Here is an article I found on one of my old USB sticks. Thought I would repost it if you have not seen it yet.
Investing-Making a start
You do not have to be rich to invest but you need to invest to be rich.
The key to developing a financial plan is to make a start irrespective of your financial position. So many people just want to bury their head in the sand and carry on as they have been doing for years, living from one payday to the next. Their only hope of getting ahead financially is to win the lottery. You can only start from the present irrespective of your financial situation. A savings plan starts with just the first dollar which you save. If you have absolutely nothing from your pay day each week and save one dollar this week then you are financially better off this week. Saving money becomes a habit and it is a habit well worth developing because in the long run it will make things easier for you. Think of your money as a seed, you have to sow it before you can grow it. People tend to come up with all kinds of excuses for not saving for their future. There is always something which has more priority, a new television, a holiday, debts etc.
In short such people are professional procrastinators when it comes to saving money, it is always something they intend to do in the future but never get around to it. Saving money or spending money becomes a habit and they are habits which will result in consequences decades from today. It is all very well saying “You can’t take it all with you” (when you die) but leaving your family in financial trouble when you die is irresponsible and selfish. You will reap what you sow therefore in order to reap a financial harvest when you retire, you need to sow into your retirement fund.
Developing the savings habit when you have been a spender all your life is going to mean developing new habits such as doing without rather than borrowing for items you do not need and buying from thrift shops. It will take will power on your part, many people just do not have will power and will spend whatever is in their bank account and when the power, phone, or rates bill arrives in the mail, they don’t have the money to cover it.
Setting up a retirement fund is a great idea for building up a future nest egg for your retirement years. The money is left to accumulate where you have no access to it which removes the temptation to spend it.
Money gives you options
Even if you had just one thousand dollars saved up you have more options than the person who has no savings at all, the person who has ten thousand dollars saved up has more options than the person who has just a thousand dollars saved. Options in terms of where to invest the money, where to holiday, and whether they can afford to move to another town for a job.
Advantages of joining kiwisaver
If you are wondering what advantages there are in joining kiwisaver then here are the main ones.
1–There are the $520 per annum tax credits. In order to gain the full amount of tax credits you must contribute at least $1,040 per annum to your kiwisaver account.
2-The employer contributions, this is at least 3% of your gross wages.
Other advantages are;
3-Having your funds locked away until your retirement removes the temptation to spend your savings.
4-Income received from your kiwisaver account will not be assessed as income by WINZ if you lose your job and are going on a benefit.
5-Having your money locked away prevents family members or so called friends from taking advantage of you.
Employees have the choice of whether to contribute 2%, 4%, or 8% of their gross wages into kiwisaver.
What happens to your kiwisaver fund if you die before you reach 65?
Your money is allocated to your estate in accordance with your last will but the government’s contributions will return to the crown. It is important for you to make out a will otherwise any money belonging to your estate could be reduced by legal fees and leave your heirs financially worse off especially if there is not enough money in the kitty to pay for your funeral. It is all about being responsible about your finances.
The question should be “How will I fund my later years if I am unable to work?”
Kiwisaver could be your answer. Making provisions for you in later years is the responsible thing to do and kiwisaver is an excellent tool for achieving your financial goals.
www.robertastewart.com
