How to Grow Your Money/savings

It can be hard to determine exactly which financial products that suit your budget and investment best as there’re wealth of those products being flooded on our market these days.

Before investing in any financial products or items, you should consider what you can afford without losing much. Though growing money/savings are possible, it might always not to be easy to attain. Therefore setting an appropriate goal is essential to avoid unnecessary loss. You may learn from failure by keeping 10 -15% of your savings on medium to high-risk investments.

Sale representatives always approach you with the positive side of the financial products that they represent for. So, you should make sure that you always get advice from accredited financial professionals. It’s always better to shop around before investing in any financial products.

Prior to investment, you should check what fees/charges/taxes that will be incurred for managing your investment. Think twice if retrieving your principal/premium or chasing out profits is difficult for you to reap.

Get connected with financial professionals to work out the future value of your retirement payout, child’s education, disease’s compensation, old age’s payout and etc. so that you know how to achieve your financial goal in the utmost initiative.

If you prefer for a few years/ short-term investment, then low-risk investment scheme suits you best. The reason is that low-risk options don’t run you risk of losing much though you might only get a lower return. Nevertheless, if you plan to invest for a longer period, say 20 to 30 years (long-term investment), then you should make your money/ savings growing by investing in a more high risk scheme. Now, let’s have a look on certain financial products flooded on the market to decide which one suits your budget best. Each of them may have pros and cons, and thus it’ll up to you to make a wiser choice so that you can see your money/savings growing without losing everything.

Medium- and High Risk Investments

Unit Trusts manage their investments in bonds and stocks in a professional manner. They’re designed particularly for the medium-to long term investments, in which the investment nature is dwelled notably to be three to five years or may even longer. It’s advisable to invest in Unit Trusts when the economic is down as you’ll get a higher return when the economy is up again. Of course, you can’t expect a quick return in a short period. The caveats apply to certain investment type as some Unit Trusts rely upon bond and stock earnings. That means they’ll sometimes focus on particular areas of business or types of risk. However, the good thing of Unit Trusts is that they help investors to pool money in a more organized and systematic manner.

Stocks refer to shares of ownership. Stock prices are not stable but they fluctuate over time. That means they’ll go up and down within minutes. It’s hard to determine your earnings over the long-term period as stock investments do not guarantee your future earnings. When you buy shares or stocks, you’re actually invested your money on a claim of corporate earnings and assets. When economy is down, the shares or stocks you bought will lose value. You’ll only cash in by selling your counters at a profit when the economical performance is good. In a great year, you may become a millionaire if you keep bulk of shares or stocks. This is due to that the selling price is many times higher than the buying price you paid and thus you can trade by selling higher price to have a promising return. However, in the worse case, when the companies close down or go bankrupt, the shares or stocks are worthless. Your shares or stocks will turn into “no value blank papers”.  

Property is a type of investment that people hope for a great return in a long-term period. Property here always includes lands, houses, buildings, premises, and etc. which are actually marketed as a low-risk and high-yield investment. Nevertheless, property markets are changeable. The value of the house that you own might drop due to the global economic crisis. If you’re unable to search for tenants whose rental cover your upkeep/maintenance costs and tax, paying mortgage installment can be hard and tough. This is the case in an economic crisis in which your house is vacant but you still have to bear for a higher mortgage payment. However, if you manage to sell off your property at a profit (particularly when economy is good), then you’ll gain a good return.

Mix and Match Investments

Mix-and match investment is one of the best strategies to minimize your risk while maximizing your opportunities to have a better return. Sometimes, this investment scheme is also called “a diversified portfolio”. In this investment strategy, you plan to allocate small sums from your savings in a special saving account. When you’ve double the amount require for a Fixed Deposit, just keep half of your money in cash, but get the extra bit of interest for the other half. Its percentage may appear small to you, but it gets to add up over time.

Low Risk Investments

Bonds are usually issued by the governments or large/ multinational companies that offer a set rate of interest within a fixed length of time. You’ll get back your money (and some extra as well) you loaned at the end of the period unless the conglomerate goes bankrupt or there’s a revolution. Normally, interest on bonds issued by state or federal government is exempted from the tax. The interest payments are determined by traders who decide if they want to sell, buy or hold bonds. The interest payments may also take corporate governance and interest-rate trends into consideration, and thereby setting a discount or a premium to their nominal value. The value of your fixed interest payments will be eroded when the economy is in inflation. Therefore, it’s always better to look for a short-and medium-term bonds, say 3 to 10 years for a steady return.

Education plan are life insurance products, in which you’re required to pay fixed premiums on a regular basis so that you can collect returns every year by withdrawing funds when your child reaches a required age as stated in the scheme. This investment adds on the value over time, but the drawback is that you’ll not be benefited if you’re unable to pay the premium within the fixed period.

Insurance plans are those investments that offer promising returns to their investors. Some policies may include life, disease, old age, retirement and health insurance products. Under these investments, you’re required to pay fixed premium on a regular basis within the fixed period. Just like an education plan, you’ll have high penalties if you fail to pay the premium within the fixed period. However, the plus point of these plans includes waivers for selected premiums in case something emergency, unfortunate or unexpected happen to you. Some policies may even offer a tax deduction which seems to be another bigger advantage.

Fix Deposits (FD) are very secure and reliable investments as you won’t lose your money/ savings unless the bank goes bankrupt. The percentage of the interest payment is based upon how much and how long you keep your money/ savings under an FD. A typical FD will earn you a small return at a regular rate.

Long-term Low Risk Investments

The other “non-monetary” investments are those you don’t have to invest your money/ savings to gain the returns. Instead, you invest your knowledge, experience, opinion, idea and time to generate quality manuscripts to earn the return. The payments are paid on the basis of page views, quantity and quality of the manuscripts you created, online advertisements and banners. Here, you don’t run the risk of losing everything unless the company goes bust. Of course, you won’t get rich faster but the return adds in over time. More details on these investments have been documented here.

Final Remark

When you’ve certain amount of money in the bank or in hand, plan and review your investment while buying any financial products. It’s very important for you to decide the nature/portfolio of investment that suits your time limit, value of money, budget as well as investment style. You can lessen the risk of loss when you allocate more time to think before investing in your desired financial products. Or else, you just go for a more secure investment – long-term low risk investments that don’t require you to invest your “money” in a monetary term. Instead, you just need to invest your “energy”, “expertise”, “intelligence” and “time” to qualify for more income and passive income as well.