How do you get the most out of your savings? I have come across a lot of people who are decent at savings, but then they get stuck in not knowing what the next step is. What I want to give you today is some of the key tips to help you move forward from here.
First off, well done because not everyone is great at saving and you deserve a pat on the back. If you’re solid on savings and you’re making some good progress on that side, well, what can I say but keep up the good work. It makes the other money strategies much easier.
The most important thing to do when you’re in this position is to start building momentum. You need to start getting that savings working hard for you. While cash is nice and safe, and it feels nice to have a nice bank account balance, it doesn’t really grow that much as time goes on especially when you factor in the rising cost of, say, a latte at your favorite café.
For example, if you had invested only $10 a day — that’s $3,650 a year over the last 10 years, that money would be worth about $50,000 today. If you’d started 10 years earlier, so 20 years total, you’d be looking at about $180,000 today. If you started 30 years earlier, it’d be about $540,000, and 40 years ago it would be around $1.1 million. Now, $10 a day is not a large sum of money, and I just need to disclaim this by saying that the past doesn’t predict the future. But this can start to show you the power of building momentum with your money.
The thing that holds most people back is fear — the fear of the unknown. It’s super common that if you don’t have a lot of experience with investing, you would feel anxious as to whether or not you’re doing the right thing. Just about anyone wouldn’t want to lose their hard-earned cash that you put in the work to build together. Solution — build your knowledge to start to get comfortable. Start to understand investments, understand the different strategies, figure out what’s right for you, and build a bit of a plan to make sure the investing fits so that you can build momentum.
But importantly, know that it’s fitting with all the other decisions and all the lifestyle-type spending and choices that you want to make over time. There’s a bit of work in there, but if you can do that, the results are really worth it because with just a small amount of money you can create some massive momentum in the future. Therefore, push aside that fear by building your knowledge, get started now, and start building your money momentum.