Home  Personal-Finance You Need a Savings Account to Save - Think Your Money!
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You Need a Savings Account to Save - Think Your Money! |
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Written by DerekVolcano
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Sunday, 06 December 2009 |
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No matter what job you have, you have a tool box. If you are a carpenter you have a truck full of saws, crowbars, hammers, levels and sanders. Every tradesman has a truck or a trailer full of tools. A lawyer or an accountant has volumes of reference books. An internet marketer has his computer and all the web programs to sell everything from soup to nuts on line.
by DerekVolcano
No matter what job you have, you have a tool box. If you are a carpenter you have a truck full of saws, crowbars, hammers, levels and sanders. Every tradesman has a truck or a trailer full of tools. A lawyer or an accountant has volumes of reference books. An internet marketer has his computer and all the web programs to sell everything from soup to nuts on line.
Why do you need tools? The answer to that is simple. They allow you to do a better job more quickly. The number one rule for buying a tool is that if it does not pay for itself within a week by allowing you to do the job faster, then it is not a good tool.
Money requires you to have a tool box to manage it properly. Investment tools allow you to make more money faster and with a range of risk. The measure to which you measure any money tool against is compound interest. The amazing thing is that even at low interest rates compound interest is a tough tool to beat.
However, the number one money tool is the capacity to save. How do I make this clear? YOU MUST SAVE! You have to take some money out of every payday and put it away and not touch it. This is like a hammer is to a carpenter or a trowel to a bricklayer. You cannot make your money work for you without savings.
Once you have saved you have a whole army of professionals to help you take care of your money. Your lawyer should help you protect your money from usurpers. Bankers and investment counsellors should help you make your money grow. Accountants will help you track your growth and take care of expenses. Real estate agents should show you properties that will allow you to reduce your housing costs and lever the value of your savings. All of them should be viewed as a tool. They must pay for themselves and make you more money than if you just had it compounding in a savings instrument. If they do not do this, do not hire them. If you have hired them and they fail to produce improved results then fire them and keep you money compounding.
Put money in a compound savings account and see how much you can save a year and do this for 5 years. You will see that at the lowest compound rates (3.5%) you can add 20% to you're savings over the 5 years. The other 80% is what you saved. This illustrates my point that the number one way to accumulate wealth is to start by saving. The simplest tool to help you save is a savings account.
It requires a great deal of discipline to save and not touch your money. Once you have sacrificed to save you will then have the attitudes necessary to protect your money and apply the "Tool Rule" to anyone you hire to help you with your money. You will understand why you need an army of professionals to take care of it. If you have it, there is a multitude of people who will try to get you to give it to them for nothing in return.
About the Author:
Self appointed financial author Derek Volcano talks about a bank Savings AccountDo you use a savings account as one of your financial tools? Visit the Uber Article Directory to get a totally unique version of this article for reprint.
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