Before you can start saving or investing for the future, you need to find out what your goals are. Only if you know what you saved and invest you can choose the best product to help you realize your goals. If not, you tend to end with personal financial products that are not at all suitable.
Some of the financial goals you have can include your debt, buy a house, start retirement or help your children.
Most people have short-term and long-term personal financial goals. In the short term you might want to buy a new car or pay a summer vacation, while in the long run you might want to pile up savings to retire. And, you might have more than your own future to consider: If you have children or plan to have it at several stages, they might want to go to the university or need help up the housing stairs, and you need to plan to fulfill the financial goals private too.
Different personal financial goals require different investment vehicles so it is important for you to know what you want and then prioritize it. If you invest for the long term for retirement, for example you have to invest in equity because, historically, they produce the greatest return over time.
However, they are not suitable for short-term investment purposes because they are very volatile the value of your shares might drop right when you need cash to buy your new car. But if you don’t need cash for years you have a lot of notification when you need to sell your shares so you can do it when you stand up to get a profit. Maybe there are times for years you have them when you suffer losses at least on paper. But it doesn’t matter because potential losses don’t realize unless you really sell.
How to save without sacrifice
If you save for a vacation or new car, invest for the short term, remain on a savings account that pays the highest interest rate you can find. At least you are guaranteed to get your capital back, plus back. You don’t risk your cash. You will not make a big return that you might make on stocks and share but at least you know there will be no losses.
If you save for a new vacation or car – invest for the short term – remain on a savings account that pays the highest interest rate you can find. At least you are guaranteed to get back your capital, plus some returns: You don’t risk your cash. You will not make a big return that you might make on stocks and share but at least you know there will be no losses.
Creating personal financial emergency funds
Before you consider investing for the long term, you need to set up your own personal financial emergency or rain funds for the contingency that you can imagine but can’t pay for your wallet or wallet.
The funds must contain enough money to pay events such as sudden trips abroad if you have close families in a distant country, any domestic problem that will not be borne by insurance, major improvements to the car above and above insurance settlements, or a veterinary bill that is not borne by insurance.
It may be wise not to place your emergency funds in an account that offers a higher interest rate in return for limited access as cannot get your money for five years. Problems and punishments related to getting your cash in a short time exceeding extra-earnings.
Emergency cash reserves function as collateral so you can get up investment bad times easier. Know that you can rarely access investment in an emergency. You should not put in a position where you are forced to sell. And your credit card can be a temporary life line, giving you breathing space to reset long-term investment if necessary.