Last Updated on Monday, 7 June 2021 by Zhen Thing
Why should we save and invest? Referring to the article from The Edge Markets, you may view the original article here.
The concern made known in that article by BERNAMA was that the Bumiputera community lacks savings and investment habits and knowledge. Unfortunately, the statements in that article are also similar to the situation that the younger generation face nowadays. However, we can learn what we lack from that article and improve ourselves. Below are some of the highlighted contents from the article (simplified) 👇 :
“The community should inculcate savings and investment habits to protect themselves, particularly in the event of a financial emergency.”
Many people don’t know the importance of saving. Most of them only focus on earning money and not saving. Yet, saving for the future and emergency use cash is important and essential for a comfortable lifestyle.
“Due to the lack of this habit/culture, it will be difficult for the next generation to start a business because they will lack the required seed capital of their own to start a venture.”
“This habit has discouraged the next generation to become entrepreneurs, as they can only start a business on borrowed money or government grants.”
If we lack the mindset and habit to save and invest, we will max out our earnings every month. Without any savings, it’ll be impossible to start your own business. If we keep using borrowed money for our own business, house, car, credit cards, etc., we will forever be in debt, which is unhealthy and uncomfortable for our living.
These statements do not only apply to the Bumiputera community but also the younger generation these days. Here’s what you can learn to save more money 👇 :
1. Record Expenses and Budget
Firstly, you may start by tracking your fixed monthly expenses — house loan, car instalment, tuition fee, etc.
Next, you write down all other costs — groceries, fuel, household items, etc. It is best to record your expenses daily (when you spend) so that you won’t miss any.
Your expenses are your budget. With this, you will know how your expenses measure up to your income. So, you can plan accordingly to avoid over-spending. Even better, you can set aside some money for saving!
2. Set Your Goals
Think about what you want to save for — planning a vacation (for after the pandemic), getting married, buy a house/car or saving for retirement.
Then, figure out the amount you’ll need and how long you need to save it. Or, you can click on the button below to chat with us, and we’ll help you plan for your goals. 👋😉
3. Financial Management
Financial management comes in 2 forms — either you manage your investment by yourself (hands-on) or managed by professional fund managers.
Investing directly in the stock market, forex, etc., are hands-on investments. Since you are investing it by yourself, you will bear the risks and returns first-hand.
Under the management of professional fund managers, the risk is lower because many investors invest in a particular fund, and everyone bears the risk. Besides, these fund managers have decades of experience, which are considered investment experts.
“Even among those who have the means to invest, they lack the desire to study the daily performance of the stock market.”
“If one were to indulge in investment, especially in the stock market, one should have an interest in studying how the market performs.”
This statement from the article suggests that an individual needs to study the market when investing in stocks. It is 100% accurate. But, on the other hand, if you intend to invest but may not have the time to study and monitor the market. Fortunately, we have an excellent solution for you!
4. Pick the Right Tools
For long-term goals:
- Mutual funds (equities, bonds).
- Trust funds.
For short-term goals:
- Money market (e.g. Public e-Cash Deposit)
- Savings account.
- Fixed deposits (FD).
Before choosing the right tools, allow us to give you professional advice on your savings and investment. (With no obligations!) 💖
5. Saving Automatically
Choose how much and when to transfer your monthly savings into your preferred investment with Direct-Debit Investment (DDI) method. So, a portion of your wages goes directly into your savings every month. That way, you won’t forget to save monthly!
DDI method is optional, but is very practical and beneficial to everyone.
6. Watch it Grow!
Once you have started your investment and/or DDI, you can continue focusing on earning money while a part of your money works for you simultaneously! It is like killing two birds with one stone. 😲
Follow for investment & financial planning guide👇