2009 Saving Stratergy -Turn £1.80 into £300

2009 Saving Stratergy: Turn £1.80 into £300

Thu, Jan 15, 2009

This is a guest post by Hanna Kassis who writes for College Finance 101 based in the US, enjoy!

Try the following savings strategy in the new year and you’ll be glad that you did. This is one resolution you might want to consider.

Start by saving approximately £1.80/day through June 30th. If you average putting away this much money each day for the first 6 months, you’ll be very close to £300. Now there are four things you can do with £300 quid. Spend it, save it, invest it, or donate it. If you decide to save/invest, you have several options:

For the low-risk savers

Take it to the bank and put it in a certificate of deposit. The economy may get worse before it gets better, and interest rates may continue to rise due to liquidity constraints (though the cut in interbanking interest rates not too long ago, both help banks get new greenbacks). If you put £300 in a bank account @ 3% for 6 months, you’ll earn more money for doing absolutely nothing. With interest rates so high, many online banks have higher interest rates than your local banks in simple money market and savings accounts. Don’t forget to look into these.

For the moderate risk-takers

Invest in a mutual fund. Mutual funds are a great way to diversify your investment, so long as you don’t give all your money to one broker. The best part about mutual funds is if a company within the fund tanks, you don’t take nearly as big of a hit compared to if you just owned that company.

For the risk-takers (within reason)

Invest in the stock market. Risk definitely varies depending on what kind of stocks you invest in and how much time you put into investing in specific companies. Just think, Warren Buffet doesn’t have any uncertainty when investing in a stock. The greater the knowledge of the company and certainty with which you invest, the less risky an investment is. Plus, stocks pay nice dividends, too

For the Risk Lovers

One word for you: Forex. Forex stands for foreign exchange (of currencies) and can be extremely lucrative. But remember, the more money you have the opportunity to make, the more money you can lose. Currency trading is extremely risky, but there is a science to it. If you can put away £150-£300 and you’re willing to put it on the line, currency trading is for you. With loss limits, you can avoid losing all your money, and honestly, you’re bound to make some money. Currency trading is beyond the scope of this article, but a great place to learn is Baby Pips, as well as understanding the fundamentals.

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