A thousand dollars, three monthâ€™s salary, and now six months to a yearâ€™s worth of salaryâ€¦ the amount of money you should have in an emergency savings fund continues to rise. The troubling part for many of us however, is that our incomes donâ€™t increase as quickly. Finding a means to save is often challenging and can require a lot of cutbacks and sacrifices. Unless youâ€™re willing and able to take on a new job, sometimes it seems like beefing up your savings is impossible.
Grow Your Money
The good news is that you can make your money work for you. There are plenty of ways to grow your money, however, one of the most popular ways is through investments. Stock market investing, which used to be considered a very complex trade is now easier than ever. Companies like 24option, offer clear definitions of the types of investment accounts available with platforms that allow for seamless trading and monitoring. Just about anyone with a few bucks and extra time can increase their income to boost their emergency savings.
Know the Risks
Most are probably aware of the basic idea of investing. Youâ€™re purchasing stock from a company with the hopes that their products and services will warrant an increase in stocks. The more the stocks increase, the more money you stand to make when you cash them in. While investing can return a huge payout, it is important not to overlook the potential risks involved. Naturally, when investing in a particular company youâ€™re taking a gamble that youâ€™re going to see a return on the investment. Risks involved with investing include:
Market Risks – This is when something happens to cause a global stock market crash. This could cause prices to plummet which results in a loss of income.
Inflation Risks â€“ This is when the potential that the cash flowing from a particular stock you invested in is not going to be as lucrative in the future.
Liquidity Risks â€“ This occurs when an investor is not able to buy or sell stocks fast enough to prevent income loss.
Be that as it may, proper preparation and planning can help to minimize the potential for risks and so you shouldnâ€™t let this sway you from becoming a method of growing your wealth.
Tips to Investing
Now that you have a better understanding of how investing works and what some of the risks could be, letâ€™s briefly talk about how to get started and some tips for growing your emergency savings exponentially.
Â·Â Set a Budget â€“ While you hope to increase your income, at the current time youâ€™re using your personal income to invest. Therefore you need to come up with a dollar amount that you feel comfortable investing on the monthly basis. This should be income that will not jeopardize your monthly bills.
Â·Â Find a Broker â€“ next youâ€™ll need to find an investment broker so that you can set up an account. There are various platforms to consider. Many novice investors try an online broker account as they can easily deposit funds, receive notifications on their stocks, and learn how to trade online in their spare time.
Â·Â Invest Wisely â€“ when choosing companies, products, or services to invest in, be sure that you conduct research to determine what their stock market trends are. Do they have a steady increase? Do they tend to crash a lot? Are there new products or services coming to the company that would make them a good fit? Reading the news and checking out the market online can all be useful tools for determining which company to invest in.
Â·Â Know When to Fold Em â€“ This tool will require a bit of research and understanding of the market. However, you need to know when itâ€™s time to sell your stocks so that you donâ€™t lose money. Watching trends, paying attention to the news, and reviewing your account on the daily basis are all great ways to learn when itâ€™s time to sell.
You never know when youâ€™re going to need emergency cash. If you know life as well as I do, you know that at any moment the car could break down or the plumbing could need repairs. When you donâ€™t have the money you need on hand, youâ€™re left to borrow the funds which puts you into further debt. Thatâ€™s why itâ€™s great to have out of the box options like investing to grow your income so that you can put it away for a rainy day.
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