Understanding how much you should be saving each month is
never an easy task. While you may have established a number you would like to
put into savings each week or each paycheck, you may not kmnow the long term
effects of these savings and where they can place you a few years down the road
in your finances. I’m O'Reilly-Hyland
an experienced investment expert and I have made my career in investments by
putting special effort into how much I save. Here are some questions to help
you outline your savings for the future.
- 1. How much income would you like to earn each year from your investments: Understanding how much you would like to earn each year from investments could come down to what you may be saving for or some of your goals in life. If you want to save for a home or for retirement for example you should know just how much your investments will need to earn you each year to work towards your goal. Keeping on track with these savings and through reinvestment will help you to stay with your goal.
- 2. How much market volatility can you take with your investments? With larger profits in investments the more that you will have to manage risk and see deeper swings in value on your investments. Aggressive strategies can be profitable but you have to stand by and watch your savings rollercoaster over the long term and wait for the perfect time to sell in order to earn a profit on your investment. If you have only a little bit of money you can save each month you may need to get adjusted to a high volatility strategy.
- 3. When will you need the money? If you are working towards retirement you can establish a long term goal for savings, for short term goals however you will want to adjust your strategy for savings so that you can potentially have more money in a shorter time span. Remember that there are fees and taxes associated with many types of saving and investment and you could be responsible for paying extra fees for withdrawing money from certain savings accounts early. Remember to keep your savings manageable and to establish long term goals to avoid penalties.
- 4. What sacrifices can you make? As difficult as it may be, you may need to make a number of sacrifices in your own life and with your standard of living to put more money into savings. If you are willing to make sacrifices you can achieve your wealth goals much quicker.
