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Grow Your Money: Why Building Your Savings Matters
Saving Your Money Is Important To Financial Security
Growing your money takes a lot of time and patience. You won't get rich off of a couple of investments. However, taking the long-term view can work wonders for your financial future. Saving your money is the first step toward growing your money. Continue reading to find out how you can secure your financial future just by putting a small amount of money into a savings account.
Larger Investments Yield Higher Returns
You could decide to invest your money little by little. There is no harm in that. However, you can get better returns on your investment if you invest a larger amount. For example, you can get a higher interest rate on a CD if you put in 5,000 dollars as opposed to 500 dollars..
Spending a year saving your money can make it easier to purchase an investment property. You won't be able to purchase a home unless you have a significant down payment. This is generally 10 percent of the purchase price.
Purchasing a rental property is a great way to grow your money. However, you need to start putting your money in the bank as soon as possible. Investing in something such as gold also takes a lot of money. It will take around 1800 dollars just to buy one ounce of gold.
Regular Savings Can Accrue Interest As Well
You can use your savings account to help you grow your money. Most banks and credit unions will offer about .5 percent interest on your money. In a better economy, you could get as much as 3-5 percent return on your investment.
CD's are a really safe place to invest your money. Putting your money into a CD will also help you resist the temptation to withdraw it. Taking you money out too soon will kill any saving plan you worked so hard to execute.
Kids can be taught good money management skills if they open an account at an early age. Children won't be fretting about a less than 1 percent interest rate. This is even more true because they have the time to grow their money as they are growing up.
Enjoy Tax Savings
Consider putting your money into an IRA. Going with an IRA can help you save money on taxes while you save for retirement. Your IRA will also enable you to grow money in your retirement fund. Investing in your 401k at work may be another option that you look into.
The reason why you want to invest in your IRA is because of compounding interest. Compounding interest is your friend when you are growing your money. This allows you to grow your money much quicker over time.
You can invest up to $5,000 a year depending on how old you are. You can find rules for investing here. This money will come in handy when you stop working. It is just another example of how you can grow your money without having to work for it.
Savings Is Important
Regularly adding to your savings account is an important step toward your financial goals. You can turn 500 dollars into 5000 dollars in a short amount of time. That money can be put back into your original investment. You have now started an upward trajectory for your financial future.