In the 16th century, Francis Bacon wrote in essence that any man who wants to do well financially should spend only half of his income, and anyone who wants to become rich should spend only a third. Considering the consumer society in which we live, the weight of taxes and fixed costs related to housing, insurance and others, such proportions are obviously unthinkable nowadays. Following the traditional ira happens to be the best deal in this.
The Right Savings
Despite everything, the Mr. and Mrs. are champions of savings. If we are to believe the Federal Statistical Office, 9% on average of gross income is devoted to forced savings (AVS, LPP), 8 to 10% to forms of voluntary savings. However, the differences are significant and many individuals fail to put anything aside despite having high incomes. The fact is that few of them have proper budget planning, at the same time exposing themselves to the risk that unforeseen events such as loss of income, illness or private problems quickly lead to deterioration of their financial situation. For that you can know now what is an ira now.
- Within a private financial strategy, objectives such as sufficient liquidity, security, risk coverage, family planning, training, home ownership, retirement provision and return on investments in particular lie in the foreground. These goals should be subdivided into short, medium and long term goals, and be coordinated through corresponding savings or capital. By setting up a savings process, goals such as home ownership, a major purchase, parent / child training or retirement planning can be achieved more quickly.
The Rules to Follow
The general rule is that one has at least three to five monthly salaries in the form of cash in salary and savings accounts. Although their remuneration is low, in this case it is a question of meeting a need for security and availability. If a large acquisition (the purchase of a car, for example) is planned in the next twenty-four months, more cash should be planned. This is where medium-term savings come in, which makes it possible to avoid leasing or consumer credit. The two types of credit are indeed problematic insofar as they push individuals to expenses unrelated to their income. Achieving medium-term goals is often no longer possible.
An investment horizon of five, ten or fifteen years makes it possible to choose more profitable forms of investment. Depending on the amount saved monthly the expert manages, after a few years already, to acquire his own home without resorting to the assets of his pension fund and, in terms of budget, he achieves one of the best financial optimizations that is. Likewise, the “cost average” effect makes it possible to take advantage of market volatility and invest under advantageous conditions during a market downturn. These flexible savings products help individuals to achieve their medium-term goals in a disciplined manner.