Tips on saving money

[burglar]

If I don't need it I don't buy it ... until recently!!

I went on a spree of window shopping with a friend!
To my own amazement I enjoy retail therapy
and bought some stuff I really don't need.

Am I trying to justify it?

:

 

[Mr Wilson]

I'll keep my opinion fairly simple,

Create a expenses chart to find out what you are spending your money on,
Review your expenses and ask your self " Am I happy with my spending habits?"

Create a budget with this new information and stick to it !

Always pay your self first- (anything that contributes to you'r asset column)

-Pressure to pay outstanding bills and to keep people off your back will give you the drive to find new ways to make more money-

Save regularly- Work on putting away a percentage of your pay every week, Increase this percentage over time,

(Money likes to be were it's loved most, and can be used most effectively)


I think that might relate more to making money then saving money
but they both build from the same principles and foundation.

Hope this helps

 

[young-gun]

Mr Wilson
Re: Tips on saving money

I'll keep my opinion fairly simple,

Create a expenses chart to find out what you are spending your money on,
Review your expenses and ask your self " Am I happy with my spending habits?"

Create a budget with this new information and stick to it !

Always pay your self first- (anything that contributes to you'r asset column)

-Pressure to pay outstanding bills and to keep people off your back will give you the drive to find new ways to make more money-

Save regularly- Work on putting away a percentage of your pay every week, Increase this percentage over time,

(Money likes to be were it's loved most, and can be used most effectively)


I think that might relate more to making money then saving money
but they both build from the same principles and foundation.

Hope this helps

Did you put down rich dad poor dad to write this post??

regardless of whether you did or not you're absolutely right. Saving money to let it sit there and accumulate is for suckers. Money should be put to work asap. I'm not referring to someone who has 6 mill in the bank and lives off the interest.(although there is a hell of alot more money to be made off 6 mill than a term deposit, but some people prefer the safety).

I save money for only a few reasons.
- a holiday
-to accumulate enough to invest a sizeable amount into something rather than putting a few hundred dollars in drips and drabs into something. eg a deposit for an investment property(simply an example, not saying I would atm).
another example is you need to buy a minimum of $500 worth of shares through comsec.
-as a SMALL buffer for thigns like car troubles services maintenance and rainy days.

anything else should be put to work imo.

 

[Julia]

Did you put down rich dad poor dad to write this post??

regardless of whether you did or not you're absolutely right. Saving money to let it sit there and accumulate is for suckers. Money should be put to work asap. I'm not referring to someone who has 6 mill in the bank and lives off the interest.(although there is a hell of alot more money to be made off 6 mill than a term deposit, but some people prefer the safety).

I save money for only a few reasons.
- a holiday
-to accumulate enough to invest a sizeable amount into something rather than putting a few hundred dollars in drips and drabs into something. eg a deposit for an investment property(simply an example, not saying I would atm).
another example is you need to buy a minimum of $500 worth of shares through comsec.
-as a SMALL buffer for thigns like car troubles services maintenance and rainy days.

anything else should be put to work imo.

Could you share with us all those ways you consider money is "being put to work".
eg if I have $100,000 sitting in the bank, what should I do with it and why?

 

[MrBurns]

Could you share with us all those ways you consider money is "being put to work".
eg if I have $100,000 sitting in the bank, what should I do with it and why?

Anything other than in the bank is a gamble, especially in these times.

Telstra shares perhaps but even then, a gamble.

 

[Mr Wilson]

Could you share with us all those ways you consider money is "being put to work".
eg if I have $100,000 sitting in the bank, what should I do with it and why?

I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you,

From online selling of domain names ,advertising, direct shipping, Ect.
Or could purchase Items then rent them out, Buy antique's Ect.

The best thing to do is find the thing you love and invest in that,
That way you will never work another day in your life,

 

[MrBurns]

I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you,

From online selling of domain names ,advertising, direct shipping, Ect.
Or could purchase Items then rent them out, Buy antique's Ect.

The best thing to do is find the thing you love and invest in that,
That way you will never work another day in your life,

If you sell domain names I have 40 I'll be selling soon.

