Ideally you should save at least 10% of your total monthly income. But saving money is not enough to become financially free. You need to save money to build the emergency fund for the unexpected crisis. But once there is enough money in the fund, then what you have to do to grow your wealth?
If you put your money in the savings account and get the low rate of return that banks offer you, you actually lose your money in the long term due to high inflation. The government data will show you that there are only 3-4% inflation but in reality there is 9-10% inflation. And inflation is eating all the purchasing power of hard earned money in other words you are actually losing your money by saving money in the bank.
So now you would ask, “How can I protect my money from inflation?”
It is a good question? And the answer of this question is that you should invest your money in those investments where you can get return that are more than the actual inflation.
In the current economic environment, most of the people are afraid, they are asking the same question again and again “Where should I invest my money?” to find a right answer. The answer is clear that to become financially free, you need to save and invest your money wisely.
In the recent financial crisis, the people who once believed that their jobs are safe and they do not need to invest their money, found themselves without jobs. They do not have money even to eat or pay for their home.
Now People have understood that they can no longer depend on the government for their financial future. They want to secure their future, now they have started to talk about the different investments options available in the market.
So, what is the best way to ensure your financial future?
You need to invest your money in those investments that fulfil your needs. Investment of money depends on many factors:
1) Your objectives: Investing your money depends on your goals. What kind of goals do you have? Do you want to buy a home? Do you want to save for the education of your children? Do you want to save money for your retirement?
If you are single and you do not have many responsibilities, then you can take chances with your money. But If you have small children, then you must be very cautious with your money.
3) Risk tolerance: If you are young then you can take risks. The more risks you take, the better would be your results. I am not telling you to throw your money at any risky scheme. But I am suggesting you to invest in small cap growth stocks to get better results. Instead, if you’re about to retire, you should invest with caution, you should invest in big cap stocks that pay steady dividends. If you want to speed up the growth of your money, then you should invest your money in the stock market with the help of a professional whose daily work is investing in the stock market. There are many different stocks with high or low risk, from which you can choose that meets with your goals, age and financial situation.
Note: You can not get rich overnight, it takes a lot of time and patience to grow your wealth properly. If you’re saving your money for your retirement, then you need to invest your money in a safe investment for the long term.
Investing your money will allow you to learn about the many investment options available in the market. You will learn how to set financial goals and which investments can help you to achieve you goals, how much money you should save every month and how much time it will take to achieve your financial goal?
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1. Rich Dad Poor Dad -- This is one of the fewest books that has been on the bestseller list for more than a decade. This book is the best personal finance book of all time.
2. The Richest Man In Babylon -- The book is very interesting and full of short stories of the rich people who reveal the secrets of their wealth. This is a small book but it has improved the financial life of millions of people around the world.
3. Think And Grow Rich -- It is a motivational book written by Napoleon Hill, it was first published in 1937 during the time of great depression. This book has been on the bestseller list from last 74 years.
4. The 7 Habits Of Highly Effective People -- It is a #1 National Bestseller book on personal development, written by Stephen R. Covey. It has sold more than 15 million copies since its first publication in 1989.
5. How To Win Friends And Influence People -- This book is written by Dale Carnegie and it was first published in 1937. Now it takes place in publishing history as one of the all-time international best-seller.
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