Your investment saving Information
Many people talk of themselves as being investors. When I hear someone mentioning that he or she is “investing” some money I always ask them: “Are you investing or trading?” I usually get people confused with this little question. The fact is: Most people don’t know what investing is and they cannot tell the difference between investing and saving on one hand and trading and gambling on the other hand.
So let’s look at the four most common types of what you can do with your money if you don’t spend it:
Saving
Saving is about preserving what you have – without the intention of gaining anything. Saving money means you put money away in a safe place, so you can use it later to either invest it, spend it or do whatever you like with it. It does not mean exposing your assets to any type of risk at all. Saving could be in the form of a savings account, cash, gold or whatever does not put your money at risk. An investment fund or a 401K is NOT saving money. Investment funds – like the name suggests is investing.
Investing
Investing has the idea of long term natural growth associated with it. Investing money means giving your money away with a certain amount of risk and the chance for a certain profit. Often the exact amount of the profit is not known in advance. So is the risk that you might lose your money or a part of it. In general an investment is a commitment to convert liquid assets into more illiquid types of assets for a minimum of 2 years or more. Yes, investing is a long-term commitment and something that has made many people unspeakably rich. Investing is not for nervous or paranoid people. It is for the smart and bold. If you are paranoid, you should be saving instead of investing. If you are looking to make quick cash you should be trading.
Trading
Trading is more similar to dealing in any particular goods. There game is buying low and selling high – whether you are dealing in textiles, watches or stocks. The time horizon for a trader is short term. A trade can be from a few minutes to a few months. It doesn’t really matter what the time frame is. What matters is your intention and mind set. If you strive to buy low and sell high, you are a trader – not an investor.
Don’t get excited over your trades. If you a seeking pleasure and you find that trading is actually fun and giving you a certain kick, then you are not trading – you are gambling
There are different intentions associated with different types of actions. They could be described as below:
Mindset: Preserving
Action: Saving
Predictability: High
Risk: Low
Potential Reward: Safety
Mindset: Growing
Action: Investing
Predictability: moderate
Risk: moderate
Potential Reward: long-term appreciation
Mindset: Making money
Action: trading
Predictability: low
Risk: high
Potential Reward: high return
Mindset: Excitement
Action: gambling
Predictability: very low
Risk: very high
Potential Reward: loss
When you go from Saving down to gambling with each step predictability is decreasing and risk is increasing.
So when you think about investing your money, think of your goal first – then decide what your strategy should be.
Steve Brzinski writes for several magazines and e-zines. Visit his stock market investment site at http://www.stockmarket-investor.com/.
Article Source:
ezinearticles.comMany 401k plans and the computer you estimate how much you can expect that at the time when you reach retirement, but there are several important things that many of these computers are not taken into consideration.
Generally the first part of preparation for retirement saving position of developing and putting the money toward tax-protected retirement fund, such as the IRA or 401k. If you do that, congratulations. Around 40% of working professionals not to take advantage of their employer in the pension program and are leaving money on the table.
Once you've developed that saving attitude and started to regularly contribute to your retirement fund, the next step is to make sure that you are actually saving enough so that it will have enough money to you through retirement.
There are two main issues that need to take into account when analyzing, if you are saving enough to be through retirement. He is the first time. How long do you think you'll live? Sounds like a kind of morbid question, but the truth about the people who live longer and longer. Therefore, people May need more money than planned to be through retirement.
The second thing is to think about what your money will be worth when you retire, considering that there is a 3-4 percent annual inflation rate. A 20 year-old prepares for saving for retirement will need several million dollars, and even someone nearing retirement May have another 20 years of inflation to compete against
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Below are seven secrets to saving cash that you can start immediately:
Saving Cash Tip 1 – Know Your Money
This is where it begins. You need to be aware of exactly what your incomings are and what your expenditure is on a monthly basis. The biggest reason why folks spend too much money and often money they can't afford is because they don't have firm control of their money.
Saving Cash Tip 2 – The Things You Need Only
Work out each month what you have to spend money on. This will probably include home payments, groceries, commuting payments, utilities (electric, gas, telephone), memberships, car loans etc. Once you have subtracted this from your income you will have an amount available for your monthly budget for other things. It is this area that you need to examine. Don't waste money on non essential items.
Saving Cash Tip 3 – Use Cash Or Debit Cards
Another great way of saving cash is by using a debit card or cash when spending. This is far more disciplined than using credit cards as you may think there is no limit when using credit cards. When you use cash then this will probably make you think hard about buying high ticket purchases as it will significantly reduce the cash you immediately have available.
Saving Cash Tip 4 – Record All Of Your Outgoings
Saving cash is often a mindset problem – because you don't know your financial position you feel at liberty to spend whenever you want. By specifically recording everything (yes everything) that you spend you will soon build a clear picture of your spending habits. If it's possible to get a receipt for something then get them.
Saving Cash Tip 5 – Find Coupons And Use Them
Coupons are everywhere. It's likely that you receive mail outs from many grocery stores and other stores so use them. You can also find coupons online. Google the stores that you use and see what special offers they have this week. You can even schedule your meals this week based on these specials.
Saving Cash Tip 6 – Don't Spend Too Much Time In The Store
This can be easily achieved by creating a list of exactly what you want prior to visiting the shops. Studies have shown that those people who stay longer in shops are more likely to spend more money than those that opt for the shorter visit. Also those that shop without a “list” are much more susceptible to impulse buying as they are not organized.
Saving Cash Tip 7 – Switch Off Unused Appliances
Saving cash with your electricity bill is simple – just switch the appliances off that are not being used or you have finished using. How often have you left your TV set on “Standby” the whole night? Don't do it – it will cost you a lot of money over the longer term. Also if your heating and/or air conditioning is controlled by thermostat turn it down to a sensible level. If you are out working or somewhere else program the timer to switch it off and switch it back on again a few minutes before your planned return time home.
Saving cash is about controlling your mind and being disciplined enough to not only check all of your spending but also to examine your purchasing habits and those of the rest of your family. It may seem difficult initially but once you get used to it it's pretty straightforward. A technique that will help you along the way is just to think to yourself “Do I really need this?” when you are considering buying an item that you don't really need. This will really work for you if you try it.
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Article author: Graham Bowall
