chance is very slim. Thanks to the Federal Deposit Insurance Corporation, nearly all bank deposits are insured for up to $100,000. In case a bank would fail, most if not all of the savers money will be credited back to them.
Another risk is inflation. Inflation is the gradual decrease of our money's worth, or as we would see it, the increase of prices over time. The money put into savings for a long period of time will not be worth quite as much as it was the time it was deposited.
Tips on Saving
- Go Healthy- skip the fast foods
- Choose a Respecting Bank- Some banks will try to charge extra fees and not pay you the interest you deserve. Choose a bank that will benefit you most.
- Write a List Before You Go Shopping
- Rate Reduction- Try calling the number on the back of your business card and asking for an interest rate reduction. With a little threat to take your business elsewhere, you could save yourself hundreds of dollars every year.
Ways to Save
- A savings account is a safe place to deposit your extra larger amounts of money. Not to mention, by keeping your money in your savings account, you could make a small profit if the bank offers an interest rate.
- Keep a jar or piggy bank around for your loose pocket change. By the end of the month, you might just have enough money to buy something extra.
Getting a job isn't the only way to make money today. Investing money allows a person's extra profits to create more profits while continue to live their daily life. Depending on what is invested in, investing can be even longer term than saving. Contrary to saving, investing is not only a way to keep money safe, it also makes money for you.
Another benefit to investing; when it comes time to retire, a person will stop making money unless they have invested! After they have stopped working at their job, they will continue to bring in profits effortlessly.
Tips on Investing
- Buy Low, Sell High
- Know Where Your Money Goes- Develop a chart or app where you can record spending and earnings
- Remember Trends Often Change
Ways to Invest
- Start with a small amount of money and invest in a large, less likely to fail company like Google, First Solar, Apple etc.
- Buy stock