When to turn your savings into an investment?

 While saving is one of the most important steps toward financial health, accumulating money without a strategy isn't optimal. The idea is to set a fixed goal following a planned path according to the objectives. Thus, investing savings will be the next step.

 There are 3 types of savings: short, medium and long term. Each one has different objectives. The short one is for things that do not require a lot of money and it is recommended that the savings be for a maximum of one year. The medium-term requires higher amounts and savings of between one and five years are recommended. Long-term savings are those that require more than 5 years of savings.

 But why invest the money from your savings?

 Investing your savings is designed so that the money saved does not lose value. This is inflation, a general increase in the prices of goods and services.

 When prices rise, citizens see their purchasing power diminish. In fact, it means that with the same amount of money we can buy fewer things. For example, if you are looking to save with a view to having a good retirement, by the time you reach that moment, prices will have risen so much due to inflation during those years that the money that has been raised will be insufficient for the plans that you have. .

 It is precisely for this reason that it is recommended that for those goals that require more than one year of savings, an investment method be used that is low risk, but that offers a return above the average annual inflation during those years.

 Saving without investing for a long-term goal will be very difficult to achieve. But to identify where to invest my money and the types of investment that suit you, you must identify your investor profile according to the risk you are willing to assume.

 For example, if you are willing to take little risk, you have a conservative investment profile. You must assume that your investments will not have great returns. The moderate profile aims to balance risk and return. The risky profile is the one that prioritizes performance over risks.

 Saving money or investing it will depend on the ability to save and the plans you have for the future. Experts recommend doing it at the same time, investing 30% and saving 80% of income, as long as a prior analysis of fixed and unforeseen expenses has been carried out. Over time, the investment percentage can be increased to put the greatest amount of savings to work.

 It will always be a good time to save, to learn how to manage personal finances and have a secure financial base against any emergency or unforeseen event. Also, this will be the first step in the transition from saver to investor.

 To be constant in saving, it is convenient to create a strategy according to the goals. For which, a savings account could serve to maintain a better organization of finances and know how to grow your money in the bank, especially when long-term savings are planned.

 John Labunski Financial advisers recommend having more than 6 saved payrolls, and when you get it, the next thing to do is invest your savings to multiply the capital. But where to invest my money? There are different options, although it is best to make long-term investments to obtain a better return on savings. Investing will always be a good idea, but all the options must be analyzed to choose the most appropriate according to the profile and objectives.

 

Learn well about the financial products that exist in the market and always choose the one that best suits your needs and objectives. Check that the option you choose not only offers you the best returns, but also which of the options charges you the least commissions. Avoid saving without investing and achieve your financial goals.