Start as a Saver, then Invest.

joseph n.n. By joseph n.n., 1st Oct 2013 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Money Saving Tips

The article basically gives insight on disciplined saving as a saver aspires to turn to investing.

Start as a Saver, then Invest.

Everyone always wants and is willing to save money but a few are disciplined enough to set aside that little amount either daily, monthly or weekly and not spend it as they incur their regular expenses. Keeping money in a bank and not withdrawing it even at the most pressing moment is almost impossible to many- “after all, I will earn some money again and I will replace that part of this month’s savings that I have spent.” I have been a victim of this and frankly, one never gets to accomplish what they intended to achieve as savings at the end of the period planned for, say, at the end of the year.

Savings can be simply put as that portion or part of income that is not spent, or is put aside after making a spending budget for a given period. Notice the difference between saving and investing: when saving, the expected value of the money at the end of the saving period is exactly the same amount that was input as savings at the beginning of the period. On the other hand, investing has returns. In this way, an investor will either make a profit or make a loss from the investment. An investment is mostly a long-term engagement where risk for money and other resources input is involved. Saving, however, may be done for a short period or for a long period, depending on the intention of saving.

Some people save for retirement purposes- Here, the savings is long term and its intention is that the money thus saved will be spent after the saver retires from employment. This type of saving does not involve much of commitment as many countries will require a portion of the periodic income to be deducted and deposited to the responsible Social Security Funds. Other people will save to purchase items or property that cannot be acquired with money earned at the end of only one working period, say, a month. This kind of commitment requires a lot of discipline, so as not to spend the money as there is no check on the frequency of the savings. Other people will still save money so as to have enough money to spend on such occasions as holidays, end of year parties, birthdays, graduation parties and weddings among others.

The last reason of savings mentioned above is, in my view, the one that requires the most discipline so as to achieve the desired intentions. It is very easy to be tempted to spend such savings as the goals of the savings are mostly luxuries to many and thus they are not necessities. Having being involved in such saving activities and knowing how hard it is to save for such, I discovered the best way is to put such periodic savings in various avenues where such money can only be accessed upon the expiry of the specified period. Many banks offer savings accounts for money to be deposited regularly, but can only be withdrawn after a period agreed upon between the bank and the client. With such accounts, one needs dire commitment to set aside that amount to deposit daily, weekly, or even monthly.

In a more effective way, putting your savings in avenues that can generate even a little income over a short time, and then acquiring that money after a given period, can develop one’s skills of moving from a saver to a qualified investor. One of the things that I do with money that I intend to save is to invest it in the stocks or the securities markets. In this, however, a person needs to know that such commitments are high-risk, high-returns engagements in that the loss or the profit can be huge; expect anything! It is not a necessity to invest in the stock market for a long time, if investment is not the intention. If the intention is to save, putting your money in the stock market for three months or even one year can do a great good to your savings. Try it, but make sure you learn the skill of being able to determine market movements, the skill of speculation, or better yet, precognition. Try saving, then turn to investing, and then turn to philanthropy. A good life, right?


Commitment, Invest, Save

Meet the author

author avatar joseph n.n.
an electrical engineer, a certified public accountant and an experienced banker. writing will focus on investing especially in financial markets, investing in agriculture and innovation articles

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author avatar Sivaramakrishnan A
2nd Oct 2013 (#)

I liked the closing line. To do good one has to start early! siva

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author avatar micheal
2nd Oct 2013 (#)


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author avatar Lady Aiyanna
3rd Oct 2013 (#)

I love to save and usually collect funds in a dumb box before transferring it into a bank account to earn interest. Found it is a better way as you get better money for a higher amount rather than odd change for a ridiculously low rate of interest.

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