A Savings Plan Where You Can Actually Make Money
Many people want a savings program where they could actually make money, maybe not curiosity that is miserly. Here’s a custom built savings plan and investment system I offered clients when I was an active financial planner.
We’ll use Jack as our illustration. Jack compensated more curiosity than he could make at the bank and wanted a savings plan that was secure. Plus, he didn’t want too much money accumulating in the bank where it was therefore readily accessible because he was constantly tempted to take a withdrawal and invest it.
Jack had never been into investing money in bonds and shares to make money because he abhorred threat and did not know how exactly to invest. He also disliked and didn’t trust the investment business or individuals who worked in it. Because he knew he required a savings strategy in addition to an expense program if he desired to earn greater returns, he decided to talk if you ask me.
We started Jack’s first economic adventure with $600 each month flowing (automatically) from his checking account to your large mutual fund family. All of it went into a money market fund where it earned a competitive interest rate and was secure. Because money could easily be moved from there to some of the other funds provided by the fund family, plus, this gave us versatility.
Of the $600 that went in each month, $300 would remain there. The 300 also would automatically flow in to three various funds, $100 each and was his investment strategy.
The three funds were: a short term bond fund, an intermediate-phrase bond fund plus a conservative stock fund. He was given mo Re curiosity in the shape of of dividends, which were merely instantly re invested to acquire more shares by the bond funds. The inventory fund offered both dividends (that were also re-invested) and development.
Jack was saving it in addition to investing money. He was ultimately an invest or, accepting a reasonable to reduced le Vel of threat general. As money flowed to his bond funds and stock fund each month from his money-market fund, each $100 obtain would automatically acquire more shares when the price was down and less when the value was greater.
This can be called DOLLAR-COST AVERAGING, and it works to reduce the average cost per discuss. Plus, as the dividends of Jack re-invested periodically he’d accumulate more shares.
There you have it. A savings plan and an investment system all-in-one package that is one easy. Jack eventually permitted me to be a bit more intense in my recommendations and was nonetheless a consumer of mine 20 years later. But he still does not trust the investment business.