Posts Tagged ‘Investment’

Saving or Investment?

If you and your husband is currently thought to plan for the child’s education funds or retirement funds, how what you choose? Saving or investing?
For example, college tuition plans one child in a period of 18 years. Because college costs are always rising due to inflation, you need to set aside Rp 3.5 to Rp 6 million per month in savings. This fee shall be excluded from your income and the husband, outside of other routine expenditures. Try calculations, if you and your husband have this capability?

Saving money will not be enough because of inflation. The solution is an investment with long-term risk, over 10 years. Saving can be done for short-term needs, four years. For example the preparation of kindergarten schools. But when it comes to higher education, it takes a bigger budget, taking into account the inflation rate every year.

Cost inflation rate of kindergarten education could reach 20 percent per year. Inflation rate colleges rose an average of 15 percent per year. Although there are schools that low inflation rates, but remained high entrance fee.

Inflation became the main consideration why investment makes out a financial solution. This also applies to the preparation of the pension fund. Because if you rely on savings for retirement 25-35 years, it is necessary to USD 75 million – USD 135 million per month. This amount is too large for savings, right? It was no ordinary employee salary was sufficient.

If aged 25 years, by investing USD 587 000 per month you prepare for retirement easier. For the age of 35 years, you can invest USD 2 million per month. Both have the same target investment return of 25 percent per year.
Investing is risky, but risk can not invest more than the investment itself. Risk can not be 100 percent avoided but can be arranged. Investment is to be measured, from its purpose, risks, and investment results. Therefore the purpose you want to invest becomes important. Set a goal now, make financial planning, and select the right investment, if you do not want your money worthless in the future.