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Honestly, there are no magic tricks. The following will sound like pablum, but it's tried and true:
- Save early, save often. Don't do it to the extent that you're depriving yourself of things you could easily afford and would enjoy, but don't neglect your savings.
- Once you have adequate cash savings, start investing, early and in equities. It's okay that you lose money, over the long term it's better than fretting about possibility that tomorrow your nest egg may be a nickel smaller.
This is something I wish I'd started sooner. I did invest in my company retirement plan as soon as I started working, but put some of that money into its income fund (not equities), and kept my all taxable money in bank accounts.
- Start by investing in broad based index funds, like FSTMX (total US stock market) or VTWSX (total global market). Not that I discourage active fund investment. But this is a way to ease into investing and get used to seeing the markets move up and down, without having distractions like worrying about managers, sectors, asset allocation, etc.
- Identify savings/investments for specific targets, like paying for a downpayment on a home, or paying for kids' education.
- Things happen. Expect to be hit by unexpected expenses, and know how and where you'll get money to deal with them.
I’d like to say watch Louis Rukeyser every Friday night if he were still around. That was my best financial education over a quarter century. Since he’s not around ...
#1. Begin putting away whatever you can afford at an early age. Even relatively small amounts compound nicely over the years.
#2. Use a good global growth fund (U.S. & international equities) during the years before retirement.
#3. Leave it alone. Don’t watch too closely or worry about it. You’re never going to bat 1000 - regardless of what some would have you believe. -
More broadly, I agree with those who’ve mentioned “budget.” It sounds simple - but in reality is very difficult to learn and execute. Running a carefully crafted annual household budget will keep you out of debt and allow for the “extra” money to invest. (In its simplest form ... there’s two columns. One’s labeled “income” and the other’s called “expenses”. They need to match.)
Comments
- Save early, save often. Don't do it to the extent that you're depriving yourself of things you could easily afford and would enjoy, but don't neglect your savings.
- Once you have adequate cash savings, start investing, early and in equities. It's okay that you lose money, over the long term it's better than fretting about possibility that tomorrow your nest egg may be a nickel smaller.
This is something I wish I'd started sooner. I did invest in my company retirement plan as soon as I started working, but put some of that money into its income fund (not equities), and kept my all taxable money in bank accounts.
- Start by investing in broad based index funds, like FSTMX (total US stock market) or VTWSX (total global market). Not that I discourage active fund investment. But this is a way to ease into investing and get used to seeing the markets move up and down, without having distractions like worrying about managers, sectors, asset allocation, etc.
- Identify savings/investments for specific targets, like paying for a downpayment on a home, or paying for kids' education.
- Things happen. Expect to be hit by unexpected expenses, and know how and where you'll get money to deal with them.
Welcome to MFO.
Do you have access to investments outside of your home country?
I agree with the statements posted by @msf.
Be frugal to some extent and do your best to maintain a solid budget for what is necessary and pay regard to what you "want", but may not need.
For a full view of you and yours personal expenses, maintain a daily written log of where and for what monies are spent.
Regards,
Catch
Regards,
Ted
Personal Finance 101:
http://blog.xyplanningnetwork.com/consumer-blog/personal-finance-101
Personal Finance 101:
https://stefanieoconnell.com/beginner-financial-planning/
Personal Finance 101:
http://www.investopedia.com/university/beginner/beginner1.asp
Personal Finance 101:
https://www.quicken.com/financial-planning-101-essential-tips-beginners
#1. Begin putting away whatever you can afford at an early age. Even relatively small amounts compound nicely over the years.
#2. Use a good global growth fund (U.S. & international equities) during the years before retirement.
#3. Leave it alone. Don’t watch too closely or worry about it. You’re never going to bat 1000 - regardless of what some would have you believe.
-
More broadly, I agree with those who’ve mentioned “budget.” It sounds simple - but in reality is very difficult to learn and execute. Running a carefully crafted annual household budget will keep you out of debt and allow for the “extra” money to invest. (In its simplest form ... there’s two columns. One’s labeled “income” and the other’s called “expenses”. They need to match.)