 

[gav]

I recently read "Millionaire Next Door" and discovered that for many households, the number one expense is tax. I thought to myself "yeah, maybe for upper-middle class income earners and above. Out of curiosity, I did the math and discovered that my partner and I pay more in tax than on our mortgage! I couldn't believe I hadn't disovered this earlier.

If you haven't read "Millionaire Next Door", then I suggest you do. My partner and I are quite frugal, but seeing the stats on the spending habits of those studied in the book was quite fascinating.

 

[Mr Wilson]

If you haven't read "Millionaire Next Door", then I suggest you do.

Thank's Gav I'll give it a read,

 

[Ageo]

Problem I have with the saving concept is that it's capped, no matter how hard you try there's always a limit unlike earning which is unlimited.... I tend to focus on the making more than I do on saving

 

[Julia]

I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you,

From online selling of domain names ,advertising, direct shipping, Ect.
Or could purchase Items then rent them out, Buy antique's Ect.

What I was looking for is some proof that such activities are actually going to make money.
Perhaps you could give some examples of exactly how $100K can make X% over X years by which method.

The best thing to do is find the thing you love and invest in that,
That way you will never work another day in your life,

OK, right. So you're saying it's axiomatic that as long as we are loving what we're doing it's going to make us rich. Tell that to all the struggling writers, composers, wannabe anythings!
It's a lovely, romantic thought but less than correct in most cases. The sort of cliche which sounds wonderful but has little practical basis.

 

[Mr Wilson]

What I was looking for is some proof that such activities are actually going to make money.
Perhaps you could give some examples of exactly how $100K can make X% over X years by which method.

Correct me if I'm wrong because I some times am, but It sound's to me like you are asking for a Strategy to invest your $100k?

OK, right. So you're saying it's axiomatic that as long as we are loving what we're doing it's going to make us rich.

No but when you are doing what you love wont mind working 60-80 Hrs a week perfecting it and making it work so it will become profitable, Dreams Don't Work Unless You Do


"The biggest reason for failure is because people give up to early and have not yet decided to become successful"

I hope this helps you see things from my view point,

 

[Julia]

Correct me if I'm wrong because I some times am, but It sound's to me like you are asking for a Strategy to invest your $100k?

No, I'm not personally looking for any financial strategies. I have enough.
I would just like it if people - instead of putting up vague motherhood statements about how to make money work - would give some actual practical examples of what is achievable.
I don't mean to be singling you out here, especially as you're so polite, but in today's world airy fairy stuff just doesn't cut it imo.

I hope this helps you see things from my view point,

I understand your viewpoint. I simply question its practicality.
Thank you for responding to my post.

 

[Mr Wilson]

No, I'm not personally looking for any financial strategies. I have enough.
I would just like it if people - instead of putting up vague motherhood statements about how to make money work - would give some actual practical examples of what is achievable.
I don't mean to be singling you out here, especially as you're so polite, but in today's world airy fairy stuff just doesn't cut it imo.

I think the problem might lie in the complexity of the question,

You could by 4 cars at 25K each, Hire them out at $35 a day, It would take Just under Two years if you were booked out every day to make your money back.

You would have to factor in running cost's wages insurance, ECT
Lets add another year for good measure to cover all other costs.

After the first initial 3 years you would be creating $51100 a year profit plus the assets.
I'm not sure what the ratio would be, But does this cover for an example?

More to the point am I off the Hook?

 

[sptrawler]

Investment returns are usually proportional to risk.
Risk is usually proportional to the ability to replace lost capital.
Therefore rational investment return, is a function of the investors ability to replace lost capital and their risk averseness.
For example many will put their money in the bank for a return of 6%, yet won't buy shares in the bank for a return of 6% with an added franking credit.
This is magnified in a super fund paying a pension, $100,000 gives $6000 on the example term deposit. Yet gives $10000 in dividends, however the share price could drop and would no doubt result in lower dividends.
However the franking credit means the dividend has to drop 30% to equal the term deposit.
On the other hand the $100,000 on deposit has little chance of capital gain, but will depreciate by inflation.
This is just general chat and not meant to be any sort of guide etc.

