GET RICH SLOW OR GET POOR FAST
Its the Ambivert Nerd
Today we are all about the money. It drives us crazy right? Who doesn't want to get rich? Some say money is the root of all evil while others say, its the cause of happiness. Well, whose side are you on?Let me know.
The essential topic today is SAVINGS.
I want to take a case example of an average Kenyan who is earning a net salary of Ksh. 30,000. How will you be able to live within your means and still enjoy life. Remember, as much as; am big on saving, I am also big on enjoying what life has to offer. Life is for the living and once you die well, someone might as well enjoy your money.
Senator Elizabeth Warren popularized the so-called "50/20/30 budget rule" in her book, All Your Worth: The Ultimate Lifetime Money Plan. Whereby, 50% covers the Necessities in your day today life,
30% for discretionary items and 20% for savings.
Today we basically want to just focus on savings. The basic rule of savings is save at LEAST 20% of your income. Before you think of anything else please make sure you save before you spend a coin.
However, there are two factors that can cause this percentage to increase. That is; depending on your savings goal. As an individual, one is allowed to reduce amounts spent on discrepancies and necessities and gear them to savings. Also, if you earn quite a lumpsum you can increase this to the percentage you deem fit. As of now am talking to the Average Income Earner.
SAVING WITH AND FOR A PURPOSE.
Every individual has their own intent to save and if you don't have one just save you may never know when an opportunity arises.
Therefore, I will talk on the quite obvious reasons for saving ie) for future investments and for emergencies.
As an aspiring finance consultant, in my opinion, one mistake people do while saving is just putting their savings in the bank. One; there is no time value for money and second its quite easily accessible. You know what this ,means, we are all humans, you pass by a store and end up impulse buying. I would encourage, if you have no use of the savings at that very moment, try putting the money in avenues that earn even the little bit of interest. The minimal risky ventures ie) putting your money in saccos, funds etc.
This is not a finance class so before it gets long and boring, I believe my insights have been passed along. Care to share your views.
Join me next time in my evolving journey as we get to on Investment avenues.
Enjoy,
Irene Nganga.
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