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Saving is a great way to achieve financial freedom. My mother always tells me that the one who knows how to save money is the one who will become rich. That is so true. I met many people who used to earn a lot of money but they are not rich at all. The low saving rate in America shows that saving is not as easy as you might think.
The saving rate in America is as low as 1%. The low saving rate means that people have to work forever for food and bills. Why is the saving rate so low? The reason has been pointed out by Frank and Muriel Newman. The key is the concept of saving. Many people save their money after their spending. This is absolutely wrong. You should only use the money after you have saved.
If I ask you to save 20% of your monthly salary, you may find it very difficult. When the money comes to your hand, you want to buy, buy and buy. Therefore, the best solution is not to let the money come to your hand. You may join the monthly investment scheme in the bank. Such scheme requires a fixed monthly salary deduction from your account to be the principle of investment.
You may not believe that a little bit saving a month can help you attain financial freedom. I can give you an example to understand more about the monthly compound saving effect. If you have $100 investment every month at a 5% return. You may find that you have a much bigger sum of money at the end of the year due to the monthly compound effect. The monthly compound effect means the accumulated effect of principle and return from the first to the second month and from the second to the third month. Can you imagine the result if the compound effect applies to 20 or 30 year of times. You are going to be financially free.
Other than saving, you have to learn the world control. To attain financial freedom, you should avoid adding to yourself the financial burden. Control your spontaneous possessive desire which leads most of the people go into a financial problem. If you love to use credit card, you should pay more attention to this point. This is because the interest rate charged by the credit card company is extremely high. When you fail to make you payment, the interest is also counted in the way of compound.
One more advice to you is to always keep your eyes on your financial status. Many people go into financial problem and bankruptcy because they do not know their financial status clearly. When you know your financial status, you will do all possible actions to stop your liability and gain more assets.
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Tags: Currency Trading, Finance, forex, investment, Trading