 

[Julia]

I think the problem might lie in the complexity of the question,

You could by 4 cars at 25K each, Hire them out at $35 a day, It would take Just under Two years if you were booked out every day to make your money back.

You would have to factor in running cost's wages insurance, ECT
Lets add another year for good measure to cover all other costs.

After the first initial 3 years you would be creating $51100 a year profit plus the assets.
I'm not sure what the ratio would be, But does this cover for an example?

More to the point am I off the Hook?

Yep. I have no idea whether - when you offset depreciation, rego, etc - it would be profitable, and you're assuming having the cars rented out all the time, but you've come up with a real example and made me laugh so good on you.

 

[young-gun]

Could you share with us all those ways you consider money is "being put to work".
eg if I have $100,000 sitting in the bank, what should I do with it and why?

I jumped the gun a bit there. It obviously comes back to everyones personal goals and aims. Personally I think every cent you have in the bank as a form of 'investment' then it is a complete waste of time. With inflation well above the quoted 2-3% you would barely be staying ahead of the game.

I personally am very aggressive and enjoy risk taking(while remaining as educated and informed as possible about my decisions), and currently invest in gold and silver and highly speculative stocks, with little money in the bank. Yeah ok you can argue that money in the bank is far safer and a guaranteed return, but that sort of thinking isn't going to make you wealthy. Unless you have 5 mill + sitting in the bank, in which case it still wouldn't lead to HUGE amounts of money coming your way. Ultimately building a business and owning property(buying at the right time**) are my personal goals.

To answer your question if I had 100k spare I would look for business investment opportunities(and buy silver). I can't tell you exactly what as I don't know just yet. Gotta be fairly careful at times like this as to what business you enter into etc. We've already started a small(hopefully going to be big) business that required relatively small capital outlay, and requires little work now that its running. This is simply my opinion and what I would do.

Alot of people are cautious and don't feel safe with their money anywhere other than the bank and the measly returns which is fine. However if people are complaining they want/need more money and still leave their money in the bank, then I believe that puts them into the same category of people who don't take notice of their super nor spend the time researching and reading to gain the confidence required to DO SOMETHING, and make money or prepare for retirement, as we have previously discussed.

Main point - interest from a bank account is never going to make anyone rich or wealthy, and tbh it bores me.

 

[sptrawler]

O.K young gun, how about if you were 67 years old and had $1m, put it in the bank at 5.7% or buy silver?
$57,000 to live on or 1000kg of silver that you can't eat, can't take to the shop to buy food and hope it doesn't tank.

Would you be as cavalier, even if you were 35 years old and had $1m but had just been made redundant.
Would you jump in and buy silver or would you put the $1m in the bank at 5.7% and look for another job.

Life's great when you don't have to rely on your decissions to live on.

 

[Julia]

O.K young gun, how about if you were 67 years old and had $1m, put it in the bank at 5.7% or buy silver?
$57,000 to live on or 1000kg of silver that you can't eat, can't take to the shop to buy food and hope it doesn't tank.

Would you be as cavalier, even if you were 35 years old and had $1m but had just been made redundant.
Would you jump in and buy silver or would you put the $1m in the bank at 5.7% and look for another job.

Life's great when you don't have to rely on your decisions to live on.

Exactly. And when you don't need to rely on your capital to generate a living.

 

[sptrawler]

Investment returns are usually proportional to risk.
Risk is usually proportional to the ability to replace lost capital.
Therefore rational investment return, is a function of the investors ability to replace lost capital and their risk averseness.
For example many will put their money in the bank for a return of 6%, yet won't buy shares in the bank for a return of 6% with an added franking credit.
This is magnified in a super fund paying a pension, $100,000 gives $6000 on the example term deposit. Yet gives $10000 in dividends, however the share price could drop and would no doubt result in lower dividends.
However the franking credit means the dividend has to drop 30% to equal the term deposit.
On the other hand the $100,000 on deposit has little chance of capital gain, but will depreciate by inflation.
This is just general chat and not meant to be any sort of guide etc.

Exactly Julia, people who have limited ability to replace capital are risk averse.
Re reading the post, it wasn't very clear.
Buying shares in the bank for dividend, tends to give a better outcome than a term deposit, in the same bank. sorry