Yesterday I provided some links to articles on making money online. So I thought it would be good to provide an article on saving and investing money online as well.
Now, saving and investing is going to be different for everyone especially since the online world is spread across the world. So I can only write to what I do in the United States.
“There are many ways to pay for the big tickets in life – college, weddings, moving, etc. But there’s only one way to pay for retirement and that’s by saving and investing as much as you can over a long period of time.”
The money I’m talking about saving and investing applies to any of the following folks:
- single
- in your twenties
- have no inheritance
- just finishing college
- getting married soon
- paying your own bills
- have some school loan debt
- don’t want to figure it out all by yourself
- have no “extra” money from any additional sources
- you’re a “bootstrapped” individual and not a “funded” individual
- currently working in some kind of form that you are compensated for
- currently looking for work that applies to what you’ve studied in college to improve your financial resources, acquire health insurance and all the other stuff that goes with working like a 401k, 403b, etc.
However, this can also apply to savers and investors of all ages. Whether you’re in your teens, 20’s, 30’s, 40’s, 50’s and even 60’s, I have to say, “It’s never too late to start saving and investing”!!
“Money grows on the tree of patience.”
I’ve consolidated saving and investing into three actions. If you can do all three, that’s great. If you can only do one of the three actions, then that’s great too. The more you do now, the better off you’ll be later.
When it comes to saving and investing, there are many scenarios and situations that might determine how you save and invest. There is also a personal belief system that will guide you as well and hopefully not hinder you from saving and investing.
My saving and investing challenge to you is:
- earn more than the people who came before you
- save more than the people who came before you
- invest more than the people who came before you
- give away more than the people who came before you
- contribute more than the people who came before you
- take care of others more than the people who came before you
…and hopefully we’ll all be around so you can tell us about it!!
3 Easy Steps 🙂
I’ve consolidated saving and investing in three steps:
- Open an Online Savings Account
- Contribute to Your Employers Retirement Plan
- Open and Invest in a Roth IRA
There’s a great saying floating around…
“Live like no one else so you can live like no one else.”
I know someone great said that, I just can’t think who right now. But, I think it’s a great reminder of how over spending throughout life can do to folks later on in life when they look back after all the stuff, all the trips, all the food, etc. and they don’t have enough to enjoy their golden years.
CAN ANYBODY REMEMBER WHEN THE TIMES WERE NOT HARD AND MONEY NOT SCARCE?
– RALPH WALDO EMERSON
Action One – Open an Online Savings Account
This is your “Rainy Day” savings for when bad things happen like unplanned car repairs, you need to buy a new water heater for your home, your furnace breaks down, you need to meet that insurance deductible if you’re in a car accident, you lose your job and need to continue paying the bills for a few months, etc. This is NOT an account to be used for “fun” stuff like a new computer, dinner and a movie, etc.
The minimum to open up one of these accounts is $1.00. Then, setup an automatic monthly deposit and feel your security grow. Increase your monthly deposit annually or as you earn more money.
Here’s how to do it:
- Browse over to www.hsbcdirect.com or www.emigrantdirect.com and open an online savings account currently (2008) returning 3.05% and 2.75% respectively. In 2007 both were paying 5.05%. Don’t worry, both will be back up there – I hope. 🙂 Can’t make a decision? Close your eyes and start clicking in this general area of the page. Hopefully you’ll click on one of the two links I just listed. If not, open your eyes and pick one of them. Just get going.
- Do NOT pick the option that you want an ATM card. This account will be for deposits only for the majority of its life. We don’t want to be withdrawing money using an ATM card. Why? Because it happens all the time. You’re out on a Friday night and you’re short of funds to enjoy a few hours of fun. So, you decide to use your ATM card and withdraw funds from your “Rainy Day” account. Do this for a few Friday nights and see what’s left over when you really need it.
- Link it to your bank checking account so you can setup a monthly deposit from your checking account into this account. The point is to make the deposit automatic so it happens monthly. If you don’t make it automatic, most likely it won’t happen. Check your bank to make sure no fees are incurred at either end of the transfer.
- Check your balance quarterly, monthly, twice a year, or at a minimum of once a year, whatever makes you feel comfortable and sleep at night. Just don’t touch it…if you absolutely don’t have to.
Remember, this is your emergency fund or “stash”. Try and get it to grow to that standard we always here about, 3-6 months of your income or ask yourself, “what would it take to cover 3-6 months worth of my expenses if I was out of work?”
With consistent automatic deposits over a long period of time, you will reach your savings goal.
Note: We will watch the return on our money (yield) to make sure these types of savings accounts don’t go out of favor. However, to keep this automatically simple, we’ll have to be heavily persuaded. We’re shooting for systematic savings that is boring to watch yet very effective.
“We have become 99% money mad. The method of living at home modestly and within our income, laying a little by systematically for the proverbial rainy day which is due to come, can almost be listed among the lost arts. “
More to come…
Subscribe by email to receive the remaining parts of this series by email.
I think that saving in our live is very important. You can save every month small amount of money and buy some valuable or invest.