How To Find The Money To Invest
By: Abinas Jagernauth
Tags: Money, Stocks, Investment, Investing, Stock Market

Those who spend too much will eventually be owned by those who are thrifty. — Sir John Templeton

Many people say they don’t have the money to invest. And yet, I see those same people spend what money they do have as if money were going out of style.

Here are a few ideas to consider if you’re really serious about investing, and having a secure financial future.

Open a savings account. If you already have one you are miles ahead of most people. And if it has $1,000 or more in it you are light years ahead of the majority.

If you already have one you are miles ahead of most people. And if it has $1,000 or more in it you are light years ahead of the majority. Pay yourself first. Every time you are paid or receive income, deposit some of it into your saving account. To do this without even thinking about it, arrange for your bank to automatically transfer the amount you decide on from your checking to your savings account, on a specific date every month. Begin with an amount you feel comfortable with and increase it bit by bit as your income increases. You can also deposit amounts directly into your savings account any time you so desire.

If you are really serious about saving, save 10% of every paycheck and live on the rest. Save more if you can. In other words, save first. Most people save what is left over. Those who are serious spend what is left over, after saving.

Reduce or eliminate expenses. It can be done. Make a list of your expenses. All of your expenses. What can you reduce? What can you eliminate? Yes, eliminate. Here are a few expenses to consider reducing or eliminating:

How much do you spend daily on coffee? Are you one of those people who go through the Starbucks drive-thru for your morning caffeine fix? And how many times a day after this fix do you again buy coffee? Can you reduce the number of cups of coffee you buy each day? If you can, how much would you save per day?

Do you go out for lunch every day? What is this costing you? Can you brown bag it? If you do, how much would you save per day?

Do you smoke? How many packs per day? What is your daily expenditure on cigarettes? How much in taxes do you pay on each pack of cigarettes? I smoked. The taxes I paid per pack motivated me to quit. That was thirty years ago.

How much can you save per day if you buy fewer cups of coffee, pack a lunch, and smoke less or quit smoking altogether? How much is that per week? Per year?

Let us assume for a moment that your daily savings are: coffee $10, lunch $15, and cigarettes $10. You will then be saving $35 per day.

Monthly savings = $35 X 30 days = $1,050.

Annual savings = $1,050 X 12 = $12,600.

Amazing how a few bucks a day adds up to thousands in a year!

Socializing and eating out. How often do you go out with the gang for a drink? Every week? What is this costing you? Can you cut back in this area? Can you reduce the number of times you eat out?

How often do you go out with the gang for a drink? Every week? What is this costing you? Can you cut back in this area? Can you reduce the number of times you eat out? Use public transit. In many cases owning a car is a luxury. Gas, insurance, car payments and maintenance can run anywhere from $5,000 to $10,000 or more per year. Of course, it will be a lot less if you drive a good used vehicle for which you paid cash. Paying cash will eliminate the car payment which includes interest. If you own a car and want to keep it, use public transit whenever you can. At a minimum you will save on gas and maintenance.

Using these ideas alone could easily save you a minimum of $13,000 to $15,000 a year. That’s in one year!

What to do with your savings.

Use your savings to pay off your high-interest debt before you start investing. What is the interest rate on your outstanding credit card balance? If you have a balance on your credit card, pay it off as quickly as possible. Think about this — if all you do is pay the monthly minimum amount due on your credit card, you will never pay off the total amount due. And your bank or credit card company will become richer and richer, while you become poorer and poorer.

One way to pay off your high-interest credit card debt is to get a line of credit at your bank and use that to pay off your credit card balance. Then pay off your line of credit. The interest on a line of credit is lower than the interest on a credit card.

One more thing. Stop using your credit card until you have paid off your line of credit, and after that, pay off your credit card balance every month.

I hope you find these ideas helpful.