As the global financial crisis continues to ripple its after-effects through local markets, many people seem to be tangled in a web of multiple financial goals, numerous investments designed to meet those goals, and the stress of monitoring and managing. Fledgling wage earners, who have just begun their financial lives, generally worry about too many choices before them whilst retired investors, who have established wealth over a lifetime, tend to stress about its adequacy.
Fortunately, there are a number of ways of generating strong personal wealth for instance adding a second source of income, growing present earnings, investing in real estate, and by being hardnosed and a bit cautious in determining how to spend hard earned money. Saving and investing are still some of the ways of ensuring economic security. These mutually interconnected elements are simply another step on the footpath to wealth and opportunity. However, the concept of saving is often confused with investing, but in actuality, each concept requires a different approach and a different way of thinking. In brief, saving is a traditional approach that involves taking minimal risk. It is a mind-set that involves putting aside disposable money. Investing, on the other hand, involves taking a measured degree of risk to achieve longer term goals such retirement plans.
According to the eternal success belief, life is nothing more than a game of numbers –the more risks you take, the more rewards you will earn. Investing can produce greater financial rewards but it involves some element of risk. Investments are always a gamble, in other words, investing is a game of chance and risk-taking is part and parcel of the strategy. The prime objective is to make money grow by keeping ahead of inflation and using current interest rates to your advantage. The big secret is to find an exact balance between hopeful excitement and sleepless nights.
‘This can be achieved by setting financial goals which will not only enable but also guarantee that individuals can meet the expense of things that they really desire. Saving and investing money is vital to achieving financial goals.’ – Karen Smal, Acting Head of ACCA
Not only does saving and investing help individuals afford education and specialised training but it also supports individuals to make a stable down payment on a home, start a business, or make an essential purchase, such as a car. It can also help individuals deal with the expense of a personal crisis or emergency.
We cannot predict the future. However, we can manage our existing state of affairs bearing the future in mind. Thus the sooner individuals begin to save and invest, the better prepared they will be. So, budget well and commit yourself to putting aside money on a regular basis. In short, people should work smartly, invest strategically and spend less. It may not be attainable at all times, but having that goal in mind is a step closer to achieving it.