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How to double your money without doing anything with a savings fund
And before proceeding I would like to make a couple of considerations:
On the one hand, all I'll tell you this is no financial theory out books or academia, but something practical that personally apply and, therefore, I tell you first hand, knowingly.
On the other hand, it can be carried out by anyone of any age and economic level; however, many younger better the results be obtained because time plays in favor. The more money you have also, but this is a truism that applies to all 🙂.
That said,
What is a savings plan? What is a savings fund?
A savings plan is a strategy through which you go away periodically (once a month, for example) a certain amount of money that you do not touch and that accumulates over time.
Said thus a savings plan is simply the decision you make to save money to have it available at a given moment and future (when you retire, when your child goes to college, etc.)
The savings fund goes a step further and involves investing that paper money, as is accumulated in a financial product that will produce a certain return. Such performance, when produced, accumulates the primary (initial and periodically provided) to continue to produce more profitable, which in turn accumulates the main, and so on indefinitely or until the time you want to rescue.
As you may have guessed, the savings fund is based on the theory of compound or snowball interest, meaning that interest accrues produced the principal and produce new and higher interest. For this reason it said earlier that the younger the better start, the bigger the ball does because you have more time.
Important considerations plans and savings funds
First.- Even if you did not produce any profit, itgood you a savings plan because it forces you to save. Many times we do things, even if we want, if not force us. So Crearte the obligation, and even better automatically configure and then you say, it's best to make you save.
Second.- you going apuradísimo and do not get toends meet and you're not saving, because that's rich? Error. That's for those who wantsave because it can be possible, either more or less. Away what you can, albeit very little. If you can not 100 € a month away 50, if not 20, if not 10 but 5 ... Whatever you can. One trick if you can not almost nothing:contributes very little, albeit insignificant, and see incrementing proportionally, every month, every year ... as you can.
Three.- There is no obligation to maintain the fund over a period of time X, you can withdrawwhenever you want, but you concienciarte that this is a mechanism for longterm savings. Best experienced benefits can start from the tenth year approximately. Therefore, if a couple of yearsgoing to need the money may not be her best strategy for you. You've saved, recover the money, but will have perceived low profitability.
How to Hire a savings fund?
There are several ways to make a product of this type. Remember that it is saving money for you to produce a return that does not withdraw and that accumulates the main on.
traditional banking
This is the most classic of course, valid for the more traditional. You go to your bank life and say what you want to do. They will tell you they have and the products you choose.
Personally I see some drawbacks to this option:
- Fees and expenses of traditional banks are not few.
- They try to sell the product they want without having to necessarily match the one you want. If they reach their core orders that have to put a product X, for that you will endorse. What future do you complain and say you did not want? Yes, if what you wanted, what happens is that you do not remember 🙂.
- Finally, are not those who have more knowledge on the subject.
virtual platforms
The emergence of the digital world allows hiring online products of a wide variety. An example of such platform is Finizens , a portal that allows you to save on autopilot choosing under your investor profile.
In this case, the fees and expenses are lower, you save travel and paperwork and are specialists in this field exactly.
At the beginning of the post I was talking about you could double your money doing absolutely nothing (on autopilot). Well, so you see clearly I made a simulation tool that gives you the Finizens own.
Imagine you make an initial contribution of, say, € 2,000, a not exaggerated amount.
And let's say you contribute monthly € 100.
Well, at the end of 15 years, the expected profitability under normal conditions is set in a range of between 31,000 and 48,000 € approximately. If we take the average, you would have earned about 40,000 €.
The amount contributed during those 15 years (initial capital plus monthly contributions) are € 20,000 (2,000 + 1,200 initial year). 20,000 x 2 = 40,000. Duplicate. Bingo.
Investment Banking
The third assumption is unconventional but specializing in investment banking. An example, Rent 4 .
In this case, commissions and expenses are also discretitos and is very skilled. You can choose from a very wide range of products.
More things to consider when opening a fund or plan
First.- When deciding have to determine what kind of risk you are willing to face.
You can be a conservative investor (fixed income lover, the safest investments ...), an average investor (you like fixed and variable income in different percentages) or risky (equities).
The above simulation've established a pattern of average. Obviously, if you do not want to risk anything is hard to double up, and if you are very risky it is easy to get over it, but you can also lose, at least in some periods.
Second.- In virtually all previous assumptions can establish an order of automatic transfer paper. This will savehaving to manually transferring money and avoid temptations to do so (if that month is badyou). When you go to realize you say, "Go, I have caught me." It feels…
Three.- If you have children you can hire a product of this typetheir name. You can serve several purposes:
- Teach them what is saving and in the future, when they grow up and see what they have achieved something you did one day, become aware and see first hand the virtues of thrift.
- Have money available when they need it for something. Imagine that one day want to go to college, start a business , one franchise ... Well there's the money.
Four.- This type of savings and investment will come great (more than great, you is super cool) not only if you're young, as we have said before, but ifperceive fixedly monthly amounts from other sources. For example, if you have assets that you report set passive income (rental housing, for example) and perceive X monthly, you have to dedicate a great percentage of that X to your savings plan. Or you're going to notice. You get the idea that instead of 500 € rental cobras 400. Nor notes, you get used, I assure, afterthe years have ... Well imagine. I do not even I thought.
Five.- Andalso comes great for those that are concerned about the problem of pensions . You know, if Ipaid, if I do notpaid ... If you think the government can not do anything and then follow dwelling in your fairy tale, in your world of illusion and fantasy 🙂. If you think, and you head, and you're realistic, and your talent putto organize, because I already you begin.
And in fact I do not even think about it. Do you want me to tell what I do?
My personal case with the plans and savings funds
What do I talk and write so much? Do I apply and practice what I say?
Of course.
If you follow me know that I have some years old and I started young to create assets that provide me passive income. That means that for some time I receive every month amounts X on autopilot.
Well, that monthly X, as it somehow automatically transfer money to two funds that I have opened: one of the average, with an average return, and another a little more risky.
Note that I'm not talking, or in my case or this article, mutual funds or pension funds. We talk about savings funds , which are different things. A savings fund , for example, can invest in investment funds, but not necessarily not the same.
So I have two funds open with two initial monthly amounts X and X automatically transfer two amounts, one to each fund.
Money is automatically removed me, I find that I did, and after X time I imagine reversed as more money.
How about? For me it is leveraged to the utmost. Is investing money and achieve financial independence in a comfortable, simple, automatically, without you having to do practically nothing. It literally make money , like you have a machine. It is to have that money available when you need it , which gives you tranquility and freedom . Come on , all advantages. Not that you're going to become the new Kiyosaki , but after a few years old may find yourself in a very good financial position.
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