Save More and Better

10 steps to build wealth

2013-04-26T19:44:00.000+02:00

When I think of how to build wealth, come to my mind the following words: consistency, common sense time and will.

Saving is not easy, it requires the commitment of everyone, needs to be systematic and be clear that only creates wealth over time (not overnight). On the other hand, depends only on yourself.

There are a number of steps, if met, would help many people to build wealth.

1. Spend less than you earn

It is the simplest rule of all. However, there are many people living beyond their means. Spending more than we earn, leads us to enter into debt and, once we go into debt, it is more difficult to save.

One tip that can help you to comply with this rule "does not work to pay that mortgage, loan, buy clothes / food, school expenses, dining out, holidays and then, if there is any money left, save" NO, first turn away an amount of my monthly income and then come the bills.

The best thing is to look like saving a percentage of your income. The amount you put it and adjust your monthly budget to cut spending and to save. It is important that you feel comfortable with the percentage of savings.

2. Sets the objectives you want to get

Everyone saves for a purpose (travel, canceling mortgage, education, retirement, etc ...). If we have a clear goal for which we save, we know two important things:

Amount we need to save: the more money you save the more money you get in the future
Time we have to save: The less time I have left to achieve the purpose for which I'm saving, the less I can save. The more time I have, the easier it is to design a savings plan
Profitability: the more time is left for our purposes, the lower the amount I have to save and lower the returns that have to require my investment. If I wait 55 years to save for retirement, the less time I have to create that wealth, the greater the amount I have to save, and the greater the return that I will have to require my investment.

The wealth is only created over time. It is impossible to have eg the € 100,000 overnight, unless we win the lottery.

3. Save money every month

After determining the purpose for which I save and determined the percentage that will save every month we can invest those savings on a regular basis.

Most important is the discipline , want to save and be aware that we do not save for others but for ourselves.

4. Invest the savings properly

After determining the amount that I save is time to invest what I'm saving. What products invest?

That depends on the purpose for which we are saving, time saving and we ourselves (what we call financial advisors risk profile, basically, is the stomach that I have to endure some fluctuations on our investments).

If we want to save properly, we should invest in current accounts , deposits or money market investment funds

5. Invest regularly

Investing on a regular basis allows us to benefit of compound interest, ie the return we get periodically by our investment, which in turn generates higher returns year after year.

6. Diversify

One of the basic rules of investing is not putting all your eggs in one basket. Interestingly, it is the rule that most investors fail to comply (use all their savings to buy a house, all their savings in Microsoft, all their savings in stock market).

One of the advantages of mutual funds is that they allow us to diversify our investment regardless of the amount we're saving

7. Remain calm

In the short term, no one knows what is going to do this or that action, so guess what you'll do the whole market thoughts about mission impossible. Investing on a regular basis, eliminating the possibility of being wrong at the time input and make our investments more stable and do an average cost, we bought the stock is expensive or cheap.

8. Start saving

Delaying the start time is an excuse (we all have different mortgage or expenses). The less time I have left to achieve the purpose for which I am saving, least I can save.

The earlier you begin, the more time you have, the more you save, and the easier it will create wealth.

5 years delaying the start of our savings can be assumed that within 20 years we will have 40,000$ less

9. Buying and selling in the stock market (trading) does not generate wealth

The evolution of short-term actions are unpredictable, so consistently hit our choices of purchase / sale is more like a gamble than an investment. Invest when prices are low and sell when they are high is what we should do all but, unfortunately, is impossible to know when the market is expensive and when it is cheap.

And if anyone knew what the stock market will do tomorrow do you share with others or shut up and invest it?

10. Be consistent

The only way to manage your money is wisely and do it consistently. The money grows in the long run if you manage properly and wisely.

Is internet banking safe?

2013-04-22T18:00:00.000+02:00

I haven't gone to a bank office in more than 10 years, which is about my time being online banking customer. Current accounts, deposits, stocks, mutual funds or even mortgage I have through online banking.

I've never had any problems neither I lacked money from my account neither my passwords have been stolen neither I received any suspicious mail. So is it safe internet banking? Well, if we follow the right tips it is as safe as traditional banking. There are risks, but no more than traditional banks.

