The First Step of Effective Investment Management: Starting A Saving Habit
Having a saving habit is the mother of all investment vehicles for your financial freedom. Savings are the building blocks and the foundation of your wealth creation system. It is where the investment journey begins. As they would said, a dollar saved is dollar earned.
Of any stage of investment process, the objective is not to earn the high interest from the savings accounts. It is rather to force yourself to accumulate savings regularly. This creates a reserved fund in case of unexpected or emergency events. Once you have enough capital (around 3 to 6 months of your regular household consumption, should you unable to pull in from your 9-to-5 job. Then we will move on to the next phase of investment process – stocks investment management.
There are many high yield/ rate savings accounts in the market and I use INGdirect. The key is not find the highest interests rate account as possible. Use the one that is convenient for you, but it’s recommended that you use an account segregated from your regular checking account.
Action Step:
Goal: To setup an automatic saving mechanism where your monthly savings will grow. Ideally, a minimum of 10% of your monthly income will automatically be transferred to this savings account every month. The key is to make this saving money process as automatic and painless as possible.
