Grow your money

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Assuming you have a good spending and saving habits, which will now have a fairly large sum of money that is useful to do what you please. So what will you do with all that money? Happens all luxury items you have your eye on for over a year? Going on vacation? Or do the smart thing and save?

It's important have a goal to start a savings program because the goal of encouraging saving - not like a carrot dangling in front of the donkey, even if you are far from being an ass if it's smart to be the motivation to save.

So if you do not have goals, think. You do not have to limit yourself to a single goal - to have some goals if they help you save more, provided they are realistic and worthwhile.

In the meantime, while you keep your anger toward the goal or goals, where you keep your savings? Kept in the drawer? That's not a smart thing to do, because it's not such a terrible thing called inflation, which is figuratively interrupt pending idle savings. They see the money just lying there in the drawer and bang! what puts money in the jaw!

Inflation and purchasing power

What is inflation? No, not insects or animals. It is abstract. Inflation is the economic term for the rising prices, or the cost of living. Inflation is when the price of things you buy on the rise. Let me give you an example. Say your family to take grandma to dinner at his favorite restaurant Nyonya. This is the first visit to Kuala Lumpur Your grandmother or city for that matter - who lives in a small town and never venture outside their garden gate.

Of course, you have to ask your favorite dessert - ice kacang! There is no denying that a lot of rainbow colors crushed ice with syrup and milk, sitting on a variety of beans, corn, beet jelly, longan and what-again, and topped with ice cream. When his father to pay RM4.50 fish out his nut ice - care of Grandma! He could leave his chair in shock! Why? Because when he was a child, peanut ice only costs 10 cents. DIME! Now it's your turn to fall off the chair!

That's what we mean by inflation. Price increases. Sixty years ago, the ice grains costs 10 cents. Today at a restaurant costs RM4.50 and RM1.50 own posts. The price has shot skyward. Put another way, inflation has reduced the purchasing power of money over time. 10 cents grandmother can not buy a plate of beans ice today, maybe just a little crushed ice. 10 cent has lost a lot of buying power, buying less than they did 60 years ago. In fact, the price of peanut ice hawker days will not last forever RM1.50. It will go up and you do not have to wait until a grandmother / grandfather to see this. When you are a father / mother, want to bet bean ice probably cost about RM2 in the stalls.

That's inflation for you. And the bad news is that inflation is not only attacking the food. Is rampant, sink the nails in all things and services that are part of life - clothing, furniture, bicycles, home, movie tickets, taxi rides and other park. That's why it is called the cost of living.

So what does this mean for your savings? Only if you just hide their savings - let's assume that you have saved RM100 - in drawers, you just stay RM100 RM100 to want to use it. Meanwhile, inflation nibbling RM100 value so that when you actually use later, RM100 you wont be able to buy everything when you start to save. This is because - depending on how long you keep your money - the price will increase at the same time. Of course, if you immediately use their savings, inflation probably will not have the opportunity to work again. But of course, we're talking about a savings program here, and that means a long enough period of time for your savings to grow - and inflation occurs,

So what should you do? To fight inflation, should make their savings grow in value faster than the rate of inflation. (We are sure you have more) If you just let your savings RM100 remain the same, you know that over time the purchasing power of RM100 not RM100 but less - because the price will increase. However, if you can grow RM100 savings, for example, RM150, so that in the future you can not just buy the same things that the RM100 can at the beginning of your savings, you can buy more things.

The investment is the way forward

To grow your money, you will not leave your cash in the drawer or property under the mattress or in any other place that is just put on and forget about it until you want to use. To grow your money, you should do the smart thing the second - the first smart move is to save - you should invest.

Investment is defined as the use of money (in this case, their savings) to make more money. Adults, people who are smart, they do. They invest to make money with their money, and when it has grown, it becomes to invest large amounts and in the process of investing time and again, your money is doubled, tripled or multiplied many times. This is how people become rich not by winning the lottery (which has one chance in seven million or so), but through savings and investment. You can do the same with a small amount of your savings and watch it grow.

There are many ways to invest your money for profit. The return is the amount of income you earn from your investment. The simplest and most common is to put your savings in a savings account or fixed deposits (and we're sure you all know this). Your savings will grow as the bank pays a sum of money (the return) is called interest, provided that the money is in the bank. So your savings grow to use and when you remove it from your bank account, the amount of money you have now is the original deposit and the interest that has accumulated. It's not just your RM100 but a larger sum.

So the bank account is a type of investment that easy. Others invest in the stock market by buying shares in the company. Many adults do this. People usually invest in stocks, hoping to get a return in two ways. One is the dividend, the financial benefits that companies pay to shareholders only when the company makes. The second is the realization of a profit by selling their shares. Profit is profit in money between what you paid for the shares and what you get when you sell your shares. Simple math to explain profitability. For example, if you have a deposit of RM600 and RM3 to buy 200 shares each, and three months later, to sell their shares to 200 RM4, you will make a profit of RM200.

