The Way of Saving

I would like to share my opinion on how to save the right way. A lot of people who are not financially educated will have this misconception about saving in the bank. It's not wrong though, we've been brought up this way, remember when we were still a child our mummy or daddy will bring us to POSB to open an account for our saving. We've been taught on how to put money into our piggy bank and then at the end of the year or after Chinese New Year after we've collected our Ang Bao money and then they will consolidate all our savings and put it into our bank.. As a young and innocent child we obey our parent and let them put our money in the bank. They wanted us to know how to save and the important of saving and also at the same time drill this into our habit. I must say for many many years i didn't develop the habit of saving. =X

However, this doesn't apply now what we need to do is to be able to tell the differences between MONEY and CURRENCY if you save MONEY in the bank then GREAT remember what I mentioned in my previous post? MONEY MUST HAVE STORE OF VALUE which means after putting your money in the bank the value of the money is still the same be it 10 years 20 years 50 years or 1000 years. But the world doesn't work this way all the dollar we have now is nothing but a piece of paper which doesn't have INTRINSIC VALUE. Let me ask you would you rather save a piece of paper that doesn't have a value? or would you want to save on something that has value?

Not only that the most important word you have to look out for is INFLATION, INFLATION for year 2012 is 4% which means value of your dollar has decrease by 4% and for simplicity 4% X 10 years = 40% which means a dollar now worth only 60cent in the future WHAT THE.... some people might say bank got give interest WHATttt YUP you're right they give you interest however it only gives you a pathetic of about 0.55% you do the math I'm gonna laugh at you if you think this 0.55% is a lot and think this % can help you retire. So don't ever tell me to save my dollar in the bank I'm gonna burst out laughing. HAHAHA (No offense, I'm just kidding). What i want to emphasize that DO NO SAVE YOUR DOLLAR IN THE BANK ONLY SAVE FOR RAINY DAY what i mean is that only save 6-12month the amount of expenses depending on your age for me I'm 25 this year i personally save only 1month of my expenses and I will invest the rest be it shares or precious metal. To me they're the best SAVING plan, that's just me. Some people have their own saving plan or strategies, there are no right or wrong as long as you don't lose money you're right. Remember Warren Buffet's quote "rule no.1 don't lose money, rule no.2 never forget rule no.1".

My 3 rules
1st: educate yourself,
2nd: plan and manage your finance well,
3rd: delay gratification

Last but not least  Your Greatest ASSET is neither your car, your house nor your dollar in the pocket. It's YOU and YOUR MIND! so please take good care of your ASSET and Stay Healthy Stay Wealthy.