Caution must be like when we get cash from an ATM, look there is nothing suspicious or cover with one hand while typing our secret number when shopping at a store, do not lose sight of our card.

My advice is to protect personal data, passwords and financial information as we do in our daily lives.

Recommendations on your computer

Updating the operating system : manufacturers publish updates to fix security problems discovered and prevent unwanted access or spread of virus.
Upgrade your browser, update your browser to the latest version available.
Install and update antivirus programs : It is essential to protect our computer against threats. Most of the antivirus can be updated over the Internet.
Do not store in the computer passwords, account numbers, card numbers or other confidential information.
Try not to use public computers (internet cafes, offices, airports, universities, etc ...) when accessing our internet bank. These computers may have some software to capture your personal data. If we have no choice but to use them, change the passwords from our personal computer as quickly as possible.

Recommendations with our passwords

Do not give out your passwords to anyone.
You will never request your password or operational security in full, only random positions. Nor will you be the passwords requested via email.
Change passwords frequently.
Do not use the option to remember the keys in your browser.
Avoid using passwords that are easily guessable (name, phone number, ID number, names of children, pets, place of residence, etc).
Use alphanumeric characters when creating your passwords. A combination of "random" numbers and letters is the best advice to design a password
Never write down your passwords on paper, file, mobile phone or in your wallet.
If your bank gives you the option to enter the password via a virtual keyboard , use it.
Do not provide your passwords to anyone, especially if requested via email. Delete the email, do not click any links and contact to your bank.

Example of incorrect password: peter74
Example of correct password: p24thu87

Recommendations surfing the bank's web

Always type the address of the bank in the browser: never access from links on other sites or from links in unfamiliar e-mails received.
Check that the address in your browser starts with https:// instead of http:// .
Check that there is a locker closed in your browser.
Disconnect always the session when you finish by clicking on the link.
Check the date and time of last connection . If you do not match our records, someone may be misusing our keys.

Email Recommendations

Email is one of the main ways used to commit online fraud.

A well-known fraud technique is phishing which means we received an email that looks like as I had been sent by our bank requiring personal data and personal passwords. The e-mail may contain a link that leads to a fake page, but that apparently is exactly equal to that of the bank.

They are usually easy to identify because they are written in somewhat technical language, or even misspelled. But sometimes, are difficult to identify because it often fooled by technical problems with our passwords, urgent need to update personal information, prizes, gifts or even tips to avoid fraud .

To avoid surprises, the best is:

Do not open spam.
Do not open emails from unknown senders.
Never send our passwords by e-mail.
Delete suspicious e-mails and click on any link and you may install a virus on your computer.

Recommendations to buy online

Only use secure servers to buy (remember, are those beginning with https:// ..).
Never send data from your credit card (number, expiration date) via email.
Do not give more data than necessary.
Buy only in recognized sites and with protection technology such as VeriSign, Mastercard Secure Code or PayPal.
Regularly check your card transactions.
If you have the slightest doubt that you have been suffered a fraud, cancel your card.
In case of suspicious transactions, claims to your bank.

How Living with Your Parents Makes You Rich

2013-04-18T00:01:00.000+02:00

Live With Your Parents, Buy A House By Movoto

How much do you know about finance?

2013-01-03T14:19:00.001+01:00

Each time financial surveys are published, I astonished at the results. These surveys are not new but, reading some books on economic history, they have left me amazed:

According to a 2007 survey in the United States:

Almost a third (29%) of respondents said they had no idea what the interest rate on your card was.

Another 30% said it was less than 10%, when in fact the vast majority of cards have interest rates well above 10 percent.

The 50% of respondents said that they had learn nothing or not too much about finance at university

A 2008 survey revealed that:

Two-thirds of Americans ( 66.6% ) do not understand how compound interest works

In a survey conducted by a group of graduate students from School of Business at the University of Buffalo:

Only 14% understood that equities would outperform bonds in more than 18 years.
The 59%t did not know the difference between a private retirement plan, the Social Security pension and a pension plan.

