07 July 2013

Save and Invest is Not, and Should Not be Limited to Rich Singaporeans

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Everybody should save and invest, not just the rich, and one has to balance earning, spending, saving and investing in order to survive the ever-rising prices in Singapore. Most people around me take it easy, but it's because they are still single but once they get married and have children, the weight of inflation will land hard on their shoulders.

I think most people should be doing fine with the earning part, be it through employed or self-employed, it's just a matter of how much each person earns but that's another topic. The most crucial part is spending, some people simply cannot get out of debt because they spend more than they can earn.

The rule is very simple, if you have the money, buy it, or else, forget it. I know purchasing with installment plans sounds like a good idea, but provided the interest rate is 0%, anything higher you might as well just save the money and buy later. Why pay more to buy now when you can pay less if you buy later, especially when most products have a cheapening trend, look at LED TV prices, they came out with a bang, see how cheap they are now.

What if your cash is limited and you have a lot of things that you need to buy? Prioritize. I'm sure a refrigerator is more useful than a TV. I'm sure a washing machine is more useful than a coffee table. List it down and then prioritize all the items.

So you see, if you are going to spend more than you earn, it doesn't matter how much you earn, you'll still be in debt.

Some people ask, "how to save", saving money is easy, actually it's the leftover of your earnings minus your spending, the really tough part is managing your spending.

Savings = Earnings - Spending

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