How to Grow Your Money Twice as Fast: Save More

How to Grow Your Money Twice as Fast: Save More

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

What’s the best way to save, and how much money should you save?

 

As a panelist on the “Money Tree Investing Podcast,” I recently answered a question about how to invest monthly savings. Here’s what I advised:

 

Save more

Before discussing specific investment tactics, I suggested doubling the amount of money the listener was saving. My experience as a financial advisor has taught me that many folks don’t save as much as they can. One common rule of thumb is to save 20% of your income. If you reach that level or more, you’re well on your way to building serious wealth.

 

Choose investments carefully

There are two principles that every investor should follow:

 

1. Keep in mind your time frame: Long-term investors can be more aggressive than short-term investors because they have time on their side to recover from potential losses. Though past performance is no guarantee of future returns, it makes sense for a growth investor to place assets in growth mutual funds, ETFs (exchange traded funds), or managed stock accounts. Short-term investors and other people who can’t afford or tolerate a potential loss should invest in more conservative investments like highly rated bonds, bank deposits, or money market funds.

 

2. Keep in mind your risk tolerance, and invest accordingly. A sound investment portfolio takes into account an investor’s risk tolerance. Only choose investments that correspond to your personal risk threshold. Licensed financial advisors are trained to do risk analysis scenarios with their clients. If you don’t know what your risk tolerance is or whether your current portfolio matches it, meet with a qualified advisor today.

 

Once you have accumulated savings and determined how you should invest, take the next step and open a U.S. brokerage account to help further your financial goals. For resources on how to do this, download the free Profile Toolkit, a guide to opening U.S. brokerage accounts from overseas. Download the toolkit at www.Profile-Financial.com/toolkit.

 

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call [phone] for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.