Savings and investments: starting point of a financially secure lifestyle

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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.

8 thoughts on “Savings and investments: starting point of a financially secure lifestyle

  1. Savings is a very big part of our lives. While growing up we are taught to save the little things we receive because in this way when we are older we are able to save for our futures. When we later take interest in business we use the skills and interest we developed from saving and start to invest. I feel that although investment is not a solid way to make sure of financial benefits, it is often worth the risk because it can bring a major return as mentioned here. And I feel that some people are afraid of taking that risk and therefore don’t take interest in investment. I feel that already, saving money is a big challenge but it influences our lives a lot.

  2. The terms saving and investing are often used interchangeably and therefore difficult to distinguish between, especially for young adults who are looking to build a strong financial situation for themselves in order to secure their current and future lifestyles. It is important for people to understand their various options when it comes to investing and saving as they need to use their money wisely as it is necessary in the current economic situation of the world. I believe that if people, old or young, are looking to invest and or save their money it is vital that all options are evaluated and if necessary seek professional advice. People need to use their money in the best way suited to their specific needs and wants to ensure current and future economic security. In my opinion this blog is very helpful as it educates people and provides intelligent insights to the financial world of saving and investing.

  3. After having read this post I would like to find out what is the best amount of money that one should save/invest and in which institutions one must invest in in order to yield maximum economic benefits.

  4. Most economies in this world are unstable, therefore I believe investment and saving should be encouraged, so that people can be financially prepared should anything happen to the economy. As mentioned above, saving and investing are still some of the ways of ensuring economic security. Saving and Investment can help individuals in so many ways, they can, for example, start their own businesses which will definitely benefit them in the future. I definitely agree that “people should work smartly, invest strategically and spend less.”

  5. These are very interesting facts about savings and investment. Most economies in this world are unstable, therefore i believe investment and saving should be encouraged, so that people can be financially prepared should anything happen to the economy. as mentioned above, saving and investing are still some of the ways of ensuring economic security. saving and investment can help individuals in so many ways, they can, for example, start their own businesses which will definitely benefit them in the future. I agree that “people should work smartly, invest strategically and spend less.”

  6. According to economists, the South African economy together with the rest of Africa will continue to decline before it picks up (if it will ever) do u still encourage investing under such conditions?

  7. Is the south african CFO risking accountability assessing natural debt incorectly? If so, how can someone in business rebuild the accountability status after having tainted it?

  8. I agree with this article. Saving is a very important thing in todays times, just look back to the 2008 recession, many people lost their jobs. Investing your money whether its in a second source of income or in shares, is always good because it increases your money at a higher rate than inflation. There is risks involved with investing your money, but most of the time it pays off

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