Summary
It is important to invest your income wisely. There are three methods suggesting to investing a weekly wage.
- 33% savings, 33% investment, 33% spending
- 25% savings, 50% investment, 25% spending
- 50% savings, 25% investment, 25% spending
The two golden rules of money that someone may ad hear to.
- Always respect the money you spend, save and invest.
- Never spend or invest money that you cannot afford to loose.
Introduction
I have seen a lot of people online wanting to get into crypto currencies. The problem is, they seem to just throw their money at any currency in the hope that it will succeed without having done the correct amount of research. This is gambling, and if you loose you may loose more than just a few months worth of investment. In my opinion, these are some ideas I am thinking about doing with my investments.
Strategies for income
It all comes down to the respect someone has for the money that they own. You worked for that cash, it is yours. With that cash, you need to respect it, and that means being smart with what you do with it. Not just getting on the next band wagon that comes along. Everyone needs a plan on what they do with their money that they own. There are some ideas below of how someone may manage their money. These are shown in Figures 1 - 3. This would apply to someone's weekly paycheck.
Variables
- Spending: What an individual would spend on bills, food, water, expenses, upkeep and shopping. The money left from necessities in this category is disposable income. This includes funds for holidays, trips and luxury items.
- Savings: The money an individual can put aide in a bank account. This is essentially a fund, so when you retire, or you need some money as soon as you can for emergencies, you have that money there.
- Investment: Money an individual can use to invest into projects, such as the stock market, cryptocurrencies, a T-bond or a new venture.
Figure 1
Figure 1 would be more catered to those people who want to balance their investments whilst enjoying more of their wage. This would be people usually who have a good income where they have enough to live comfortably.
Figure 2
Figure 2 is more for people who are keen in investing for the future, who do not mind sending less now for potentially more gains later. This would be adopted by more young people.
Figure 3
Figure 3 is more for people who want to adopt a protectorate funding style. Mostly the elderly or those wanting more cash on hand for a rainy day will take this option.
One thing to note about Savings. During an economic downturn, the people who benefit the most from a recession, are those who have a lot of cash on hand to invest with. If an individual has a lot of savings when an economy goes into recession, they have the opportunity to invest in projects, stocks or items that will survive and grow from the midst of a recession. If someone is willing to invest some of their savings at the end of a recession, in my honest opinion, no more than 50% of savings are taken out. This leads to the two golden rules that, to me, are rules that should always be respected when investing.
- Always respect the money you spend, save and invest.
- Never spend or invest money that you cannot afford to loose.
Even if everything crashes, and you loose all of your investments, you should have enough savings to be able to comfortably start over again. There are too many examples in the world where someone has gone all in with their investment, and to no fault of their own, they have lost everything. If you wanted to cross a weak wobbly bridge to get to the other side of a canal, would you expend all your energy to run across it, running the risk of snapping the bridge? Or would you take your time to make sure you got across, safely, without breaking the bridge.
We may see time as the most invaluable resource we have, but what's the point of the time we have if we do not take care of it?