But it does not only happen in the U.S., in 2006, the British Financial Services Authority conducted a survey which revealed that:

One out of five respondents had no idea what would be the effect on the purchasing power of their savings if inflation rate were 5% and an interest rate were 3%.
One out of ten did not know which was the best discount for a TV which cost £ 250: if £30 or 10%.

And you, how much do you know about finance?

Who wants to be a millionaire?

2012-02-20T17:00:00.000+01:00

Normally, we associate to become a millionaire through the lottery. Few gambling games make you millionaire overnight and the odds are very small.

However, the possibility of reaching one million dollars ( $ 1,000,000) through our savings is not as unattainable as we think. A regular savings can become millionaires someday. Of course, depends on three things:

The age at which we start to save
The amount we save periodically
The return we get

This graph shows the monthly effort we should do if we are to $ 1,000,000 at age 65 depending on how we start to save:

* Average return on equity expected 7%

* Average return on deposits expected 3%

* The calculations do not take into account the inflation effect

Monthly savings needed to get 1 million dollars to 65 years depending on the age at which we start saving :

Get 1 million dollars is possible but involves a considerable effort, especially when we start to save.

If you are 25 years old , $ 381 monthly savings can be almost impossible, but think that if you started to work, you probably have few expenses. As time passes, the effort is reduced:

At 35 the same amount is equivalent to $ 268 / month from now,
At 45 amount to $ 189 / month from now
At 55 amount to $ 133 / month from now

* Estimated inflation of 3.5%

Another way to reduce the effort is whether we have saved a certain amount . For someone who had already saved $ 20,000. Savings per month that is needed to get 1 million euros would be:

Who Wants To Be A Millionaire?

How much have you lost in the stock market in 2011?

2012-01-03T17:22:00.000+01:00

I hope that little or even that you have won. We passed a year in which the stock has given us much more trouble than joy. Hopefully 2012 will be a quiet year (not think) as far as equity is concerned.

We show the evolution of the main stock indexes in 2011, separated by geographical areas.

United States

Dow Jones Performance in 2011: +5.53%
S & P 500 Performance in 2011: +0.43%
Nasdaq Comp. Performance in 2011: -1.80%

Europe

IBEX Profitability in 2011: -13.11%
DAX Performance in 2011: -14.69%
FTSE-100 Performance in 2011: -5.55%
Return EuroStoxx 50 in 2011: - 17.05%

Asia

Nikkei Performance in 2011: -17.34%
Hang Seng Performance in 2011: -19.97%

How to save monthly

2011-12-21T16:02:00.000+01:00

The other day I said a reader who had started working, I had no mortgage, living with his parents and was not able to save.

Another reader told me that he had two children, mortgage, paying the car was hardly reached to make ends meet. He said that now was not the time to think about saving.

Two cases are different but have the same result: I cannot save because I have so many expenses.

Most people can not save because they do not know their expenses and they do not know each amount they spend. Therefore, a first step would be put in writing, and record the expenses / total income of each concept.

INCOME : They usually do not vary much unless our income is variable or have significant investments that we provide high dividends. Therefore, as planned should match the estimate.
EXPENSES : They are divided in several categories, each of them, there are different concepts. Typical costs are facing a family / person. If you're not seeing any, can be included under "Other."

This will allow us to:

Identify all our expenses.
Rebalancing our expenses.
Adjust those overspending.

After including all income and expenses, may be given several cases:

CASE A. High loan

If a large portion of our revenues are to pay different loans (credit cards, personal loans, mortgage) is necessary to design an action plan to be able to eliminated these debts. Starting first on the cards and loans, as detailed here or here . In short, if we have different debts is time to fight againts them and design a plan to cancel our debts. Once done, we'll get to work with the cancellation of the mortgage that requires time and discipline .

CASE B. High expenditure on leisure

Maybe you'd have to ask yourself the level of life you lead. Certainly the money is to spend it, but someday you will have to save for a house, your retirement, etc, if you do not want to lower your standard of living when you reach those goals.

