A Penny Saved
Late, one cool Autumn day, a small nest of Ants were collecting dried grain they intended to store for winter when a hungry Grasshopper came along. His head bowed, and his fiddler under his arm, he humbly asked the Ants if he could have some of their grain to eat.
“Haven’t you gathered any food away for the winter,” one Ant asked in surprise, “What have you been doing all summer?”
“Well,” the Grasshopper began, “I was so busy making music I didn’t store any food away. Before I knew it summer was over.”
Pitying the foolish Grasshopper, the Ants shrugged their shoulders as they could not help him.
“Making music were you,” another joked, “Very well. Then dance!”
And the Ants went on their way.
Aesop's fable clearly illustrates that there is a time for work and there is a time for play. The Ants in the story got it right. They enjoyed summer but had clearly made provisions for the coming winter time. The Grasshopper was too busy having fun to store anything away for a rainy day.
Which character would you consider yourself? The diligent savers working towards a future or the big-spender recklessly living in the present.
Saving is your key to financial independence and eventually building up wealth. It’s important to get into the routine of putting a portion of your paycheck away at the end of each month. Not only will you have a cash reserve if unforeseeable circumstances arise in the future but you also have a little freedom to invest your money if you so desire.
It is recommended that three months salary be what you have saved in cash. Once you reach and exceed that you can explore your options of investing in stocks, bonds or property.
Plant your money and watch it grow.
Yacht crew find themselves in an advantaged position. Whilst working a season your room and board is covered. You literally don’t have to worry about paying for anything for the 2+ months you’re on board and you still get an impressive salary (plus tips) when you dock. This makes saving and investing effortless. But for first time investors the endless options and possibilities can be quite daunting. There are a few things to consider before deciding where to place your money.
Budget: It’s important to gauge how much of your earnings you can afford to put away. A thorough assessment of your expenses must be done to determine what is available. Because you don’t have to worry about monthly expenses such as groceries, travel costs, rent etc; you will have more capital to invest with. Don’t, however, be too trigger happy. Make sure you have enough disposable money that when you are back on land you can support your lifestyle. Rather start with small monthly deposits into your bank investment account and you can always increase your amount as you see fit. It’ll all add up in the long term.
Time Frame: To get the most out of your Return on Investment (ROI) you should consider long term plans. Anything between 5-10 years would be recommended. Set a time frame and stick to it even if it means a few months here and there are financially tight. The economy pulls and pushes like the current of an ocean so don’t worry if the market dips for a year or two. It is the nature of the beast. Experts will say cash investments are safer than stock investments. You have the surety of getting your money back with bank investment but the high risk often reaps high rewards for daring stock investors. It is a matter of you choosing an investment that works best for you. Property is also a great way of putting money away and watching it appreciate. It takes a shrewd investor to do this successfully because property value is heavily dependant on location and the unpredictable property market.
Act NOW: Don’t procrastinate. Don’t let your money burn a hole in your wallet. There will always be indulgent things to purchase unless you are diligent with yourself and your future. Store your grain away, winter is coming.
Lastly, don’t be like the incontinent Grasshopper in Aesop’s fable. You’d hate to be left penniless, in the cold while everyone else is enjoying their earning