You created a budget, allocated money to savings and the bank is paying you a few cents a month in interest, fantastic right?
Not quite, even with low inflation rates your money would buy you less in a year than it does today.
The first step is to put your savings into an account that pays higher interest. I use INGDirect because they charge no fees and I can withdraw money when I need it but you need to find a product that works for you. Read all the conditions carefully, and look for accounts that calculate interest daily to maximise the return on your money. Now that your money is protected against inflation, it is time to start a major South Bank Project – Develop Independent Wealth.
My three keys to developing wealth are:
- Education
- Seek sound advice
- Dedication
Education. As a new investor, it is critical that you educate yourself on the types of investments and their pitfalls. I learnt my early lessons from Noel Whittaker, an Australian financial consultant, whose straight forward style helped me understand investing and remains my main influence. In America, there are a number of authors vying for your attention including the high profile Suze Orman, Jim Cramer and Robert T. Kiyosaki but I find Bob Brinker to be the most informative. Read widely, and choose an approach that matches your temperament.
Advice. Once you are ready to invest, find an financial adviser that you trust and develop an investment strategy together. Remember, it is your money, be fully involved in the decisions to buy and sell and ensure your adviser understands the goals you set.
Dedication. Be a lifelong investor, never waiver from your financial goals and enjoy the benefits of a sound investment strategy.