CASE C. High expenditure on day to day

Many of these are inescapable expenses (electricity, water, electricity) but with responsible consumption can be reduced. With regard to spending on mobile, landline, internet, satellite tv, etc. I recommend you to compare different companies and reduce consumption.

Analyze our costs is the starting point for making a plan and start saving in order to meet targets in the future.

Save or Spend

2011-12-15T18:56:00.000+01:00

People usually say that they do not save because the money is to spend and to be lived daily. I save because this way I will be able to spend more on and I do not want to borrow.

The differences between saving and not saving:

1. Mortgage

Savings: allows me to buy a home, I have to pay the mortgage costs and a major gateway that allows me to apply for a loan you can afford without relative difficulty (Euribor up or not). This is the most efficient way to buy a house and save € 60,000.

No saving: I have to get a high mortgage, because I barely saved to afford the down payment and I have saved practically nothing to give any money. Consequently, my mortgage fees will be higher and, therefore, to be more affected the interest rate will be worse.

2. Buy Car

Savings: I bought the car as explained with my savings. So I do not have to get a loan.

No savings: Since I have no money I ask for a personal loan, so my standard of living will decline in coming months to repay the loan. Besides, I have to pay a lot of interests for the loan. Finally I also bought a car, the difference is that I'll be drowned out by a loan.

3. Holidays

Savings: There is an easy way to go on holiday every year. I have to think about where I'd go in August next year, according to a budget that will more or less. If it costs, for example, $ 1,200 go on vacation, it would be enough to save $ 100 every month to reach that amount. Therefore the extra wage will be for the summer and would not go toward the holidays.

No savings: As I have not planned my vacation, at best, my salary is going to pay my holidays and in the worst cases, families who borrow to go on vacation or who pay by credit card, deferring the payments. Break is over and I am 12 months after repaying the loan or paying the amount of the credit card.

( Here you can see how to save € 2,000 reducing your debts and teach you here to fight your loans, credit cards and mortgages )

4. Retirement

Savings: I am aware that I have to save for my retirement and the sooner you do, the more wealth I get.

No savings: since money is for spending, I do not save for retirement, there will be time and I will do later, when retirement begins to worry me (I am 35 years, there are 30 years left!) . In addition, I have a mortgage now I am paying a personal loan. The problem is that when you decide to save (typically, you will begin when the retirement is so close), I will still have my mortgage, maybe I will have children and I would like to send them abroad to study and I will have just bought another car (with a loan, of course.).

Save 2,000 $ with your credit card

2011-11-03T16:07:00.000+01:00

Do you have debts with your credit cards? Have you begun to use the card recently and has increased your debt without realizing it? Do you always shop with your credit card and pay the monthly minimum? Think you could make better use of your credit cards?

If you answered "yes" to either question, I have to give you a bad and good news. The bad news is that "you have a problem," the good news is that " It is possible to manage debt and go slowly reducing it if we develop an appropriate plan . "

First, we must be aware that the money spent on credit is not free and that the interest we pay for using that credit is very high (around 20% APR). Second, you have to write to the head as follows: "NO COSTS OR BUY SOMETHING IF YOU DO NOT HAVE MONEY FOR IT" (the credit card is not your money).

Just use your credit card if you pay the total month-end.

I recently asked a friend who had three credit cards with a debit balance of 2,000 $ each, how he had come to that situation. He shrugged his shoulders and he said he only used his card to buy and pay the minimum on each (60 $) per month because it was more convenient.

Well, it's time to take the bull by the horns and design a plan to pay off our debts. Let's do the numbers:

1. Keeping current payments (60 $ / month), the result would be:

Assuming you do not spend anything more with the cards, the total interest paid would amount to 2,830.89 $ and would take 4 years and two months to pay the three cards.

2. Increasing on each card payments only at 20 $ / month, the result would be:

The total interest paid would amount to 1,826.58 $ and would take 2 years and 9 months to pay the three cards. It would save more than 1,000 $ .

3. Increasing the monthly payment doubled, the result is striking:

The total interest paid would amount to 1,088.22 $ and would take 1 year and 6 months to cancel all three scorecards. It would save more than 1,800 $.

