Paul Skene


Do you feel hopeless or overwhelmed about creating a nest egg for your future or retirement days? Do you have a cold feeling that such a nest egg is just for the rich? The old saying that “it takes money to make money” is simply not true. For some people, it’s a good excuse not to start a savings program at all or maybe you’re someone that thinks saving money affects your “fun time.” It doesn’t have to be that way at all. Let’s look at the four steps to creating a nest egg.

The first step to creating a nest egg is to start saving early in life and also to save regularly. Most people find saving money to be very difficult, especially when they only receive minimum wage. This is why having a budget and being familiar with your household expenditure will help. You might be spending money on some items that you really don’t need. For instance, you might like to have the $4.89 café latte, but you don’t actually need it. If you order this drink four times in a week, you would have spent $19.56 per week, which equals $78.24 monthly or $938.88 yearly. That’s actually a lot of money you could have saved or probably invest it in something worthwhile.

The second step is to be familiar with the language of the financial world. This language can be learnt through different sources, such as CDs, books, your local bank, the Internet and financial companies.

The third step is saving automatically. Most companies offer automatic withdrawal from your paycheck to your savings account or source of saving. You can instruct your employer to automatically withdraw money to your money market account, savings account, retirement funds, etc. This is one of the most convenient ways to save money. You don’t even have to think about it, it just happens automatically. If your employer offers a retirement plan like pension plans, you should actually take advantage of these saving plans also, especially if your employer gives a particular percentage out of your monthly savings.

If there is no provision for an automatic savings plan through work, you should start an automatic savings plan on your own. Start by placing your budget on 90 percent of your monthly income. If your net income per month is $1,000.00, a 10 percent savings will be $100.00. Within a year, you would have saved $1200.00 with interest. If you can save only $50.00 per month, that’s equally a good idea. Just start saving something.

The fourth step is to learn the type of investment that you are comfortable with. Are you conservative? Are you a risk taker? Would you rather have security? You need to consider your family, your age, your job security and your health. Most financial companies offer an easy platform to evaluate the type of investor you are. Generally, an older individual won’t want to risk any of their money.

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