Sunday, November 20, 2016

Three Simple Rules to Saving Money

There are lots of people willing to give you advice on money. Many of them have something to gain from it while others are trying to give you good advice based on experience. There are three simple rules to saving money that include 1.) spend less than you earn, 2.) understand interest/risk and 3.) . hedge your bets.

1.) Spend Less than you Earn: No matter what you make you will need to spend less than what you earn. If you made $1,000 a week and you spend $800 than you are saving $200 from that period. If you spend $1,100 than your going in debt $100.

2.) Understand Interest/Risk: The higher the risk then the higher the reward. Find investment vehicles that accumulate compounded interest over time and put your money that you saved from spending money into these accounts.

3.) Hedge Your Bets: Try and put money in various places such as your 401K, house, cash, land, Roth IRA, and anywhere else. As the mortgage crisis showed us, find a few different arenas that are not related and spread your money so you don't get caught with no money.

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