Do not you think it's worth a little effort? Note, plus interest that we saved the most important thing is that we canceled the debt before, so we will be able to save money before.

How to save for contingencies

2011-10-10T22:03:00.000+02:00

Once we are clear that we need liquidity and safety, we will detail the different alternatives that exist to create this bag for emergencies:

1. Savings account: there are different savings accounts (especially online banks) with total-saving availability and instant liquidity and can have your money immediately. You can usually open from 1 $. Today, with interest rates near to 0%, the profitability that we will take our savings in the short term is small.

2. Deposit: the characteristics are very similar, only the term that our money has to be unavailable depends on the time we hire the deposit. Normally we can cancel the deposit in advance but at a lower pay.

3. Money market funds: they are investment funds that invest in financial assets in the short term money market rates such as Treasury bills, government bonds with repurchase agreements and commercial paper, ie in liquid assets, in order to facilitate liquidity shares immediately. For this reason they are called money funds. Assets are very safe and all financial institutions usually sell such funds. It should be emphasized, which is very important to find funds whose management comission is not very high, since the interest rates in Europe at 1,5 % and in USA at 0% , the product can not give us anything of profitability.

4. Current Account: If we do not want to have any trouble finding savings products, we can keep that short-term savings in a current account. Of course, NEVER save on the account where you tend to collect the payroll, pay mortgage and other expenses as we will be very tempted to touch the savings. Open another account at the bank and keep the money separate.

5. At home:another option is to keep our savings at home (as our grandparents did) or in a drawer.

I am in favor of the first option. And how do you organize your savings for contingencies? Do you know any other way to save?

What debts should you pay before

2011-09-05T17:12:00.001+02:00

One of the main objectives that everyone should keep in mind is to pay debts.

It is a worthwhile goal, but sometimes it can be difficult to know where to start.Without a plan, it is easy to get discouraged because the debts do not disappear overnight.

Knowing your debts is the first step to create a plan that will allow you to cancel before and save money in the process.

Therefore, you should ask your financial institution features a breakdown of your debts (outstanding amount, interest rate, cancellation fees, etc ...)

Pay off debt with highest interest rate first

Each debt has its corresponding interest rate, some higher than others

The first type of debt to be paid are the credit cards. Typically this is the kind of debt that charges a higher interest. Once your credit cards are paid, we can start looking for other debts, personal loans or car loans are the following alternatives.

Saving for the mortgage when we´ve already canceled the rest of the debts

The mortgage debt is often the greatest, but at the same time has the least interest rate. Being a big debt, your cancellation will take years. Better to pay all other debts first, increase our level of savings and our self-esteem to get eliminated loans. Before you cancel your mortgage, check your other debts have been paid.

Have you developed a debt settlement plan already?

What are you waiting for?

Fight against your loans

2011-07-29T14:54:00.000+02:00

Can you save if you have outstanding loans?

It is possible but preferably eliminate these debts because the interest we are paying are higher than we think (if you have a credit card with an outstanding balance of $ 2,000 and are paying every month for delayed payment $ 50 , the interest you pay the bank in one year is almost $ 400 )

Basically, we have three types of debts:

1. MORTGAGE: It is the most important and the most dificult debt to cancel. For all this, it's worth to do a lot of effort to snap out of it. For instance:

$ 250,000 mortgage over 30 years. Average interest rate over the life of a mortgage 4% (we are generous). The total interest paid to the bank are almost $ 180,000, so that the house cost us $ 430,000. Not worth making an effort not to pay so much interest?

2. PERSONAL LOANS: from loans to buy a car, going on loan to furnish the house, pay our wedding or even to go on holiday. Absurd, right?

3. CREDIT CARDS: money spent on credit without it. Expenditures are basically whims. Even more absurd, is not it?

The average mortgage is around $ 800 month, a personal loan to buy a car is $ 300 month and the monthly payment on a credit card could be $ 100 month. A total of $ 1200 each month to pay off debts, A lot of money or a slab?

What insights can we do about these three types of debt?

