Point of view

People chase high salaries in order to get rich, however, does it really make one rich? It is not the high salaries that would make you rich, it is the savings that does the trick.

For example, some child celebrities end up spending all their new found wealth on drugs and other vices and end up penniless, while you have some exceptional cases where a floor cleaner saving 2 dollars a week and investing it end up donating a few million dollars at the end of her life.

So don't fall into the trap of single-mindedly chasing high salaries without thinking of a saving and investing plan.

Risk

Risk is the probability of a loss from an activity. It is involved in your everyday life and also in your finances.

It is good to understand your risk threshold as it would help with your investment decisions.

To start off, it is good to ask yourself these questions to understand yourself better:

1. What is your age - the closer to retirement, it is better to have a good savings
2. What is your current employment situation - without work you need to have a savings that gives you enough returns to survive  
3. What is your net worth - with $10,000 it would be good to keep them in cash for it is liquid as compared to $1,000,000 where some should be invested to give you a better return
4. How much are you invested in equities - with a lot in equities, once again it is about liquidity and having some spare cash enough for a rainy day
5. How would you feel if your investments lose half its value today - some people have a higher risk threshold than others, where they can survive on only $5,000 in the bank while having $200,000 in equities. This person perhaps does not have a lot of other commitments such as a home mortgage and so on.

These are just a few questions of a lot more and it is good to understand your financial standing before investing.

10% Rule

To start off any finance deals, we would need to have money. Hence this first post is a method anyone can implement to get the small sum needed to start off with.

The 10% rule (cited "The richest man in Babylon")

The first step is to make yourself useful by offering your service to anyone who can pay you a salary.

Then, you need to save 10% of your salary every month before anything else. This step is vital because if you do not start off here, you might not have any left at the end of the month. You might give yourself excuses like "Oh I will just save next month, which is coming up soon" and the excuses will go on and on.

The best way to save the 10% these days is to open an online savings account linked to your normal bank account and have a automated transfer on the day of your salary payment.

Start saving today!