Tuesday, August 25, 2015, AM | Leave Comment
This is a reminder to change your mindset and your lifestyle by saving and investing more than ever before. You can’t argue against the benefits of compound interest no matter how small the rate may be.
If you are gainfully employed (and more than 90% of the American population is), then you must save and invest.
In addition, you should somehow reduce credit card debt.
You must take control of your finances now and in the years to come. It’s time to do away with old habits of spending more than you earn and replace them with new habits of spending less than you make.
The following are suggestions to help you whip your finances into shape.
Save and invest
If you think you cannot save let alone invest, think again. Maybe you have not tried hard enough. With the magic of compound interest, even modest investment can grow over time.
Reduce your credit card debt
Paying off high-interest debt may be your best investment strategy. High interest will continue to chew off a big chunk from your financial life. Pay off the highest interest debt first.
Raise your rainy-day fund
Many experts recommend to keep six months of expenses in a federally-insured account that can be readily available if and when you need it. Employment these days cannot be trusted completely like the good old days.
Watch out for scams
You probably have received unsolicited phone calls and emails that promises guaranteed high returns with little or no risk. Stay away from the likes of Madoff.
Take control of your hard-earned money
That does not mean you you can solely invest on your own even though you could do that too. Don’t give your money to someone without setting up some kind of monitoring system for your investment.
Save before you spend always works
You always save when you save before you spend. You very seldom save when you spend before you save. One way to do that is regular automatic deductions from your paycheck or bank account into a savings or investment account. It will keep you on track toward your short and long-term financial goals
Know thy investment
Set your goals and the level of risk tolerance you can feel comfortable with. You are the only one who can and should be at the controls.
Revisit your investment portfolio
Some of your investments might be where you want them to be. Others that don’t do so well will need to be readjusted.
Diversify your investment
One way to raise the level of your risk tolerance is to diversify your investment holdings.
Don’t be ignorant about personal finance
It surely can hurt to look at statements when your investments are losing value. That may be the time to readjust your portfolio. Read the statements carefully.
Do your homework before investing
Asking questions about investment opportunities will enhance your knowledge and can help you make informed choices and most of all avoid fraud that’s always in abundance.
In a Nutshell
Changing your lifestyle and your mindset about saving more, investing and reducing debt will definitely put you on the path of financial success.