Let's just say today was a day of money-thinking - of planning and looking into the possibilities of investing and saving up for a rainy day and for the hopes of self-financed future travels. :D
Earlier this wonderful Wednesday, someone on Twitter linked me to Solitary Wanderer's post on building up one's own travel fund, which led me to thinking financially, so to speak, of the future and what to do once I begin earning. This then made me remember an article in the October 2011 issue of Reader's Digest that was entitled, "Investing 101", which aided me to seriously consider my financial plans when I get my hands on hard-earned moolah.
And what did I learn? Seven things. Such helpful articles to fire up this desire in me to save and invest! (Hoho, I sometimes wonder why I didn't push through with taking economics, what with the way I'm engrossed in money matters, hoho!)
I suppose that, just like one is supposed to efficiently manage time to avoid cramming, one is also supposed to learn the works of efficient money management. This one quote is pretty powerful and inspiring, giving hope to my generation that, yes, nothing is impossible if you only know how to handle what you start with and if you've got a plan! If children learned this bit of advice early on, I think the world would be a teeny bit better.
Simply put, your net worth is equal to your assets minus your liabilities, which helps you to gauge where you stand, financially-speaking. I learned that ideally, your personal net worth should have a positive outcome; if it comes out negative, your first step is to work to make your net worth a plus sign. Lessen your debts, your spending, increase your assets and whatnot. Once that's done and over with, you can start thinking about where to put your money, how many savings accounts to open and when you can do it, in a very concrete time frame.
It's always good to have a back-up. Set up a rainy day fund or an emergency fund besides your salary/monthly expenses account, and make sure to always set aside a portion of your salary for this fund. Make it grow, forget that you have it, and to be on the safe side, reach a figure that's at least six times that of your monthly expenses.
Take up the habit of saving early on, and you're good to go. "The younger you are when you begin, the more time you have to make your money grow." (Fogarty, 2011) There's nothing to lose - start now and read up on investing.
Start with knowing what you want to invest for, not what you want to invest in, says Mister Efren Cruz, so that you can establish your investment goals early on, when you want to accomplish them and know your action plan! :)
Knowledge is power. Knowledge is key. Gabriel Yap of Money Savvy says so. Learn the ropes of investing, and understand what you're getting into. "It helps you understand how much risk you are willing to take with your investment as well as identify opportunities." (Fogarty, 2011) Search the net, read up on company profiles and whatnot. Don't be too greedy or too afraid, but be careful and never go for leverage (i.e., according to Yap: when investors borrow money to make investments).
And last but not the least, save up. It's the most basic thing to begin with. Sacrifice a little, forego fancy restaurants and frequent nights out, as Solitary Wanderer puts it, and you'll be surprised with the turnout! And as Mark Twain also wisely says, "The secret to getting ahead is getting started." So get started.