Is it time to start saving?
From piggy bank to longer term goals.
For many of us our savings begin when we receive some piggy bank money from our parents or grandparents. Then, as we get older, all of that hard hearned money from our part-time jobs move into our first bank account. We learn to earn small amounts of interest and get excited when those savings grow.
These first experiences teach us the importance of saving and budgeting. It's about setting expectations and understanding that with a reliability savings account - or other short-term savings - that you get back what you put in.
But what if you've moved beyond short-term savings goals and are working up to bigger purchases or longer-term goals?
The money in your savings account may be guaranteed, but the return is often close to zero.
In fact, when you take taxes and inflation (rising prices) into consideration over a long period of time, each dollar you save may be worth less than you originally thought. If you have longer-term savings goals such as retirement or your child's education, these demand a more strategic financial approach.
The first thing to consider is: the sooner you start saving, the more time your money has to grow before you need to use it. Sure, markets will fluctuate, but time allows you to ride the ups and downs and experience a greater return in the long run - it's called compound interest. Ultimately, your diversified portfolio should move in one general direction: up.
So, now that we've covered the benefits of time, let's compare low and high-risk savings vehicles.
To get started, sign up for Your Smart Money Tool and set some savings goals today.
Then, let's talk about really building your wealth.
|Tags: Building Wealth|