Tuesday, June 5, 2012

Saving for the Future - An Article By Nadir Naeem for FAMILY TODAY FORUM

English: Chart of United States Personal Savin...
English: Chart of United States Personal Savings Rate from 1960-2010. Data source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Personal Saving Rate [PSAVERT] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed August 14, 2010. (Photo credit: Wikipedia)
"WE ARE SAVING THROUGH PAYROLL SAVINGS&qu...
"WE ARE SAVING THROUGH PAYROLL SAVINGS" - NARA - 516067 (Photo credit: Wikipedia)

SAVING FOR THE FAMILY

www.familytodayforum.com

Saving for the Future

By Nadir Naeem
A detailed view on the importance of savings and investment, advice and direction into the best areas and necessary steps for its adoption and implementation.
The art of saving is a very important and vital need when acquired, rewarding and constructive when applied, helpful and wise when done. It seems to promise commitment, dedication and execution.
In fact,it is very simple and easy to have a proper Saving Structure, accumulating and generating funds for an individual’s future. Saving carefully can result in a Progressive Parallel System expanding on daily and yearly basis. The progress will convince the holder for its accuracy and effectiveness so it becomes a practice than just an effortful habit.
Here is how the various methods generate different long and short term Goals/Funds/Savings and are extremely safe and easy to guarantee a promised secure saving and future.
First, it is important to know that savings are very beneficial in times of need such as after retirement and old age, in crises and emergencies, joblessness and illness. It can also be a parallel reserve asset for attaining higher futuregoals, children’s education, marriages, purchasing property or a business.
There are two basic types of savings and investments when generating a normal routine income, depending on the volume and size. The present uncertain times insists an employed person to find multiple ways of income, overtime and odd jobs are definite ways to increase volume. Wise budgeting for monthly expenses save a handsome amount and savings done wisely secures the future.  Differentiate between “The Needs and Wants” and practice the“Do's” and the “Don’ts.”  Define and realize the true need and priority of your happy and secure life.
Short Term Savings include: pools, committees, bank saving accounts, saving certificates, foreign currency, gold, jewelry and bonds.
Long Term Savings include:retirement plans, insurance, investments, property and locomotives.
It is very necessary to know how the system outside our daily life affects our living and when once understood, is easyto manage with comfort.
Avoid unnecessary renovations, rents, taxes, debts, multiple and expensive household items, credit card debts,banking services/Internet banking, ATMs,mortgage broker expenses, holidays/vacations,junk offers, stock markets, money lending, loans, socializing costs and an expensive lifestyle.
Exercisecontinuous monitoring of tracking of expenses, budgeting/purchasing power, cost cuttings, ownership and resale value assessment of assets, memberships, smart shopping, discounts and deals. This could increase huge volume in savings.
The returns and rewards of savings are priceless. A wise “investor” divides his investment in equal shares and into different plans to secure his savings from any loss, damage, unseen or unevaluated/forecasted event.The present state and condition of financial markets leaves an investor reluctant. Savings, when invested in proper places, can increase the overall capacity and grip of an investor, hence the turnover multiplies after a few years automatically growing into a “Structured Investment System/Backup Reserve.”
Some of the different types of Investment and Savings:
The most easy and affordable are:
1. Retirement Plan:Most government and private companies provide benefit to their permanent employees with financial security facility and is available through minimal salary adjustment of 2-5% for example.The return is a saving fund and pension plan at the time of retirement.
2. Insurance: Minimum investment required yearly for a solid, profitable and guaranteed secure plan as per requirement of the client. A whole life self-insured person can take up to certain education/marriage plans for the children with minimum yearly amounts on each. Health insurance guarantees you free medical, hospitalization, treatment and surgery of life threatening diseases such as heart attack, tumor, cancer etc. at the cost of an additional 2.5% of the yearly payable amount known as “The Premium.” An investor, or a policy owner, can withdraw one, or all, of his savings,or the generated profit/interest after a few years or at breakeven.The returns are 2.5 to 3.5 times higher of the actual amount saved in 15 to 20 years. For example if one insurance plan of 12,000 USD/year is carried for the next 20 years equals to 240,000 USD but has actually converted into 550,000 to 600,000 USD at maturity. Insurance also provides accidental death or disability coverage.
3. Individual bank saving accounts: Would generate a profit up to 7% or more of the amount on yearly/half yearly or monthly basis. Junior accounts for children could build a healthy practice of saving money.
4. National Saving Certificates and Mutual Funds: Banks would provide fixed profit amount on maturity after a certain number of years. The profit could be as high as 10% or more annually.
5. Foreign Currency/Gold/Jewelry/Bonds: Bought and kept safe in a bank locker with valid insurance and documentation could bring much higher gains and profits.
6. Committees: A group of family or friends could combine a monthly standard amount for example of 100 USD each from 12 members and can generate 1200 USD for one individual every month. It can also be a way of having relaxed comfortable easy inexpensive get-togethers with a focused object of saving.
7. Pooling: This activity done individually, or with the family, can set small amounts of money. Every member should contribute daily even if it is single coin to “The Piggy Bank.”
Other areas of savings and investments are:
8. Business Investment: Businesses offers for co-ownerships or partnerships. This area needs thorough experience, investigation, research, policy, documentation, terms and conditions, market analysis and analyzing the actual value or expense. A sustained profitable and progressive business needs proper evaluation and judgment. Investing in a cottage industry for example done within the family or starting with minimum investment in a particular business and growing the amount after increased profit returns and generation can promise further development and assurance.
9. Property Investment: Investing and purchasing in property is better than living on rent. Land value increases slowly and steadily through a long period. Proper assessment, evaluation, cautions and professional advice is compulsory.
10. Locomotive Investment: Well maintained cars and motor vehicles kept for a certain numbers of years can save huge amounts instead of changing to new makes and models.
By creating a balance in earnings and spending,saving different amounts and volumes, investing in proper plans, areas and assets, setting realistic goals and terms, a common man of today could transform into a future potent and successful investor. Implemented and executed wisely, safely and patiently.
I wish the best for your plans and growth. Start saving!
Nadir Naeem is a media director, producer, designer and writer with over seven years of professional active experience. He has been writing for various e-magazines and blogs currently holding the position of Community Manager at BlogyMate. He is also a qualified Insurance Executive in a Multi-National Company.

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