Financial Freedom Within Your Reach

Saving money is not enough to gain financial freedom. No matter how good you are in saving pennies or master in budgeting expenses, if you don’t invest, you will still be in the rat race world. Investing is the way to financial freedom. Being frugal can help you become rich but you should invest too.

We all work to earn money, but we can not work forever, so who will give us money if the time comes that we can’t work anymore? You will get tired and old, so there must be a replacement for that work or job. The good thing is you will reach your financial freedom wherein you do not have to work anymore. Now the thing that you should do is to plant early. I meant plant or invest early.

You can still earn money or more if you invest early. So without further ado here are my eight ways to invest your savings from budgeting:

1. Avoid debts. As much as possible say no to debts. Don’t use your credit card or business credit card if you have one to pay for anything which are not needed but wants only. If you have debts, start paying now and be free from it.

2. Invest in Bonds. Bonds are issued by governments and large corporations to raise funds for their specific projects. Bonds offer a fixed amount of interest for a fixed period of time (at least 5 years). At maturity date, the exact amount of the bond will be repaid to you and the interest payment stops. The bonds are usually higher that the rates of by the banks. If you don’t need your savings for a long time, it is better to invest it in the bonds. It gives you bigger return without too much risk. If you are in your retiring stage, it is better to invest in bond.

3. Bank Deposits. Banks offer many types of services like time deposits, savings account, current account, ATM and etc.
A. Time deposits offer higher interest but with holding period like five years or one year to mature.
B. Savings account is where you put your money if you need it for emergency since you can withdraw it any time. Use this as if your personal wallet and you need the money within 3 month. The interest is very low like 2 percent with 20% of the interest going to tax deduction.
C. Current account or checking account is also offered by the bank. This is very important if you are into business since you can issue check anytime. Be careful to put money in your account if you issue a check, you might be sued if the check will bounce. Shop around to look for best deals if you are looking for a best option.

4. ATM is another service of the bank where you can withdraw money anytime and anywhere. It is like savings or current account only it is card and you can withdraw electronically in the ATM machines. ATM stands for Automatic Teller Machine. Minimize using ATM as it will charge you per transaction. Banks offer different services and rates, so shop around.

4. Pension Plans. There are lots of companies who offer these investments like Philam Plans and Sun Life Plans. These are predetermining values in the future so if you invest $5,000 which is payable for 5 years depending in your payment schemes, you will be paid $ 10,000 after 10 years. This is just an example to illustrate this investment. The advantage of this investment is you are insured up to the paying periods. The value will depend on how much you invest. By the way if you are not paying your SSS or GSIS pay them first before buying Pension Plans as they are offered by the government. All countries offer this kind of investment with other names. Some companies where you are working might offer this kind of service, avail it.

5. Start a business. There are lots of businesses to start with. You just need to find your niche. You need to start a business where your passion or discipline is. It will not become a burden to you as you do the business since you love what you are doing. For example if you are into food catering then I expect you to love cooking or at least you love serving people and you are friendly. You don’t need to start big. Small capital will do, as you master the business, this the time that you need to expand it to earn more money. This is to make it sure that if the business will not successful then only small amount of money will lose.

6. Real Estate. Donald Trump is one of the most successful in this field. Buying properties like residential lot, farm or commercial lot is an example of real estate. The advantage of real estate is you can leverage your money or investment. According to survey real estate profit is proportion to stuck market. This investment is tangible so you will not be afraid as you will see it. Zoning here is the basic key for profit. Condos and houses are also good investment as long as you earn money out of rentals. As you earn the value of your properties goes up too. My advice is to understand fully the in and out of real estate as this business is very critical too like you should know about land or property title and etc. If you have a house you eliminate the rental charge which you are paying every month.

7. Stock Market. This investment is buying a share to a certain company like for example you buy a share from Pepsi Cola so you become a co owner of it. As the company earns profit, you too will earn in the proportion of you investment related to the total profit. Before investing in this investment you should know the company where you want to buy a share. Know the business and the people behind the business. Are they trustworthy and capable to manage the business? You need also to learn how to invest. Your money will earn big than other investment but the most risky too. You will earn but there is a big chance to lose too. The higher the risk, the better the return. Invest here where you can afford to lose your money.

8. Mutual Funds. This investment is less risky than the stock as it is invested to many companies so the risk is divided or shared to different companies. Like if there five companies where your money is invested then if one of the companies will not perform will then still there are 4 to pull the loses. When you buy shares in Mutual Fund, they will invest it together with the other investors’ money to different companies. There are good manager out there who will invest your money. Here with small amount of money you can have an investment. You don’t need to study the investment; just leave it to the expert. No need to learn as stock market.

These are the common investments, just find time to learn about them. Most of them are called passive investment for your financial freedom in the future.

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