Budget. Not a word most people like to hear or even think about but it’s the most important tool to harness control of your finances. Even more confusing is once you have a bit of disposable income, what to do with it. Save it in a bank account, invest in stocks and bonds, or perhaps ETFs are the way to go. According to experts in investment services Brainerd MN residents should do a little of everything.
Start Saving More
One of the biggest obstacles is always saving more. Financial analysts say you should be saving a minimum of 20 percent from your paycheck, and then further breaking that down into separate investments.
Sometimes, it can feel as though life is a series of non-stop bills. While the electricity, gas, phone, and grocery store expenses are all necessary, analysts say to look for ways to make those bills smaller. Being creative could provide you with a few extra bills each month.
Consider fixed energy budget billing. Many utility companies allow you to get on fixed-rate contracts with them, so you’ll know what your monthly bill will entail. Instead of a variable deal with your electricity bill going up and down, a fixed rate will bill you by the average you spend on electricity and that’s what you’ll pay each month.
Look for ways to ask for discounts. Question your car insurance representatives and ask for those hidden discounts. If your car is parked in a garage, that should be a discount. Even working for certain employers or being a member of a sorority or fraternity offer small discounts off your bill. Or simply shop around for better deals, especially when it comes to big ticket expenses.
Now, if you have any extra money, you should pay down your debt, but you should also begin thinking about investing. Analysts advise to invest in things humanity simply cannot ignore, like technology and healthcare. More than 70 million Americans, with birthdays that range from the late 1940s to the early 1960s are getting older. This has huge implications for healthcare and pharmaceuticals. Prescription drugs are expected to increase by seven percent by the year 2021, so for long term growth, this is an opportunity for investors.
Analysts also point out that investors can use exchange traded funds to build a healthy portfolio. As for healthcare, by 2050, almost 80 million seniors will suffer from some form of arthritis. Strategically, it makes sense for millennials to consider investing in pharmaceutical companies, like Humira, who manufacturers arthritis drugs.
As for technology – look towards a digitized economy when investing.
Making Money Work for You
Getting rich doesn’t happen overnight. It will take time but when will you start? Financial analysts say it’s smart to automate your investment account, having a set amount deposited each pay period. You start by always paying yourself, and no amount is too small. And diversify to keep your risk low so if one asset is not performing up to par, the others will make up for it.
There’s is no magic formula but if you never take the opportunity to invest, you’ll never realize any real gains.