When you first start earning an income, there are many ways to manage your earnings and expenses, so it might be difficult to weigh your options.
Most people rely on banks to hold their assets, in part because that’s considered a safe option, but also because the average person is not aware of the alternatives. There is also the option of digital wallets, which are becoming increasingly more popular amongst investors and for good reason, as decentralized finance seems to be the future.
Whichever method you think suits you best, you need to know the basics of Smartvesting in order to have a successful journey. Savings are the cornerstone of true financial freedom, so let’s start from there.
The 50/30/20 method
Opening and saving through the 50/30/20 strategy is a popular way to budget. What this means is that 50% of your income (after tax) goes towards essentials (food, rent, insurance, gas), 30% goes to your wants (takeout, shopping, movies) and 20% will go into your savings.
Investments
Along with the savings methods above, you can use the extra income to earn even more through investments, which can help you plan your future or retire earlier. Learning more about investments and achieving true financial literacy is the best way to ensure a stress-free financial future.
Investing your money helps you passively accumulate more money in your savings account. There are many ways you can invest your money. A few common methods include:
1. Investment Bonds
Bonds occur when you invest your money in a company or government entity to help the company. Buying bonds basically means you are investing in a company. You earn more as the company grows so it pays to choose a reputable company to invest in.
2. Stocks
When you buy stock, you buy shares in a company. What this means is you buy shared ownership of the company. Like with bonds, your investment will grow as the company grows.
3. Real Estate
Buying or renting a property is an investment in real estate. Because inflation ensures that property prices keep growing, real estate is seen as a worthwhile investment. You can also buy virtual real estate in the Metaverse, which is a virtual world similar to ours in which people can acquire properties and landmarks (equivalents of the real world) through cryptocurrency.
4. Digital Assets
Cryptocurrencies and NFTs are also popular investments nowadays. Although volatile in nature, with the correct tools and knowledge, cryptocurrencies can provide a reliable passive income. Stablecoins like BUSD have proven to also be stable hedges against inflation.
Learning about investments will help you increase your chances of making good decisions.
What to invest in
Your investment will depend on what you prefer, how much extra earnings you have and the risk you are willing to take. If you are looking for long-term investments, you need patience and self-control. For short investments, such as day-trading cryptocurrencies, you need a lot of time and effort put into the practice.
How to invest in constantly a changing world
Even though the pandemic has passed, the economy is still considered unstable due to various other factors, like the war. Taxes and investment markets go up and down and methods of investment are constantly changing. Using a risk-management strategy will help you know how much to invest and when to stop. It’s always best to do your research before jumping into new investments and be careful of fleeting investment trends.
Now that you know the basics of Smartvesting, you are ready to start your journey towards achieving true financial independence.
At IXFI, we want to help you achieve your financial goals through education. Whether you do your own research or enroll in the IXFI Academy, you need to be prepared to put in the effort in order to reap the benefits.
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Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.
