Being a confident investor implies that you have enough money to invest. I am constantly getting requests from my site or via Twitter regarding how to get started investing. Many people appear to understand that it is important to invest but do not currently have the funds to do it.
If you read my book, The Confident Investor, you will learn that I recommend that you take 10% of your income out of your paycheck and move it to a separate savings account for investment purposes. I have also discussed this concept on this site. This 10% comes out before you spend a single dime on expenses. You are effectively cutting your income by 10%.
To cut your income by 10%, you will likely need to cut your expenses by at least that much. Recently, I read an article on CNN about the 10 biggest money wasters. These might be areas to consider for you:
- ATM Fees
- Lottery tickets
- Gourmet coffee
- Infomercial impulse buys
- Brand-name groceries
- Eating out
- Unused gym memberships
- Daily internet deals
- Bundled cable or phone services
In each of the above, CNN explains the common waste and suggests a way to save the money. Following all of these suggestions (if you were guilty of all of them) would probably knock of $50-100 per week. $100 per week means $5,000 per year towards your investment portfolio.
I think as long as we enjoy life without adversely impacting our savings it is OK.That’s why I believe raising interest rates will help the savers.