Good Morning Green Panda Friends. I hope you all had a lovely hot weekend. As we are young we definitely have the luxury of saving our money for the long term. The key to long term investing is to start saving our money now. Starting to save money at a young age and investing regularly over the long term allows us to take advantage of the compound interest effect, and watch our money grow. However, saving money definitely takes time and the slow process can sometimes be discouraging; we just have to remember to hang in there for the long term.
Get Rich Quick Schemes Don’t Work
If it sounds too good to be true then the odds are that it probably is. Get rich quick plans are not brilliant ideas, they are schemes to steal peoples money. Almost every day I receive a spam email or see a pop up while I am surfing the internet about some type of get rich quick scheme. Everyone wants me to click a link, send an email, or visit a website to learn how to make thousands of dollars in only a couple of hours.
Some of the latest Get Rich Quick Schemes that I have seen around the web include having a large amount of money deposited into my bank account, winning the European lottery, as well as working from home and earning over $20,000 per month. The catch to get rich quick schemes is that they promise quick riches after we pay a fee.
The Only Way to Build Savings is to Start Saving Your Money Now
The only tried and truly tested way to build our savings is to start saving our money now and save regularly. Even as little as $50 per month can add up to a lot of money over time. Even if we can only afford to save $10, it is better than not saving any money at all.
The easiest way to save regularly is through an Automatic Savings Plan. This allows us to automatically transfer a fixed amount of money from our checking account to our savings account on a regular weekly, biweekly, or monthly basis. It is also a good idea to invest some or all of any extra money into our savings accounts. Extra money includes birthday gifts, graduation gifts, income tax refunds, as well as quarterly and annual employee bonuses.
Savings accounts and High Interest Savings account are liquid investments that offer security but do not offer a high rate of return. If we are investing for a period of more than a couple of years we should definitely consider different investment options.
Investment Options to Watch Our Money Grow
Fixed Income options such as Mortgage Backed Securities and Bond Mutual Funds are a good investment option if our investment time frame is between 2 to 5 years. If we are investing for more than 5 years Balanced or Equity Mutual Funds and ETFs are smart investment options.
As we get comfortable with the daily fluctuations in the value of our investment accounts and we learn more about the risks of investing, we can start to chose more sophisticated (and higher risk) investment options. High risk investment options include, but are not limited to, individual Stocks and Sector Mutual Funds which invest in a particular country or commodity.
Here are Previous Posts in the Investing Our Money in Our Twenties series:
Traditional Savings Accounts Are Boring!
You are only 20. So take some risk!
Photo by Images of Money
Tahnya is 30 years old and lives in Montreal Quebec. She graduated in 2005 from Concordia University, and she currently works for a major International Financial Institution. She recently launched http://www.mediamadam.ca/. You can follow her on Twitter @TahnyaP.