This is why You’re Not Saving Enough of Your Paycheck
Savings and investments go hand-in-hand – together, they can totally transform your personal finances. It’s recommended for the average Singaporean to have at least 6 months’ worth of their monthly income saved at all times (Lim, Tracy (August 2020)4. That being the case, it makes sense that some Singaporeans seek other avenues to have their money work for them, so they can improve their savings at a more rapid pace. Still, there are important things to consider before you jump head-first into investing all of your money.
It’s not a good idea to start putting money into anything other than paying down debt when it comes with a high interest tag. Take care of any existing debt you have that is accruing interest over time, and once those expenses are taken care of, you can begin to focus on other potential investment strategies.
Protect Your Health & Home
Having the right and adequate protection coverage (including health and critical illness insurance!) and home protection is also important to consider before you start investing your money elsewhere. Hospitalization due to unexpected illness or an accident without proper insurance coverage can drain your bank account, as well as affecting your family! Protect your health and home so you and your family are safe if something unexpected occurs before you begin worrying about an investment opportunity.
Understand How Investing Works (Caldwell, Miriam (April 2020)1
Don’t jump into an investment strategy before you even understand basic investment terminology. The first step to any successful plan includes proper research and education about that opportunity before diving head-first into it. Do your research and find out what types of investments will work for your lifestyle or financial goals, and make sure you continue learning as your investment experience grows.
It never hurts to enlist the help of an expert! Find a financial expert who can help you to understand the risks and rewards of investing and will make sure your investments are working well over time. Utilizing an expert will also help you to readjust your strategy and grow your existing investments confidently.
Before you even begin investing, it is important to pay off any high interest debt and ensure you have the appropriate insurance and home protection coverage. Then, do your research – educate yourself on the fundamentals of investing and enlist the help of an expert. Once those things are in order, you can proceed with investing your hard-earned money and begin seeing the benefits of passive income!
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