Imagine life without being able to do the things you want. Sure, not everything you want to do during your lifetime will cost money, but it certainly helps provide opportunities. To ensure you have money in retirement, it’s important to save wisely and make it work for you through sensible investing.

Let’s assume you have a 9-5 job that pays the bills. You’re committed to your job and through hard work, you are rewarded with a raise or promotion which increases your income. You begin to plan your future deciding you want children, and possibly you can afford a vacation at least once a year. You have a nice car and have a beautiful home to show. Things are going great, but what impact would it have on you and your family if this all stopped and you had no money? What will life look like in retirement if you spend all your income now and when that income stops, your lifestyle changes dramatically because you haven’t prepared or invested?

Investing is a smart idea.

Knowing the best way to save and increase your wealth can be difficult and confusing. There are many options available to you but gaining access to them and understanding what’s right for you, could mean you need professional help. The first step is to analyse your current position. We recommend reducing high-interest debt and ensure you have savings for emergencies. Once you have done this, then work out how much you can afford to invest from your savings or on a regular basis from your income. Once you know this, you’re ready to begin investing.

Investing 101 and Why It’s Important  

As we get older, opportunities for work reduce and eventually, we retire. It’s then when you need to rely on social security/state pensions and/or your own retirement savings. You may have been sensible and saved for retirement using your bank account, but saving isn’t enough to build wealth if you consider inflation reducing the value of your savings each year by up to as much as 3% in some countries.

Investing is as simple as purchasing something now hoping that it will increase in value creating profit in the future. Traditional investments include investing in real estate, bonds, stock or shares. In the simplest terms, when you invest, your money is working to earn you more money. Long term, investing allows your assets to grow above the rate of inflation.

The Benefits of Starting Young  

When should you start saving for your future? The answer to this is exceedingly simple – as soon as reasonably possible. We should all start saving for our future when we first start working, but the reality is, most people don’t and if you haven’t started already, today is a great choice.

As soon as you have a stable financial income, you should consider taking steps to invest. This will include having no high-interest debt, an emergency fund, and a long-term goal for your investments.

Time is your most powerful tool when investing. Compound growth and dollar cost averaging requires time and consistency. Therefore, the earlier you start and the more often you save, the more wealth you could create with less money.

Here is an example:

If you save $1400 a month for 26 years, compounded annually at 10% – this will generate your net worth into $2,017,670 in 26 years.

This sum of money at your retirement, with a 3% yield on dividends, can conservatively collect yourself $60,530 a year to live on without reducing your saved amount.

Of course, there are various factors to consider before investing a large sum of money.

Risk

Investing intrinsically carries risk. Deciding whether you’re investing for retirement or another financial goal will help to determine what level of risk is appropriate for you. For example, if you’re investing long term for retirement, you may wish to accept a more aggressive portfolio during the early years and reduce the risk closer to retirement or the end of the plan to preserve the wealth you have created within your portfolio.

The Importance of Starting

The most important aspect to saving for any financial goal is just getting started. Once you’ve started saving, ensure you are saving on a regular basis. Haphazard saving can reduce your chances of reaching your goals, having a savings vehicle that automatically withdraws money from your bank account and invests it for you helps to save in a disciplined manner.

To find out if you are in a position to invest or for more information click here

Our Services