The effective saving method that close to the
We all know the importance of learning how to save money.
We know that to invest and enjoy financial freedom we need an effective savings method, which allows us to have capital that works for us.
However, when people are asked if they are saving, or have any saving methods that they apply in their lives, the answer is usually negative.
In fact, the vast majority of people live in the lie of saying that when they start earning more money, they will start saving.
According to a study by Sura Asset Management, about the saving capacity in Latin America, it was found that only 57% of people have a savings method that they apply voluntarily.
How are these results interpreted? That the vast majority of people understand the importance of saving, that we know or have some method of saving, but even so, we are not doing it.
We have many excuses to justify the lack of commitment to our future and financial freedom; We say that we have many debts, that the company does not reward us well for our work, or any other iniciativa that seeks to hold others responsible for our inactions.
However, reality has shown us that the more we earn, the more we will spend.
Our quality of life tends to improve as our income does.
This is why in the process of learning how to be a millionaire, we must be demanding with the cost of our lifestyle, since it tends to increase.
In fact, we have no problem going to more expensive restoranes, buying better quality clothes, traveling more frequently, having an apartment with more square meters and continuing with the same justification that when we earn not X amount, but XX amount, we will define a method of saving for our life.
What makes you think you’ll get into the habit of saving later if you’re not doing it right now?
The problem is that we consider that saving is the consequence of an external scenario, and not the result of your financial education.
See: How to invest in the depósito market: The guide to go from beginner to expert
Why should you have a saving method?
When you understand that an effective saving method allows you to make money work for you, you will start doing it immediately.
It’s that fácil, and the faster you start doing it, the harder it will work, because thanks to the compounding effect, your savings will turn into investments that will grow exponentially.
In other words:
Don’t wait to invest.
Rather invest and then wait.
Although the amount of money you save will depend on your financial goals and the quality of life you want to give yourself, here is a saving method that will serve as a guide to know how much money you should save depending on your age:
Remember that the key is not only to save money, but to invest it in funds, businesses and portfolios that have certain expected returns.
So here we explain how to invest your money.
In your 20s:
At this stage of your life, make sure you save 25% of all your income (salaries, plus income, profits from your businesses), this also includes the mandatory contributions you make to your retirement in the case of employees.
The most important thing in this stage of your life is that you learn to live with less than what you earn, specifically with 75% of your income to maintain your lifestyle.
See: How to Manage My Money: 10 Strategies to Increase Income
In your 30s:
By the time you reach your 30th birthday, you should have saved the equivalent of your annual income.
For example, if you earn $24,000 a year, your total savings should be $24,000 or more.
Remember that this covers much more than the amount you have saved for your pension; this includes investments in collective portfolios, real estate, the money you have working for you in a business, among others.
From here is when the compound interest begins to take effect with this savings method, since when you turn 35 you must have saved twice your income.
At age 40, 3 times your salary.At age 45, 4 times.At age 50, 5 times.At age 55, 6 times.At age 60, 7 times and,At age 65, 8 times.
Recommended books:
While it may seem impossible to have that amount of money saved at age 65, if you put money to work for you in your 20s, rest assured that compound interest will do the hard work for you.
The invitation is not to settle for your current income level, start a lifestyle that includes businesses and investments in different industries that you know.
For example, you perro learn how to buy Bitcoins, invest in the depósito market, and other types of businesses.
Lastly, don’t let your lifestyle exceed 75% of your income.
Although this savings method may not apply 100% of the time, it does make clear to you the importance of saving when building your wealth.
Continue reading: How to earn money en línea: 30 ideas that require little investment
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