So you’ve done your budget, right?
You sure?
That means you know your income and you know how much you need to live on month by month, week by week, day by day, hour by hour, down to the minute.
Haha we joke. But as long as you got a clue.
Well, since you have, let’s look at what we can make work for you.
I’ve been talking to a few of my peers and this is how they’ve manage to come out on top.
My uncle has always been the laid-back type. And after many years of buying shares in companies that pay dividends, he now epitomises it.
“Who’s your phone service provider? Buy their shares. What’s your favourite cereal? Buy their shares. Who’s brand are you wearing right now? Do you have their shares?”
Yep. It’s that simple.
“You’d be surprised at how many companies will return your interest on a monthly basis. But this is a long game. It took me years building my portfolio to see substantial returns on a monthly, quarterly and 6 month basis.
Granted you will need to invest a few thousands just to barely afford your monthly cost of shopping but in time you can get multiple payments a year from companies you’ve invested in. Eventually you’d be wondering if the returns should be for your cost of living or your cost of luxury.”
Do you remember that time when you said I got a couple extra pounds left in the account? I wonder what I should lose it on?
Nahhh, me neither. But I wondered if anybody else had? So I asked my friend.
She recalls her moment; it was 8 months after her new job. After being a struggling freelancer for the past 2 years stacking up debts, rent arrears and being off work for a couple months due to an injury with no insurance and worsening her financial position, she was back at work. “Finally, a paycheck.” I got to breathe again after getting rid of most of her debts and started to save again.
“Someone said to me a long time ago ‘why have savings in the banks when they have a rate of about 2% average per annum when you can invest in the cost of living which averages at 12% per annum’. That’s 10% more return.
The next time I looked at my savings account I actually saw my investment fund.
I was new to it, I started off slow, I guess I was scared of going back to the situation where I just escaped from. But I took the advice, I threw £200 into the matrix and closed my eyes.
index investment is where it’s at. I started with the UK’s FTSE100, then to the USA’s S&P 500, then to India’s NIFTY 50.”
“It’s been a journey of journeys trying to be consistent because life just has a way of happening to your money but you have to be unwavered by the performance and just learn. I particularly like the insights about the many micro influences that impact the overall market.
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Those small ripples make big waves in how your money behaves.”
One of the places I’ve learnt to hold my money was told to me by one of my eldest friends.
“I’m in my mid 20’s, living in a HMO (a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen), earning minimum wage, behind on all bills. No one to turn to. I had to ask myself, ‘How do I help myself?, when do I start?’”
He didn’t come up in a poor household, but a poorer than poor household. Money discussions never ended well between his parents or anyone in his community. But a strong work ethic was developed.
“I’ve always had to work. No problem. But what about my future? There will come a time when I won’t be able to work as I am now. And I can’t be delusional, no way can I trust my kids to take care of me in a state where I may be unable to care for myself.
When you’ve been working as long as you know yourself, you know you need to plan to chill. Chill without worrying about when to return to work and when I can afford to chill again. After facing my carelessness with my earnings, I started to look for ways to be solid for the future. But I didn’t have a clue.”
While he’s looking into different ways to invest, he opened up a credit union account. A credit union has similar services to a bank but aims to serve the community members and not board members.
“This credit union gives me direct access to my cash when I need it, like a bank, but I try to have as much in the account by year end because it pays dividends to its members, like interest on a savings account.
But the credit unions have lower fees and their loans and financial support is easier to access. I also have the option to enter into a monthly prize draw, I never won any of the prize draws but no losses either because it cost nothing to enter apart from you being interested.” Talk about a win win.
“It really serves its purpose while I’m building other investment portfolios.”
