You’ve heard a lot of times that saving money is good and you should save a certain percentage of your salary/income for the future. But what if you are saving with no plan in mind? Yes, you’ve saved enough to cushion you from future unforeseen circumstances like a job lay off or medical bills, but what of the extra money?
When entering a savings plan always have an exit plan ahead. What is your savings goal and what do you intend to do with the money in the future?
Do you plan to start a business? Invest in stocks? Quit work and be an entrepreneur? All these are investment choices that you should at least have in mind when entering a savings plan.
Let’s be realistic. Money that is not planned for will most likely be spent. Maybe you are out walking and you find yourself impulse buying random things. Or one of your friends comes with an financial problem and you find yourself lending him money in the hope that he returns it back but he doesn’t.
Sooner or later you find yourself having exhausted a large chunk of your personal savings just because you didn't have a solid exit plan to begin with.
Saving is good but do also have an exit plan in form of an investment.