How can you get a return of 6% to 24% a year?
The solution: lend to yourself. How is this possible?
During the first few years of your working life, you accumulate savings. You will earn a modest rate of 2% a year on your savings. In later years, when you need money to make a major purchase or an unexpected emergency, you borrow from your past savings.
If you do not have the past savings, you have to take a loan and pay interest at 6% (on secured borrowing) to 24% (on credit card). By borrowing from your past saving, you save this hefty interest rate.
It does not matter that your saving earn you only 2% a year in the meantime. When you need it, you can save 6% to 24% on your loan interest.
If you borrow $10,000 at 6%, the interest is $50 a month. If the rate is 24% a month, the interest is $200 a month. If you can save $50 to $200 a month on interest payment, it can add to your savings.
If you do not need to lend to yourself, you can invest your savings in a low cost, diversified fund to earn about 5% to 7% per annum. That is still better than 2%.
Remember: When you have the chance, accumulate savings. You will need it for the future. Keep your saving in a flexible investment that can be withdrawn without penalty, such as a savings account or an investment fund.
Do not invest in high cost financial products that locks you up for many years and imposes a heavy penalty on early withdrawal.
- ► 2019 (1587)
- ► 2018 (1406)
- ► 2017 (1258)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1654)
03/02 - 03/09
- Poll: Preferred type of term insurance
- Subprime losses could reach USD 400 billion
- High charges
- Credit card debt
- Earnings of Global Insurers
- Growth Policy
- Selamat Datang
- Term insurance with income benefit
- Taxis Stands in Central Business District
- Finance Your Passion Workshop
- Consumers are dissatisfied with financial institut...
- Buying life insurance in Singapore
- Speculative investment
- Computing the yield
- How to invest in this environment?
- Yields on Singapore Government bonds
- How To Maximize our R & D Investments
- Questions on existing life insurance policies
- Low Cost Life Insurance Policy
- Accumulate short term savings in a bank account
- Poll: Saving for a child's education
- Fair remuneation for an adviser
- Charges on your Investment Linked Policy
- Poor cash value for this whole life plan
- Poor products and unethical sales techniques
- A very poor deal
- Poll: Attitude towards savings
- Article: Don't expect another bull market
- Poll on savings and insurance
- Life insurance for a child
- Lower premium on motor insurance
- Life policy taken by a parent
- Guaranteed renewability
- Coping with future increases in medical insurance
- Pay off a housing loan
- Earn a return of 6% to 24% a year
- Benchmark premium rates for Term Insurance
- Save for your future needs
- Value of Life Insurance
- Spread in Flexi-link
- ▼ 03/02 - 03/09 (41)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)