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In the future, you will have your own incomes and you will have a question about the possibility and necessity of generating savings. We have already discussed the motives for generating savings in the last lesson. Let's analyze them in more detail. Any of us can get into many unforeseen situations when money may be urgently needed: illness, job loss, accident, urgent need for car repair, etc. In this regard, you should always have a supply of funds that you can quickly send to overcome these troubles. What is the value of this minimum margin, each determines independently. In this case, one needs to focus on a situation in which the whole family was left without income for several months. Usually for such a period are taken 3 months.
For example, if a family income per month is 75 thousand rubles, and we want to create a reserve of 3 monthly income, then the family’s savings should be at least 225 thousand rubles. However, savings are also necessary in other cases when you set yourself long-term goals, the achievement of which requires large financial costs. such goals may include traveling, acquiring an apartment, car or household appliances, repairing, getting an education, preparing for a wedding, having a baby, etc. And finally, if the necessary “for a rainy day” stock of money has already been formed, but some There are no specific long-term financial goals yet, you can look for a way to save money that will make your available funds a source of additional income. Obviously, the storage of savings depends on the motives of your decision to save. Savings can accumulate in the form of cash, bank deposits (deposits), foreign currency, gold, personal insurance programs, as well as various documents and securities that are used in the financial market. No matter what form your savings take, they are united by the fact that they are all your property, put into circulation in the financial market in order to generate income. Following the professionals, we will call it financial assets.
When choosing the direction of investing your funds, you must consider 3 critical aspects.
1. Liquidity, that is, the rate at which your financial asset is converted into cash at its real value. Each of the investment areas we have listed will have different liquidity. if your savings are stored in cash, then it will be maximum, and you can immediately use them to achieve any goals. It will take a little longer to get cash placed on a bank deposit. And the speed of converting gold into cash will be even lower, because, as you will learn later, there are a number of restrictions that do not allow you to quickly and fully receive the money spent on its purchase.
2. The reliability of a financial asset, that is, its resistance to various risks of financial losses. here, too, there is a large spread between all areas of investment. if you keep money under a pillow at home, the most serious risk will be their physical loss as a result of theft, fire, flood, etc. If you put your savings in a bank deposit, your money is much better protected from thieves and natural disasters, but problems can arise at the bank itself. For example, if a bank is faced with a massive non-repayment of loans that it has issued to borrowers, it will also not be able to return money to depositors.
As for securities and other documents circulating in the financial market, thieves and fires are much less afraid of them, but the risk of loss of value for this type of financial asset is very high. For example, the value of a share of a company may depend directly on the results of its business, or on a number of reasons that neither this company nor you as its shareholder can influence. Such reasons for reducing the value of assets include a general economic downturn, a decrease in buyers' interest in the company's products as a result of new technologies, political instability in the country where the company's plants are located, etc. Meanwhile, any of these reasons is quite capable of lowering the cost of securities to zero, and if you own them, then you simply lose your savings almost irretrievably.
TO BE CONTINUED…
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