Our global economy has changed. Our grandparents and our parents could save money for a comfortable retirement. This time has passed. Saving plans have a low rate of interest and the currencies are losing their value.
You will not live a comfortable life by only saving your money. You need to invest your money if you want to move ahead financially.
Save for short term goals and invest for long term goals
What is wrong with saving money today for the long term? The interest rate on savings are very low. The banks take your money and loan it to other people at a much higher interest rate than you are receiving as interest rate. The currencies are losing value, as governments are printing more and more money.
Save your money for short term financial goals and invest your money for long term financial goals. Form the habit of saving and investing. Only if you invest your money you will have long term financial success. Determine an amount that you will be comfortable with to save. The amount must give you a sense of security.
For instance the total living expenses for 6 months. The amount that makes you feel comfortable is different for everyone. For someone a half year of the monthly living expenses will give the person a feeling of security. For another person a total amount of two years times the monthly living expenses will give the person a sense of security.
Form the habit of systematic saving. Save 10% every time you receive income until you reach the amount that gives you a feeling of security. If the total amount you saved is EUR 50.000 and the EUR 50.000 is the total amount that gives you a good feeling for security you can invest all other income coming in your household for a higher return.
By investing your money you will receive a higher return than saving your money. Invest your money where your money will deliver you a return.
Manage your savings and financial freedom account
Save 10% of all your income to your security account. You can also save for several short term goals as your dream vacation, dream car. If you are saving money for several purposes always split the amount (10% of all income) in the several savings accounts. Use one savings account per purpose.
Use one account for security, one account for your vacation, one account to pay off your debt, one account for your dream car. Use the amount in the account only for the purpose of the savings account.
Manage all your savings accounts. Every time you receive income split the 10% of the income in all the savings accounts. Save also 10% of all income you receive to your financial freedom account.
It’s not about how much money you have, it’s about the powerful saving habit that you create. The saving of even a small amount of money places you in a position when a money and investing opportunity comes that you can take the deal. Most people are thinking about spending there income before receiving it.
A lot of things you think you need will flash in your mind. You decide in your mind how you are going to spend your income. Develop the habit of saving and investing instead of the habit of spending. The saving and investing habits are habits for financial success.
If you develop the saving habit you will also acquire other success habits as self control, self confidence and courage. Have determination and force yourself to add 10% of all income to your savings accounts and also 10% of all income to your financial freedom account. This has nothing to do with the amount of your income.
Become financially free
If you follow the systematic habit of saving 10% of your income you earns or receives in your savings accounts and 10% in your financial freedom account, you will for sure become financially free.
If you save nothing you will never become financially free, no matter how much your income is. When you income increases keep saving 10% of your income to your savings account of security until you reach the amount that gives you a sense of security. Additionally keep saving 10% of your income to your financial freedom account.
The amount above the amount that gives you a sense of security you can invest for higher return. Your savings in your savings account and financial freedom account will increase if you keep saving 10% of your income. Do not increase your expenses when your income increases. Most people increase their expenses with every increase of their income.
Form the habit of saving money and investing. Spend what you do spend wisely. Money and investing opportunities are everywhere. The opportunities exist only for those who have the money in their savings accounts and financial freedom account. Keep an open mind.
The real start of all fortunes is the formation of the habit of saving money in your savings accounts and financial freedom account. Get this basic principle in your mind and you will be on your road to financial freedom.
Form the habit of saving money in your savings accounts and financial freedom account and then live up to the habit no matter how much sacrifice it will require. Once you begin implementing these saving and investing strategies right away, you will notice a difference in your finances and you will enjoy the results!
For your financial success!
