Securing financial future - Not too late to start saving
No matter what phase of life you are in at the moment, it is never too late to start saving to secure one's financial future.
From the fresh graduate or newly employed people, to those who have earned income over time, and to those preparing for retirement, there is still time to make that quick financial decision to be consistent about savings to secure the future.
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This was the advice of the Managing Director of Enterprise Trustees, Mr Joseph Ampofo, when he took his turn to discuss how to navigate the three stages of financial life on the Springboard, Your
Virtual University, a radio programme on Joy FM on Sunday, March 8.
He said securing future finances hinged on being committed and also consistent in saving for the rainy day.
“We need to inculcatethe habit of saving and put something down for a rainy day tomorrow. It comes down to financial commitment. I believe that we should inculcate the savings habit in our children.That is where it should start from,” he said.
Mr Ampofo observed that, “for most people, the tendency to procrastinate about savings while earning a lot of income was very
high, but in the long run,the impact of postponing would be felt.
“We keep postponing things we know we have to do. There is a magic in investments called compound interest. If you
put something down every day, over time you will have a lot.We need to be consistent over time with our savings habit,” he said.
Start early
Mr Ampofo explained that it was important for
people at the early stages of their lives to cultivate the habit of putting some money aside based on every income earned.
He said the early stage category included tertiary students, fresh graduates and those in their early stages of employment since they had more time to make some savings, starting early would help them to reap the benefits of the power of compound interest.
“Cultivate the habit of putting something aside in every revenue you earn.You can increase it as your streams of income increase. If you are not consistent over time, the time benefit will beat you,” he said.
He said at that stage in life, the key factors were for one to start, be consistent about it and not be too overly ambitious in setting aside high amount of money.
Take active interest in investment
While urging people to be keen on savings and investments, Mr Ampofo also added that, it was important for people to take interest in where they
invested their money.
In the wake of happenings in the financial sector, he said, it was important for people to read around and get information on the company that it intended to manage their funds.
He said the choice of which fund management or investment company should not be informed by somebody’s referral, but based on sound and rationale decision.
“Call the regulator and find out about the company. Make enquiries and keep your ears to the ground.
“Do not be making investments based on referrals. Demand information on how making investments and take active interest in whoever is holding your money,” he said.
Middle years
This category comprises people who have earned income over time and although it is not too different from the early stages of life, it is important to continue the savings habit, as well as scale up savings to reflect the changes that are occurring over the years.
At this stage, people
should also be interested in finding other alternatives on how to secure financial wealth. “As your earning increases, you increase the amount you set aside.
At this stage, the savings habit has been formed already and you have to maintain it and scale it up to reflect the new conditions.
Mr Ampofo said insecuring financial risks and minimising it, it was important to save for the children, as well as take up insurance cover to help minimise the risk and secure the gains.