1. The mortgage is there and is what it is, but we can "fight" against it. Do you really want to return to the bank $ 180,000 in interests? Would you do something if I tell you you can save $ 50,000? And if they were $ 100,000?

2. Because we buy a car if you have no money. So need a car to be the first big spending ahead of the home purchase? How often do you change car? Why not do otherwise than other people? It is usual to buy the car, borrow and pay $ 300 month for five years. It would be better to save those $ 300 during all months and 5 years, and then with the money saved, bought the car.

3. How many cards do you have? Why use them? Why buy if you have no money to spend? A credit card should be for cases of extreme emergency. A tip: Do not carry it, be tempted to use it. Want to know how to design a repayment plan card? Sign up here to receive the best tips to save.

Break your credit card

2011-07-08T01:44:00.000+02:00

If we spend what we earn, we can never have an emergency savings fund.
Furthermore, if we spend more than we earn, then we will need to borrow money to finance the excess spending.
If these costs are recurrent we have to return the borrowed money in ever smaller amounts and longer term.

In each of these situations, creating a pool of money that allows us to save for contingencies can be impossible.

Therefore, before creating a short-term savings, we have to solve our problems with credit cards.

If you're in the situation (1) , I recommend you do a detailed analysis of your expenses and to differentiate those that are essential expenses (mortgage, school children, food, household supplies, etc ...) of those who do not are. Only by adjusting the latter, we can start saving.

It is true that not all months are going to spend the same and that there will be months that expenses exceed our revenues slightly (2) . The problem here is the easy to use (credit card) rather than creating an emergency fund.

The problem with credit cards is that they have a perverse effect on our finances, since any money you have our card (unless you have payment later this month) we will have to return with their interests (such interests vary depending on the card and the interest rates, but usually around 20% APR)

Imagine a person who has a debt in his credit card of $ 2400 and he pays $ 120 each month to cancel the debt, broadly speaking, the client will take more than 2 years to repay the loan and will pay more than 500 € in interest.

Could you create a short-term savings if you pay € 500? As this amount is what you save in the event that you had the savings and did not have to resort to credit card under the above conditions.

Have I convinced you to break your credit card or at least not have it at hand?

Requirements for our short-term savings

2011-06-14T13:19:00.002+02:00

When saving, it is not the same to have a contingency saving ot to have it for our retirement. What we look for our savings are entirely different things.

When saving in order to have some money to cover future contingencies or emergencies of any kind, when you invest those savings, we have to lay down two fundamental characteristics:

LIQUIDITY: we do not know when will appear a contingency or emergency, our money has to be fully available. Therefore, we can not save or deposits that compromise the availability of our money (or for 1 month or for 3 or for 1 year) nor in products that prevent us recover our investment when we want. The importance of profitability to look for this type of product is practically zero . It's useless to put this emergency savings to an account at 4% if I can not have that amount when that emergency occurs. What I use to have saved $ 6,000 at 4% if I damaged the machine I can not have that much and I have to buy with my credit card and put off buying an interest rate of 15%? Make calculations and see no worth.
SECURITY : "The more profitable the less safety, the more security the lower profitability" . This is a rule that always holds and that very few savers / investors understand. If you're just saving up for when these contingencies occur, what must prevail is that when you need to have the entire amount you've allocated for this purpose (no less amount). The search for higher returns in exchange for less security, no sense in the short-term savings.

REMEMBER: SAFETY AND LIQUIDITY FOR YOUR SHORT-TERM SAVINGS

Short-term savings

2011-06-06T16:31:00.002+02:00

The priority of a short-term savings is that we used to meet contingencies.

These are some of the contingencies to which a person has to face: a gift for a wedding we did not wait, buy a major appliance because we crashed, medical expenses, pour into our home, unexpected rise in car insurance , etc ...

Although generally short-term savings used to save these little unexpected, it is true that in the short term, any person may lose their jobs, causing a lack of income and saving our general plan is impossible to continue .

Therefore, it is advisable to have some money saved for a short period equivalent to 2 or 3 rolls. Why?

Because in the event of occurrence of any of these contingencies, we can continue saving for the medium and long term and will not affect our standard of living.

