Welcome guys to the second part of our finance talk. In case you missed the first, click here to catch up and also insert your email down below to get blogposts immediately “publish” is tapped.
Future goals account gets more personal because we all have individual wants which varies from purchase of a piece of land or property to the capital start up of a business thus a planned save over a well estimated budget in regards to a timeframe is set.
Major save source are from salary income. How much of ones salary should be saved???
• According to Forbes, it usually takes the form of a rule of thumb, such as the admonishment to save 10% -20% of our income.
• According to the Smart MoneyWoman, incomes goes into three parts
1. Long term financial goals of a 20% income minimum for goals such as buying property, stocks etc.
2. Short term financial goals of 10% (holiday trips and the fancy likes).
3. Living expenses leans towards health insurance, Monthly rent contributions etc.
• Going with the budget popularized saying by Senator Elizabeth Warren, A “one size fits all” approach, however this is often not helpful because we all have different ideaology to financial freedom.
Over to the entrepreneurs, how to save and how much to save???
Tip: On the profit, save half. Also Do Not Deprive yourself of a salary, for from your salary you also save. A salary is a reward to one for their time and effort on a project, hence once time and effort is factored a well drafted salary is necessary. Further observations on period when demand is above average to high monetary project(s) estimation is needed for the growth of the business. This method goes more on skilled persons such as a baker, there is an upwards spike during festivities for a higher demand and supply hence the plan to save more is kept in place for occasions like these as well as upscale contract event planning (wedding, anniversaries etc).
Investment opportunities that are open while saving includes:
- Treasury Bills: Is a low risk and safe return investment issued by the Federal Government through the Central Bank to provide short term funding for the government. They are usually issued for tenors of 91 days, 182 days and 364 days at the primary market auction held fortnightly by the Central Bank of Nigeria with an interest rate (stop rate) that is not fixed but fluctuates based on demand and amount offered by the apex bank.
- Fixed Deposits: Fixed deposit is an investment account that offers an agreed sum of amount invested at an agreed interest rate between the account holder and the bank of choice on for an agreed tenor (tenor minimum is 30days and a maximum of 360days). The investment once matured can either be rolled over for investing again or liquidated i.e. given back to the account holder. NB: Fixed deposit account can be terminated at any time before the agreed tenor but accrued interest would be forfeited.
- Mutual funds
- Stocks & bonds
To be continued on the next post.
Interaction: What is your take on the rule of savings from salary source??? What are the challenges you face on your path to financial freedom???
Post word: Thoughts are mental energy; they’re the currency that you have to attract what you desire. Learn to stop spending that currency on thoughts you don’t Wayne Dyer ❣️
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