| October has rolled around again, and we are probably all glad to have gotten past September – “Time to Remember” in terms of the hurricane season. Following that train of thought, in October it should be “All Over”. Of course, Hurricane Lenny towards the end of November 1999 should have taught us all that that is absolutely not true, and that we should always be prepared! In fact it is timely that October of each year is designated “Financial Information Month” so that we can focus our attentions on the need to be prepared for the financial hurricanes that may befall us.
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| In the context of being prepared, “Grow Your Savings,” the theme for Financial Information Month 2011 as designated by the Eastern Caribbean Central Bank, is indeed very appropriate. It is easy to see that the more you can grow your savings, the more prepared you will be to meet your various day-to-day commitments, and even the unexpected challenges that may come your way. So how can you grow your savings? You can put aside a little bit every month and save for a rainy day. If you save $50 a month religiously, after 10 years you would have saved $6,000, and after 20 years you would have saved $12,000. But the secret to achieving even greater growth is to invest the moneys you save, so that in addition to growing the amount saved by $50 each month, you would earn interest on the total sums saved on an ongoing basis. You can invest in fixed deposits, or even if you keep the funds in a savings account, you would let what has been described as “the miracle of compounding” work for you as you grow your savings. This is because you earn interest on both the sum invested and on the interest that that has earned. To manage your money wisely so that something is left over after monthly expenses is good, to save what is left over is better, but to invest is best! Saving accounts and fixed deposits at banks are only a few of the ways that you can invest. You can invest in your own business, or you can invest in the business of someone else. You can invest in a partnership with another person or other persons, or you can invest in businesses which place their shares on the market. Whichever way you do decide to invest, you should first carefully consider the potential rewards, as well as the risk of potential loss on the investment. But remember, nothing ventured, nothing gained! Once again, if you save the returns from investments, you can turn what may seem like small annual dividend amounts into quite a significant sum through the power of compound interest. The longer the period of time that they are invested, the greater the growth that will be achieved.Time is the primary ingredient to the magic that is compounding. These are tough economic times and it’s hard to make ends meet, much less consider saving and investing. Perhaps you are hesitant to even think of investing, as you find it difficult enough to cope with the day-to-day reality of meeting living expenses, loan repayments and other inescapable commitments. However if you plan your finances wisely and cut back on some unnecessary expenses, you might be able to make even small amounts of savings and investments. Making small sacrifices today to save and invest wisely may help you weather the financial hurricanes of the future! So from this October, try hard not to spend until it’s “All Over”. Spend carefully and save the rest, because “To invest is best”. This article was submitted by theMr Timothy A. Hodge, Director, Social Security, Anguilla, as part of the activities commemorating Financial Information Month, October 2011, celebrated under the theme “Grow Your Savings”. |
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