My father opened a bank account for me, actually a saving account when I was 8. Well, my father was a banker, regardless it was a great gift, making me realize the importance of saving money. Over the years I learned how to save and grow money. I just want to share a bit of what I have learned over the years. So let’s see How to save and Grow Money.
How to save money?
Saving money is a habit. If you have a social safety net, you might not realize how important it is to have your own safety net, so that on a rainy day you can relax a bit and may be enjoy the rain.
I am not your financial coach, so I am not going to preach, how much or how you should save money. You can read Tony Robbin’s MONEY Master the Game: 7 Simple Steps to Financial Freedom” and “Unshakeable: Your Financial Freedom Playbook” to understand the importance of saving vs spending and how you can save. Personally, I always followe Warren Buffet’s advise. I save a portion from paycheck, does not matter how big or small my paycheck was or is and then I spent the rest. Read the books and develop your own strategy.
How to save and Grow Money?
Now that you have developed a strategy of saving money, you need another one to grow your money. And how do you grow your money?
With bank CD rates going down and the interest rate you earn on savings from bank, keeping your money your bank means allowing inflation eat away your purchasing power.
So what do you do? Stock and bonds can be your friend if you know how to play the game. And the books I recommended will tell you why you have to be in it to win it.
But I am sure you have questions.
Where should you invest? How to maximize your returns?
Or, what should be your portfolio allocation based on your investment horizon and risk tolerance?
Low Cost brokerage and robo- advisers are life savers to keep overall cost low. And how do the robo advisers keep the cost low?
They have automated the asset allocation part and they invest your money in index fund. Why index fund or what is so good about the index funds? To know you can read unshakable by Tony Robbins.
Low or Zero Cost brokerages and wealth managers
IF you want to buy individual stocks or REITS or MLPS use Robinhood app, and I have reviewed it here, this is zero cost brokerage account. For more details please check here.
Now, my most favorite is Wealth Simple – because for first $5000 investment there is no management fee. So you can automate your saving with WealthSimple and forget about it. May be it will be your emergency fund. Based on your risk profile, WEalthsimple will allow you to choose portfolio and type of funds you want to invest your money in.
Nest is Betterment. They have earned a reputation for being low cost and they provider you a great comprehensive view for your portfolio. Moreover, you can rollover your IRA or 401K or start a new one with them. Since they are low cost you save a ton of money in fees over the lifetime. And if you need help they have people who can help you out too.
Just to recap, automate your savings ( you can use Wealthsimple or BetterMent to do that) and keep your fees to minimum , hence I use RobinHood, because I do not pay any brokerage fee while I purchase stocks.
I hope you have read MONEY Master the Game: 7 Simple Steps to Financial Freedom and Unshakeable: Your Financial Freedom Playbook and know why index funds are better. So just get in the game, because you have to be in it to win it 🙂
I hope you have better idea on How to save and Grow Money it, but if you have any questions, feel free to reach out to me. I would be more than happy to help you out. And thanks for your time