What Is The Best And Safest Thing To Do With Your Money?

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What is the best and safest thing to do for you to do with your money so that it will do you the most good? In this new environment where even banks with long histories are failing and where change seems to be the only constant, just putting your money in the bank and having a stock portfolio does not seem adequate any more. In fact, at times, it does not even feel safe to put your money in the bank.

So, in this new world, what can we do with our money to best serve our wants and needs, and also to have enough to see us through our retirement years? The following are some of the best ways that you can spend your money, and ensure that you can make more of it:


Invest In Yourself
Sometimes, the best asset you have is yourself. And you are more of an asset that you realize.

Spend some money and take up a course to upgrade yourself, and maybe in a subject that is completely out of character for you - who knows, you may find a talent you never you had. Education is never wasted and it may just open up new perspectives on what you are involved in now.


Diversify
If you are putting your money in the bank, remember to split it between different banks.

And if you are investing your money, don't just concentrate on one type of instrument. Find a few instruments with relatively low and reasonable returns, and split your money between them.


Eliminate Debt
Debt is bad. If you have any debt, whether it's credit card, or mortgage, or others, do something about it.

There are many sites and articles on how to eliminate debt but you must know that not getting out of debt is costing you money. The interest that you pay on your loan, although it might not seem like much on a monthly basis, is really costing you a lot of money in the long run.

As an example, assume you borrow $100,000 from the bank at an interest rate of 5% with a repayment period of 30 years. I did a simple spreadsheet calculation and your monthly premium should come up to about $550.

In the first month, of the $550 monthly payment, $414 actually goes to paying the interest on the loan and only $136 goes to paying the principal. In other words, in the first month, after paying $550 to the bank, the amount that you owe the bank goes down by only $136.

The example is at a minimal interest rate of 5%. The credit card companies charges you double digit interest rates!

I say again - debt is bad. If you are in debt, do something about it.

Somebody should tell the US government that, but that is the subject of another hub. ;)


Save Money
Get rid of the unnecessary extras. If you are in the habit of going for expensive dinners, I'm sure you can find a cheaper place where the food and service is just as good. Or you can just go less often.

A good way is to keep a daily diary of how much you spend. After a few weeks, you might be surprised to find out where your money is actually going.


Start A Online Business
An online business is a great asset in today's uncertain world. It acts to supplement your income, and can potentially become your main source of income should you lose your job. Advantages of such businesses include:

  • Low startup cost.
  • Low running cost.
  • Does not need any inventory.
  • Can be run from your garage in your spare time.

Many people try to start such businesses totally on their own time, talent and resources, and find themselves overwhelmed. My advice is to outsource small tasks that you are not good at, or will take you too long to learn, or is simply too time consuming. As the owner of a business, your job is to be as productive as you can be, and spending some money to free up your time might be the best investment you have even made.


Conclusion
The world is in the midst of unprecedented change. What used to work well in the old days, like good skills, a good job, good spending and saving habits, are no longer a guarantee of financial security in this new century.

The best way would be to stay agile, stay hungry and stay informed. Not only will you survive, but you will definitely thrive with such an altitude.

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Comments 4 comments

countrywomen profile image

countrywomen 8 years ago from Washington, USA

Good tips esp money saved is money earned. Thumbs up.


wandererh profile image

wandererh 8 years ago from Singapore Author

Thanks! And the best way to save money is to save it in such a way so that it does not affect your lifestyle. You can have your cake and eat it too. :)


countrywomen profile image

countrywomen 8 years ago from Washington, USA

I agree we need a certain standard of living at the lowest cost of living. Good hub.


wandererh profile image

wandererh 8 years ago from Singapore Author

Well, isn't that what money is all about? To provide us with a certain standard of living? It's a bit of a contradiction then if you need to sacrifice your standard of living to save money. ;)

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