Saving for your retirement is not the only goal you should consider when planning for your long-term financial security. There’s also the question of how you intend to create wealth for yourself and for those family members you’ll leave behind someday. So what are the best strategies for you to create wealth. Well, the best strategy for most investors is to invest their money in blue chip shares or in a pool of mutual funds, which offer ease of purchase and instant diversification. Just in case you’re wondering, investing on the Securities Exchange will not cost you an arm and a leg.
A commercial bank once used the following slogan to drive this point home: “You don’t need a lot of money to make money.” From as little as a hundred bucks monthly contribution, investing in mutual funds is a steal for those who know how. Ask your financial advisor or stockbroker for details. Do You Want to know how smart people invest their money to create real wealth? There are various methods you can use to invest in shares or mutual funds. For example, you can begin trading in mutual funds by taking advantage of your company stop order facility, or bank debit order deduction system used by most mutual fund companies which deducts a set amount of cash automatically from your monthly pay or bank account.
Not only will the system help you build up a nest-egg and your real attempt at creating real wealth, the money never gets into your greedy little hands. On the other hand, some investors may prefer to invest a single lump sum to purchase mutual fund or shares, and take advantage of the discount companies allow on lump sum investments. Take heed though, while some investors may also prefer to have their dividends (that’s the money your investment earns while invested in shares or mutual funds) paid out in cash, the fun of investing in mutual funds and share’s is that you’re allowed to reinvest your dividends back in the fold.
Reinvesting your dividends allows you the opportunity to keep on purchasing more shares every time dividends are paid by the company so your money can grow faster through the power of compound interest. It’s that simple. And there’s no telling how far your investment will grow! Another word of caution: Unlike long-term investments such as retirement annuities and endowment plans, your money is always available whenever you need it. But your best option would be to leave it there to grow until you’re ready to withdraw it to fulfill your life-long dreams. And the longer you leave it untouched, the more it will grow, and build the wealth you’ve always been dreaming about for you and your loved ones to enjoy for as long as you live.
2010 Andrew Molobetsi. All rights reserved
Andrew Molobetsi is an accredited financial advisor/licensed tax practitioner based in South Africa. He also publishes a financial planning website at http://www.andrewmolobetsi.com/. Sign-up for a weekly email newsletter to receive financial fitness tips, tactics and ebooks/reports – F_R_E_E.
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