Thursday, November 12, 2009

Smart Saving and Investing

Many new investors think that they need to invest their entire savings. This isn’t true. To figure out how much money you should invest, you need to first decide what all you want to buy and what you can actually afford. You also need to know what your financial goals are and act accordingly.
Let’s figure out how much of your money you can invest right now. Do you have any savings that you can use? If yes, then good! Just remember that you won’t be wanting to cut yourself short as you put up your money for investment. What were you originally saving for?
It’s important that you keep at least 4 months or so of your living expenses in an accessible savings account. Don’t invest that money! Don’t invest any of the money that you’ll be requiring and using in the immediate future.
You need to determine accurately just how much you should keep of your savings and how much that you can use for investing. Unless you have extra funding from other sources, such as inheritance money, your extra savings will most likely be all that you have currently to invest.
Then, you’ll have to determine how much more money you can add with your investments in the future. If you’re nicely employed and will go on receiving an steady income, then you can take a portion of that to help fulfill your investment goal. You should discuss with your financial planner who is qualified and have them to help you set up a budget. They can also aid you with determining what portion of your future income can be used for investing.
With the help of a good financial planner, you should be protected from investing any more than you should be.
For many investment types, an initial investment of a certain amount will be needed. As long as you’ve done your market research properly, you’ll find an investment that will be good enough. So in this case, you’ll probably already know what the initial investment should be.
If you don’t have enough money for initial investment, then you might have to look around at other kinds of investments. Don’t you ever borrow any money unwisely for investing.

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