Take one example : Couple wins $ 2,200 / month, $ 1000 mortgage, car loan $ 300, sundries and entertainment $ 700, saving $ 200 (for long-term products).

What would happen to this couple if they have to buy a refrigerator because it had been damaged? Then they need about $ 800 to spend on the purchase. Here are several options:

Do not save this month and spend the 200 $ for the purchase and the rest buy through credit card and pay it in installments, making us into debt and pay interest, so for another three months, can not save long term.
Spend much less this month, which is theoretically impossible.
$ 700 Take our short-term savings (6000 $ = 2000 $ income X 3 months), keep spending the same or even long-term savings.

What do you think is the best decision?

You see, it is very easy to deal with these "little unexpected." Imagine a family member becomes unemployed. $1,100 would join the family at least several months.

If you have no money saved in the short term, how you pay the mortgage and car loan?, Where did you take and money to your monthly expenses? How to continue with your plan long-term savings?

The short-term savings is our contingency INSURANCE (from smallest to largest).

What do you think short-term savings? Do you think good or bad? Do you know another way to address these contingencies?

How to allocate savings

2011-06-01T16:23:00.003+02:00

Once we are clear that saving is important, it's time to get down to work and deliver savings. It is important to remember that the money we save is to spend at different times in our lives, which will allow us to save is to spend without reducing our standard of living.

The first step we must take is, if we have not already done so, save for unforeseen or unexpected expenses (eg car repair, purchase of appliances for damage, home repair, etc ...). It is what we call SHORT-TERM savings. Such savings will allow us to basically two things:

Quietness: having saved some money will allow us to "unconcerned" with these unforeseen circumstances and not to address them into debt.
Will allow us long-term savings without living a day.

The second step is to create another type of savings, MEDIUM-TERM SAVINGS. The purpose of this saving is to address those costs than expected for within 3 years or more (eg, change of car, study, travel, etc ...)

The third step is to create a LONG TERM SAVINGS. The purpose of this savings is primarily supplement our retirement (discussed later), pay off the mortgage or send our children to study in universities abroad.

Although they are numbered from short term to long term, the most important is the long-term savings and that we should begin to undertake as soon as possible, because time is on our side.

Discipline. The key to create wealth

2011-05-31T20:55:00.002+02:00

When I say discipline, I mean that the most important thing to save is to do consistently, so it is important that we consider as something aside each month / year for future expenses. It does not work to pay mortgage, loan, buying clothes / food, school expenses, dining out, vacations and then, if spare, save. NO, first turn away a lot of my monthly income and then come the bills.

The reason for doing it this way is because to be able to save, it needs to be regular and constant.

It's like when we learn a language, it is useless to study for 4 months if we leave then for another 6 months, two months to retake it again and to stop for 5 years.

For all these reasons, you can see the most important thing is discipline, want to save and be aware that we do not save for others but for ourselves.

Once we decided that we want to save, we can determine how much we save each month. When deciding how much to save, I recommend an amount that is comfortable for us, it is useless to want to save a lot per month if after all the months we are suffering.

The amount you save each month depends not on what we earn. There are people who save 200$ per month earning 1000$ per month and there are people who save 100 $ per month earning 3000$ per month. Logically, the person to save more, more will, but the important thing is that both people are saving.

Want is power. Do not worry about the amount, the important thing is to acquire a habit of saving.

Save Now or Never

2011-05-31T10:06:00.003+02:00

The purpose of this blog is clear: SAVE. Seems easy and everyone seems willing to do it but in the end, what we leave and we start to finish and not doing anything.

It is important to know that we can all save. We all have mortgages, children, car loan, incidentals, etc ... These are just excuses for not saving and go leaving it for later.

To think that when we get to pay the personal loan, start saving is more than just delaying our decision to save. I can not save because I have to pay the car loan and mortgage but I can go out to dinner or travel.

People who earn 1,000 $ think it's impossible to save and when they earn 1,500 $ or 2,000 $ will be time to start saving. I laugh, they never will because when they earn more, spend more.

We will detail strategies to save and tips to maximize those savings we get.

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