Here's how:

Cost to buy 200 shares at RM3 per share = 200 x RM3 = RM600.

The amount of money received from the sale of 200 shares into shares RM4 RM4 = 200 x = RM800.

= Profit = Sales less purchases RM800 - RM600 RM200 =.

Gains have been made to swell their savings RM800 to RM600.

There are other ways to invest your money.

You can also buy a house, if you have lots and lots of money (for example, to inherit the wealth of her favorite aunt who had died). If you rent your home, your return will be the amount of rental income received from tenants. The investment of the method you choose will depend on factors such as the amount of storage you have and how much you want to re-do. Investment each has pros and cons.

For example, investing in stocks can get more return on your bank account, but it is more risky. If you put your savings in a bank account, your money is protected. Do not miss it because you can lose your money in stocks if you buy the wrong side. Even if the bank is robbed, or burned or declares bankruptcy, the law states that you will get your money back. Not so with stock investments. However, bank interest income is relatively small.

Investing in real estate as a home can be a great return, but it is a long term investment. It will be years before many home prices rose for you to sell your house and make a profit. (Remember? Sale Profit less equivalent.) Get his return from investing in stocks much, much faster, but as we said before, you should be smart (and lucky) to choose the right to buy or you may lose your money invested.

Even with all types of investments (except maybe for a bank account), there is always the possibility of losing their life savings, some of the returns. If you invest unwisely, may lose both your original deposit amount and not a return to everything.

However, there is no mistake about this: the investment is the way to build your wealth. Just invest wisely!

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The Rich Gets Richer

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We all heard the saying.

"Is it true? Do the rich actually get richer?"

Yes, of course! I'm here to confirm that it's true. What you have long heard and believed is indeed true - the rich gets richer.

And if you don't believe it, I have this to say - some things are true whether you believe it or not!

And deep down inside, a lot of people resent the fact. They resent it because they believed that the rich are hoarding all the wealth. They believed that the rich are taking it all and grabbing everything in sight, leaving peanuts for the rest.

Wrong track! The rich are not hoarding the wealth. Even if they wanted to (which they are certainly not), they could not. This is because new wealth is being created every day. Furthermore, there's plenty for everyone. Money is one commodity that this world will never run short of. So you can take as much as you want because there's plenty left for other people.

As to why the rich gets richer, the answers are obvious. Firstly, they know what to do to become rich. They know what actions to take, what words to say, who to hire, etc., etc. In other words, they have the formula of becoming rich. This helps tremendously. If you know the recipe for anything, then your job immediately become a lot easier!

Next, they spend their time and effort to work the rich formula. They just concentrate on the formula and don't waste time doing other things. This makes sense of course. If you want to become rich, why waste time doing things that does not build wealth or make you rich?

Thirdly, the rich believe in themselves. They know they are good money managers. They have proven themselves worthy to manage money, even lots of money. So they have no problems to take on the challenge of handling even more money. And although they may not have all the answers, they know that they have what it takes to overcome any problems that arise.

Next, they pay people for their time and effort. Whenever they require a service, they hire experts; often time the best in the field. This means that the rich gets quality work, which promotes more money to come in their front door.

Lastly but certainly not least, the rich are paid for the result and not for their time. As time is limited, the rich hates to be paid for their time. So they changed the rule - they get paid for the result that they bring. Because they are good at what they do, they bring great results which translate into lots and lots of money into their bank account!

Poor people on the other hand are missing practically all of the above.

Firstly, they do not have the rich formula. They don't know what to do to build wealth. As a result, they run around in circles trying to discover the formula. While a few eventually discover the formula, most will remain in the rat race for the rest of their lives.

Next, and related to the above, the poor spend too much time and effort on unproductive things. They want to become rich but they are doing things that will not make them rich. For example, watching too much TV has never made anyone rich.

The poor also concentrate on the negatives. Every time there is an opportunity to make money, the poor will first look at the negatives. "Too risky." "I do not have enough capital." "It's too difficult." "It takes too long."

Finally, the poor wants to be paid based on their time and effort. An honest day pay for an honest day work kind-of-thing. The problem with getting paid for your time is that your income will be limited as your time is limited. There is a cap or a ceiling to your income. And that gets in the way of becoming rich.

So yes, the rich gets richer. That much is true. However, the sentence is not complete. The poor can also become rich - if they are willing to do what it takes to become rich. There's plenty for everyone. All they need to do reach out and take their share.

Azizi Ali is Malaysia's premier writer, speaker and coach on money matters. He is a Chartered Financial Consultant (ChFC) and holds an MBA from University of Bath, UK.

Log on to http://www.beahappymillionaire.com to find out more about Azizi and how he can help you lead happier prosperous lives.

Article Source: http://EzineArticles.com/?expert=Azizi_Ali

Opportunities To You