Tuesday, 10 January 2012

Get On Your Way To Succsessful Investing

When looking at investing many people think, I don't have enough money to invest, you need thousands of dollars if you want to make any good return. This is not true.
If you have a regular income and can survive a pay period without spending it all then you are already investing.
Boring though right?
Saving money is an essential component to investing and there are several steps which need to be taken to optimise the amount of money you save and once done you will see your savings increase exponentially.
Make A Goal
Goals are very important. The questions you need to ask yourself are, how much do I want to save? and over what period?
Before you can put anything away you need to know how much money it will take for you to live on. You should come to an amount which isn't so large that it will effect your quality of life. Anything is better than nothing and a few dollars per week add up over time. Remember to think about your goals here, it may be necessary to rethink them.
Choose A Bank
You will already have a bank account which you use for everyday things, for instance, receiving payments, shopping. Do not consider using the same bank to open your new savings account. By choosing a different bank you can not link your accounts which means there are no instant money transfers between your savings and regular accounts. The more inconvenient it is to access your savings the less likely it is that you will be tempted to.
Choose An Account
Banks these days can offer some excellent interest rates which really help boost your savings. All the research you need can be done online when selecting the bank account you want to open. Firstly look for accounts with a high interest rate (usually around 6% is the highest, but that said don't settle for the first account you see offering that.) Another important factor is how the interest is compounded and paid. Look for an account which compounds daily and pays monthly, that maximises the amount of interest you earn. And of course compare any fees and conditions which may be associated with the account (many saving accounts have a minimum amount that you need to save in order to receive that months intrest.)
Cut Up Your ATM Card
You Will likely receive an ATM card for your new savings account. Cut it up. As I said earlier the more inconvenient it is to access your money the less likely you will.
Let The Money Flow
Each pay day put amount of money you worked out earlier into the account. It is important to not put more than you can afford it. Its better to put less in at the beginning of the pay cycle and to wait to see if you have any left when the next cycle comes around. If you put to much in and then need to withdraw some you may miss out on that months interest.
Remember interest earned is free money.
Watch Your Money Grow
Very soon your money will begin growing. Regular weekly payments plus monthly interest will allow you to watch it before your very eyes.
You are now making regular payments. Congratulations on your first investment!

I have attached a video below which I think does a good job as recapping what I have discussed here and it focuses more directly on online only banking accounts.

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