Wednesday, October 19, 2005

Start Saving NOW!

Wallet Talk Wednesday

Save Save Save!

We do have a lot of our assets in real estate so we’ll be putting more emphasis in other vehicles to hold our liquid assets for the coming years (3) maybe. Let’s start with Savings account.

Interest rates are going up and so are the rates for savings account and CD/Time Deposits. If you are CONSERVATIVE about your money or want to keep your principal and don’t want to invest it in the stock market or other investment type vehicles, you can put your money in a savings account that gives decent returns, you can also put it in CDs and/or Time Deposit which should have higher rate but you won’t be able to use until the maturity date, you can pull it out early for emergencies but they will charge you with some fees for that.

We have an account with an online savings bank because of their rates, and its good to have money that you can pull out anytime for any emergency and get decent gains while your money is not being used. Our money in our savings and checking are what we consider as emergency money, it can take care of our bills for a few months in case of emergency such as accidents, layoffs, disasters, etc. etc.
At the same time we are restructuring and reviewing our retirement and investment portfolio with the cash that is coming in. Will talk about these next time.

For the beginning investors it’s also good to open up a CD/Time Deposit and put some money that you don’t need there while you think of where you’re going to invest it in the future. Whether business or market, by the time the maturity date hits you'll probably have a good idea what to do with the money :)

Just remember to:
1. ACT NOW!. DO IT NOW! Nothing happens if you just read this and think of doing it and not doing a thing.
2. PAY OFF YOUR HIGH INTEREST CREDIT CARD FIRST. If you have a credit card with a high interest rate pay it first before putting money in savings. Simple math, what’s the use of gaining 3%-4% if you have a credit card with a rate of 14%-20%. Use your credit cards for emergency situations ONLY, it’s BORROWED cash NOT YOUR CASH….or if you can leverage it for something good? 0% interest maybe? I've read people doing the 0% transfers, I haven't done it personally, normally when I get 0% rates I use it and pay it off before the last period where you loose the 0% and have to pay current interest.
3. Make sure the account is INSURED by the government. Normally Savings/CD’s/Time Deposits are insured to a certain amount. Most countries have the government insure accounts like this though.
4. Use a BIG, LARGE and INSTITUTIONAL BANK(s) if the accounts are not insured by the government. Though “normally” they have lower rates, this is because they are a lot more stable and have a larger capital where chances of going out of business is slim. Small banks normally have higher rates but if something bad happens to the bank you loose your mooolahhhh.
5. IF you NEED that money within a year or so its good to put the extra money you have into a savings account that have good interest. Put the extra that you won’t need for a long time in a CD/Time deposit which is also a good tool to use if you’re an impulsive spender. Putting it in a time deposit will make you think twice if you really need to spend the money and might end up helping you save for the future.

NO You don't NEED that IPOD NANO you're thinking of getting!
NO You don't NEED to go to that vacation, you just had your vacation last month, do it again 6 months from now!
NO You don't NEED that new Digital Camera right now, yours is working just fine, so what if it's 5 lbs.!
NO You don't NEED to go to that fancy restaurant this weekend. Is it your Birthday? Did you win an award? NO then why go? You can eat at home or somewhere less expensive. Go there when there's something to celebrate about.
NO You don't NEED that new car just because you want to impress the Jones', sheeat we can get a Mustang Cobra or a Corvette right now but we're not that crazy. Cars are not investments (well except for those very rare ones).
NO You don't NEED to go to a motel, just do it in the back seat of your car. (Joke!)

Whatever you're planning to spend this month that YOU DON'T NEED, save it and put it in a Savings account or some other investment. Hold off on buying what you want but NOT NEED for 2 months and you'll be surprised on how much you've saved. Buy them after 2 months maybe by this time you'll understand that there are some things that you don't NEED but just think you do.

Whatever and Wherever you are let's Start Saving and Investing Now! Prepare for our future, you probably already had a good run with living a hedonistic lifestyle right? Buying and Spending on things you think will make you happy? DID IT? Maybe, Maybe not.....

Save for your future and for you not to be a burden to your kids Biaotch. Your kids might not end up being financially wealthy so let's not be a drag on them when we retire OK.... Wouldn't that suck donkey balls ;)

Some Online Savings Bank:
Emigrant Direct 4.0% Savings as of 10/19/05
Presidential 4.12% Premier Savings as of 10/19/05
ING Direct 3.4% Savings as of 10/19/05



Blogger Saint Eroica said...

how i wish i have the discipline to save! ;)

8:23 AM  

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