Maximizing your Wealth with a Regular Investment Savings Plan
The long-term goal for most people is achieving financial freedom and stability; saving money is one of the first steps to achieving that goal. But saving money can be hard for most people we are constantly tempted by the media and marketing to spend. That’s why a regular investment savings plan is useful in ensuring that we are disciplined in achieving our financial goals.
What a regular investment savings plan does is that it helps you to set aside money on a consistent basis. Be it weekly, monthly or quarterly. The most important thing to remember is that you have to be disciplined for this to work. If you set up automatic contributions to your account, you can avoid the temptation of spending too much or your salary even before you have contributed to your savings plan. This will at least guarantee that a certain amount of money is going into your savings account every week, every month, or every quarter.
The rule of thumb is to set aside at least 20% of your salary each month to be able to have enough for your retirement. Of course, if you are disciplined enough to direct more salary into your savings account, the faster you will reach your financial goals. The flexibility offered by a regular investment savings plan allows you to customize how much or how little you can contribute each month. Allowing you to cater your savings plan to your specific needs and financial ability.
The advantage of a regular savings plan is the compound interest it can accumulate over time. Compound interest is simply the interest you earn on both the initial deposit and the interest that accumulated from previous deposits. That means the longer you leave your money in the account, the more it will grow over time and give you a much larger amount of money compared to your initial investment.
In this way, you can guarantee that your money can keep up with inflation and won’t lose its value in a regular savings account with a low-interest rate. Inflation is the silent killer in the finance industry that can slowly erode your savings even if you’re not spending any money.
There’s very little risk in using a regular investment savings plan because you have a choice of withdrawing the money at any time after the minimum period.
The key to saving money is to start now. It doesn’t matter how little you can save each month as long as you are saving. And with a little discipline and consistency, you’ll be amazed at how much you have accumulated in a few years.
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