The ability to save efficiently and sustainably is the magic wand with which we can achieve our goals and dreams, and the many ways we can do it give us the choice of which option is best for each of us. Investing is one of the most influential and sustainable ways to save and grow money.
So, we invited Natalia Nașco Filimon, Head of Cards at maib, to offer tips to help adults develop their financial organisation skills and meet their financial goals.
A valuable tool in this regard are investments, which can be divided according to personal goals in the following way:
- Emergency fund. The emergency fund is the first step to be taken before investing and is a safety net in case income disappears or falls substantially.
The emergency fund should include financial sources for at least six months of essential expenses. As an amount that needs to be accessed quickly, it should not be invested in risky instruments. 20% of the emergency fund should be in a savings plan you can access quickly, and 80% should be in bond funds or other low-risk financial instruments.
- Short-term objectives. Regarding short-term goals, we must choose our investment types carefully because their riskiness decreases the longer the investment period. Focusing on the security of the investment/saving is good in the short term because we will need it quickly. Suitable tools can be bank deposits, savings or low-risk investment accounts.
- Long-term objectives. These include buying a home, developing a business or earning extra income for 5 to 10-15 years. Long-term investments can consist of medium-risk tools such as investment funds, stock market investments in shares, corporate bonds or less well-known tools such as crowdfunding. These investments require greater knowledge, and taking the time to study and understand the sub-aspects is recommended.
- Very long-term objectives. Even if we are young, the thought of retirement must come up in our discussions. Regardless of the job we do and the security we have, investing for retirement must be a priority for each of us. We can also discuss risky investments if we talk about long-term investments. These tools include investment funds, direct stock market investment in different companies or indexes, gold investment, or even real estate investment.
- Be a responsible investor! It's good to know that the profit you want can come if you think long term and investing only part of the money you put aside is good. Investment funds are not deposits, and the value of your investments is not guaranteed. It may rise or fall depending on how the financial markets develop. Previous investment fund performance is no guarantee of future performance.
