Listed here are some steps you can consider to start saving your money:
Open a savings account: The very first step you can take is to open a savings account with a bank. Shop around and choose a bank which just suits your needs; the one which offers the highest interest rate and low service fees.
Start saving: Now, start putting your money in your savings account. Do not be bothered about filling your savings account with huge cash, it is important to first start putting something into the account, however small it is. Develop the habit of contributing something regularly towards your savings account.
Consider investing your money: You can make more money by starting to invest in the market. Here are some investment options to consider:
- Stocks: When you buy a stock, you actually buy a tiny piece of a big company. Though the stock market abounds with several market risks, you can still make quite a lot of money here with some intelligent dealings. Since there are fluctuations in the stock market, it is advisable that you start investing in stocks after gaining considerable experience at the stock market.
- Bonds: Bonds are defined as a piece of big loan. This can be one of the safest investment options for you because it has the backing of the government. When you buy a bond, you get it back with interest on the date of maturity of the bond.
- Mutual funds: The risk involved with mutual funds is very low because of the diversification of assets across different sectors. Therefore, this can be the perfect choice for you to start your investment career. Because of this reason, sometimes mutual funds are also regarded as risk free investments.
About the Author This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.
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3 comments:
I have a couple thousand dollars so I could probably not more than one DRP, or simply an indication in itself. This information involves other advantages of a brokerage account, but I am new to this and do not understand.
HOA Management
@ lency: Build up your EF. Then with the excess amount, you can start small. Make sure you start off with an amount that you don't need (for the next 2-3 years) because there's nothing worse than having to liquidate your stock holdings in an emergency.
DRP - dividend re-investment plan? DRPs are a good way to re-invest your dividends in additional stocks and is similar to a strategy called 'dollar cost averaging'
@Jack Reed: Good advice at the beginning of your post. But this line isn't necessarily true "Bonds are defined as a piece of big loan. This can be one of the safest investment options for you because it has the backing of the government." Government bonds are backed by the Govt. however you can also buy 'Corporate Bonds' which large companies use to raise finance.
"The risk involved with mutual funds is very low because of the diversification of assets across different sectors." ... in Aust. we call them 'managed funds' ...they may be diversified but still risky and a lot of them have lost about 30%-40% during the GFC. Not exactly safe and low risk. Not to mention the LPTs (Listed Property Trusts) that had huge withdrawals to the extent that they had to freeze withdrawals.
And this is blatantly wrong: "Because of this reason, sometimes mutual funds are also regarded as risk free investments." The only investment that is ever truly risk free would be government bonds and savings account guaranteed by the government...however, even these are exposed to sovereign risks.
People should learn to invest by starting small. And if you have the skills, buy the blue chip(to start) stocks directly and bypass the 'Mutual Funds' and 'Managed Funds.'
If you have absolutely no knowledge, experience or skills then you may as well invest in those funds but they all come with risk.
Cheers, L
Thank u so much for your information.
I am very impress on your information , Its a really very impressive blog.
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