SAVANNAH, Ga. (WSAV) — Inflation is at a 40-year high which translates to life becoming more expensive. From purchasing groceries to gas to get to work, doing everyday things is costing more. Yet, for some, their earnings are not matching the inflation increase.
In spite of any financial season that will come, investing money for the future provides financial security with the potential to build wealth.
For those looking to invest money as they look towards the future, one of the first things that could be done is to invest in an emergency fund. Money set aside in perhaps a high-yielding savings account, provides a financial buffer to any surprise that could occur such as an urgent home or car repair or necessary travel. An emergency fund can help in preventing future debt or from selling off investments. It doesn’t take a large amount of money to start an emergency fund. Tax refunds, cash gifts, rebates, a workplace bonus and even spare change can be funneled into it.
Another step could be to invest strongly in the future by enrolling in a 401(k) or employer retirement plan with an amount that’s not noticeable.
The IRS defines a 401(k) as a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Choosing a Retirement Plan: 401k Plan | Internal Revenue Service (irs.gov)
With a 401(k) plan, employees can choose to defer some of their salary. Instead of receiving that amount in their paycheck, the employee defers, or delays, getting that money. In this case, their deferred money is going into a 401(k) plan sponsored by their employer. This deferred money generally is not taxed until it is distributed.
Even those with very little means could invest in a 401 (k) or retirement plan at around 1% and perhaps after a year, the contribution could increase to 2%, especially if an employer offers an annual pay increase. With every pay increase, aim to make a contribution increase.
Additional investments can allow wealth to grow and generate an additional income stream if needed ahead of retirement.
Author Robert Kiyosaki said, “Some years ago I wanted to get a new Bentley. I could have easily paid cash for the car, but I didn’t want to do that for a liability. Instead, I invested in assets that would provide enough cash flow to cover my new toy. I took a little longer, but six months later my investments created enough cash flow to pay for my car—and some. In the process, I got my fun car and also built my wealth.” Rich Dad Scam #4: Live Below Your Means
There are options for those who would like to make intentional investments to make money such as savings bonds, which adjusts to inflation, which protects investments. Money market accounts are also another option when selecting one that has a high annual percentage yield.
Old school money like simple savings bonds have been around for a while, but they are not outdated. The Series l savings bonds are having a real moment with having a real moment, with a historic rise to a 9.62% annual rate up until October of this year. Individual – Buying Series I Savings Bonds (treasurydirect.gov)
The Series I savings bonds are a perfect choice because it adjusts with inflation, protecting your investment. Simply put, it is currently a safe investment that provides a good return.
The Series I bonds can be purchased at TreasuryDirect.gov, which is operated by the U.S. Department of the Treasury.