Retire Before 25

“A company is run on cash…”

These words have forever changed the way I think about money. Yes, a business is run on cash and so is your personal life. Far too many people are living on credit instead of cash.

This article will show you 10 ways to save money. They are practical and they work!

1. The Piggy Bank

This is the classic way to save money and you know what? It still works. When I was saving to buy my wife’s engagement ring I had an envelope marked “Engagement Ring”. I would deposit my paycheck each week and hold back a certain amount to stick in my “Piggy Bank” (envelope).

Advantages:

• Cash is immediately accessible
• No risk (of accidentally spending or value fluctuations)
  

Disadvantages:

• Could get stolen / lost easily
• No potential for growth through interest

Summary: This is the single most “liquid” way to save.

Liquid: fluid: in cash or easily convertible to cash; “liquid (or fluid) assets”

2. Money Market Funds

This is the ideal way to save if you are looking to pull your money out in a short amount of time with a potential for great interest and low risk. My personal money market fund can yield as high as 5% interest.

Advantages:

• Low Risk
  
• Potential for High Interest
  

Disadvantages:

• Potential for Low Interest
  

Summary: This is a very liquid asset that is safe and secure and should be used for short-term investments. (1 year or less)

3. Mutual Funds

Mutual Funds are a collection of stocks and/or bonds that you “buy into”. The portfolio is already diversified for you so you don’t have to be an expert at picking the right stock(s).

Advantages:

• Potential for High Growth
  
• Portfolio Already Diversified for You
  

Disadvantages:

• Not Very Good for Short-Term Investments
  
• Hidden Fees & Charges

Summary: This type of investment is good for long-term stable growth. There isn’t a lot of risk in most portfolios but you need to watch for hidden fees and charges or your fund can end up costing you money rather than making more for you.

4. Young Stocks

If you think a company is going to boom, why not invest in it? Imagine if you had purchased WalMart stock when it was brand new. If you see a market trend you might want to consider investing in a young stock.

Advantages:

• Potential for High & Rapid Growth
  

Disadvantages:

• Potential to Lose it All
  

Summary: This is an exciting but dangerous way to save. As they say, the greater the risk, the higher the reward!

5. Individual Stocks

If you like the idea of a mutual fund but want to choose your own stocks for a more personal sort of diversification you will love saving this way.

Advantages:

• You Can Be as Safe or as Risky as You Want
  
• More Diversification = More Stability
  

Disadvantages:

• Time Consuming & Tedious
  

Summary: This is the kind of saving that the “do-it-yourselfer” will love. It is a lot of work but can be quite rewarding in the end.

6. Certificate of Deposit (CD)

A CD is a fixed-term savings account. Your money is secured by the FDIC (that means no risk of loss). Most CDs also have fixed interest rates.

Advantages:

• Money is Guaranteed by the FDIC
  
• Potential for Fixed-Rate Interest
  

Disadvantages:

• Your money is not accessible until maturity
  

Summary: This is another great way to save. Talk to your current bank first, most offer CDs with decent terms and rates.

Maturity: The date a debt or investment must be paid in full.

7. Savings Account

This is what most people think of when they think of saving money through their bank account. Most banks offer savings accounts that you can open alongside your current checking account.

Advantages:

• Funds Are Easily transferable to Your Checking Account
  
• Funds Are Accessible & Liquid

Disadvantages:

• Generally Low Interest
• Watch for Small Usage Fees and Minimum Amounts
  

Summary: This can be a very simple and straightforward way to save money through your current bank.

8. Bonds

You’ve probably heard of bonds as “low-risk and low-growth” funds. This is basically true. The bond holder (that’s you) is the lender and the issuer of the bond is the borrower. Bonds must be payed back at fixed interest rates on fixed terms.

Advantages:

• More Stable Than Most Stocks
  

Disadvantages:

• Generally Low Interest

Summary: Most people seek to diversify their portfolio by incorporating both stocks and bonds. This is typically a good idea.

9. Home Equity (Real Estate)

This is an interesting way to save money. Let’s say that you have $60,000 that you want to save -  you could buy a house and sit on it until the market increases. Turn around and you may be able to sell it for, let’s say, $75,000 a few years from now.

Advantages:

• You’ll Always Have a Place to Stay When You’re In Town!
  
• Quality Homes Retain Their Value
  

Disadvantages:

• Real-Estate Tax, Maintenance, etc. that Cost You Money
  

Summary: All in all this is not a bad way to save some money but it is risky. You never know what the market is going to do, and what if a natural disaster strikes your “investment”?

10. “Way to Save” or “Keep the Change”

Many banks offer unique savings accounts such as Bank of America’s “keep the change” or Wachovia’s (Now Wells Fargo) “Way2Save” account.

Advantages:

• Simple and On-Going Savings
  
• Doing Business With Your Main Bank
  

Disadvantages:

• Different Restrictions & Rules for Each Bank
• Low interest, if any
  

Summary: A simple way to save some extra spending money. Not good for higher amounts of money.

Remember, a business and a life are run on cash, not on credit.

It doesn’t matter exactly how you save your money, just SAVE!

Are you looking to make extra money from home?

Contact: Cody Miller at 214.682.5331 or cody@retirebefore25.com

Hello. Welcome to 2010.

Just 15 days into this new adventure and I feel like the Lord is teaching me so much already. As you know,  I usually try and write articles here on the blog that will either instruct or inspire people. This post attempts the latter.

Here are a few things I want to share with you…

1. Money is not the secret to happiness. If you’re unhappy now then you’ll be miserable with money. Why? Because right now there are things that you want but you can’t afford them. As far as you know these things would make you happy. But the truth is, if I gave you a bunch of money you’d be just as unhappy that day as you are today. You would quickly realize that money is not the magic happiness-maker you once imagined it to be.

2. Don’t think so much, you’ll only wear yourself out. There are certain people out there that seem to think that you can attain great success in life if only you will apply yourself. Just dig a little deeper. Work a little harder. Well, the truth is sometimes we need to be silly. Sometimes we need to do things because they don’t make sense. Science is great but it hasn’t figured everything out yet. Rejoice in the mysteries and wonders hidden all around you. The next time you eat, slow down and try to experience every flavor and texture. Go outside and let the rain consume you. Build a sand castle. Play in the mud.

3. Grow in love. Our world’s greatest need is not oil or electricity or truckers – it is love. Take the time to learn what real love looks like. Read the Bible. (1 Corinthians 13) Love the unlovely and accept God’s great love for you. Bask in the shimmer and glow of true love.

4. Stop trying to force it. Success shuckshmesh. Who really cares? Are you enjoying today? Have you focused on the blessings in your life right now? Are you thankful for the things you have this moment? Be careful not to get lost in future plans. The rest of today isn’t promised. What makes you think tomorrow is? If you achieve it, then you bear the burden of maintaining it. Let the Lord bless you instead. (This is not an excuse to be lazy.)

As you can see, I believe that personal development and spiritual growth are far more important than money or success. Life is a journey. Enjoy the road.

Cheers,
Cody