Trade The Journey

Trade The Journey

I caught your money sleeping!

Your money should either be earning or returning! I forgot where I saw this phrase but I am sure any financial book will convey this idea.

The second principle after saving money is learning how to make your money work harder than you do. Money that’s been invested is continually working with guidance from you to provide you with a return. I begin to believe that, “A part of what I earn is mines to keep” because I proved it to be true to myself. I have also experienced less stress by adhering to this principle.

The first person who should believe in what you are doing is you!

The trick is to find ways of earning money on top of the money you have saved. Ideally it should be an investment you are familar with and an investment that can earn a steady return above the inflation rate. If nothing else, your money should be earning more than the inflation rate especially if you’re retired.

Learning about invesments can be both intimidating and exciting at the same time. You are exposing yourself to risk, willingly. To some this can seem like a losing situation, especually if you are not familar with the various invesments available to you.

Researching the various investment risks/returns and the learning curve associated with learning how the investment works, is worth your time. I’ve seen situations develop over time in which the money held could no longer purchase the products/services at todays prices in the same amount.

Can you imagine the feeling of knowing the money you receive for retirement is no longer enough to cover basic expenses?

If your money has no reason to work, it won’t. The intriguing aspect of risk is that its ever present even if it seems as if its not present. By allowing your money to sit around, it risks being worth less in your later years.

Inflation will continue to rise over time. For an accurate idea of the inflation we’ve seen in the past, its helpful to look at the Personal Consumption Expenditure and Consumer Price Index to plan for the future.

Here you can find information about the PCE and CPI. The Federal Reserve pays more attention to the PCE.

Here you can find out the difference between the two. This link is a small PDF document.

Select your investments wisely. Part of doing this is designating what part of your capital (Money) should be at high risk, moderate risk and low risk. I believe that everyone should make investments based on who they are which why I shy away from recommending specific investments.

Thoughts?

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