Friday, 22 August 2014

Saving, Investments and Retirement.

Save! Save! Save! So we hear from every corner since we were young. But nobody actually goes deeper into explanation about this and its benefits. We still have a large number out there that is not sure about what the future looks like for them. Life is all about the present, they argue, and right they are. Life is about what you do in the present. You cannot of course travel to the future or the past to enroll into a savings plan. It all happens in the present. You can only start your savings plan TODAY.

So let’s take it you are actually interested in saving and securing your future, there are a lot of things being said out there you cannot actually sort the real diamond from the fake. Worry not, today I serve you with a number of retirement/saving myths to dispel. But before we go further I know in your mind you have already read the word ‘retirement’ and you are about to close this tab. I assume  most of my readers fall in the age bracket of peeps who have just began enjoying their salaries or are just about to finish college and are also liking the money they get from side hustles. Well, I am not mistaken, this is certainly for you and yes you read right, Retirement.

 Do not close the tab, read on.

Retirement? At my age? That is the first and most common of myths.

You are too young to start saving. Wait.
Well, waiting does sound like a good idea, right? What with all these things, that life has to offer. Waiting sure does sound like a million dollar idea. But what are we waiting for? When we settle down and suddenly have all these responsibilities that pop up every other day. Suddenly, you are supposed to pay school fees not only for your child but also for your relatives’ child. Having a savings plan as early as you start your first job is a good way to have a strong secure future.

Look at it this way. You enter the job market very confident. You enjoy life. You settle down. You have no worries but you are living in a rented house; you pay all your bills in time. You pay your children’s fees on time. You are eating well. You have all these flossets with you, a good car, and expensive phones and are always visiting a new place every weekend. Great. Having fun is a good thing. Do not deprive yourself such that you become depressed which leads to overspending somewhere else. But then, you leave the workforce, you had no savings plan. So what happens next? Save and invest as early as you can.

You cannot start saving/investing until you make a certain amount.
This really pinches. It is always painful to make sacrifices with the little you have so you convince yourself you will begin doing it when you reach a ‘certain amount’. Start with the little you have and this not only trains you, but will benefit you in the long run. Just remember as you move up the ladder, increase the amount you are investing/saving



You will spend less after you retire (quit job)
Apparently, it has been observed that people spend more after retirement because all of a sudden you have this time to yourself and remember all those hobbies you could not enjoy due to your working schedule. You want to kill time by doing a little bit of this and a little bit of that, so banking on spending less after retirement might just not work very well for you.

Social security will take care of you.
I remember once overhearing two young men talking about NSSF. They had all the facts right apart from one part that had me raising an eyebrow. They believed that was all they needed to be safe. Well, social security is actually a safety net but not entirely a retirement foundation plan.

My Inheritance will take care of my retirement.
Unless your parents are incredibly rich, get yourself a savings plan.

My spouse will take care of my retirement plan.
Women are notorious for this (I’m just saying). Anyway, as much as it is a good bet, it is not a sure bet.

These are among the few of the myths around about saving/investment. Money conversations can be sensitive, full of misconceptions and full of important decisions. It is never too early to invest and never too late to start a plan, but one thing is important, no matter what you do, have a future financial security plan.

Follow @octagonafrica on twitter to engage in more conversations about savings and retirement.

Happy savings.
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4 comments:

  1. i was the 'waiting type'. no.matter how small it starts...it will b worth it in the end

    ReplyDelete
  2. Replies
    1. Thank you Alvin. I appreciate your readership too:)

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