There once was a youth who was told,
The path to make riches take hold.
With the magic of time,
Your investments will climb,
And you’ll end with a huge pot of gold.
There are still elusive leprechauns hiding pots of gold in the 21st century – they just go by different names such as lotteries, gambling and get-rich-quick schemes. You can find the rare success story with a nice pot of gold from pursuing these paths, but most people will be left poorer (and hopefully wiser).
There is a better way to find that pot of gold, or — better yet — find two pots of gold.
The first pot of gold
The first pot of gold is not at the end of the rainbow. It is sitting in your bank. It is called a savings account. The size of the pot depends on you.
This pot of gold can come in handy when life happens. What if a banshee breaks your arm and sends you to the hospital? What if a spiteful cluricaun (Irish elf) punches a hole in your car radiator? What if faeries knock out your air conditioning unit because it makes them too cold?
With your pot of gold savings account, you don’t have to worry about banshees, cluricauns or faeries. When emergencies happen, just dip into your pot of gold to pay for stuff.
Here are 5 ways to make sure there is enough gold in your savings pot:
- Automatic transfers. Set up an automatic transfer of money from your checking account to your savings account. This will grow over time. Without this step, it is too easy to spend everything you earn.
- Tax refunds. For many people this can be $2,000 or more. Don’t be tempted to spend it. Just save it for when you need it to cover surprises.
- Raises. Your expenses don’t go up the day you get a raise. Decide to add some of this increase to savings.
- Spring cleaning. Many people have a garage full of stuff they don’t use. Have a garage sale and use the proceeds to fill your savings pot.
- Use cash for impulse purchases. When it comes to eating out or buying clothes, it is really easy to overspend. One excellent way to stop this from happening is to give yourself an envelope of cash to use for each of these expenses. Your cash is easy to access at conveniently located ATMs. Once the money is gone, you can’t spend more until your next payday when you can get more cash. Use the money you didn’t spend to add to savings.
If you can get your savings pot to where it will cover three-to-six months of living expenses, you will be in good shape.
The second pot of gold
The second pot of gold really is at the end of the rainbow. It takes time to build wealth, but history shows that time brings results. You can read stories of people of modest means entering retirement with millions because they became investors.
The magic of compound interest is real. The longer you invest, history has shown, the more your money will grow exponentially.
Here are 3 strategies to make sure there is enough gold in your investment pot:
- Start early. If you wait until your 50s to take saving for retirement seriously, you give up the chance to use compound interest to your benefit. But start in your 20s and most of your gold will come from the growth of your investment, not your actual investment. You can’t change the past, so regardless of your age, start now.
- Invest in your 401(k). Many employers will match all or part of your 401(k) plan contributions. You are turning away free gold for your pot if you don’t take advantage of this. Make it happen. No excuses.
- Get help. Your future is important, and you only have one, so make sure you take advantage of experts who can match up the best investment choices with your pot of gold goals. Remember, there is a pot at the end of the rainbow if you start filling that pot now. It will take time, but it will happen — no leprechaun tricks!
Zions Bank is here for you — at every stage of life
Zions Bank is here for you with a variety of tools and services to help you improve your financial situation and prepare for life’s milestones. Our branch teams are ready to answer any questions or support you in any way you need by phone, online or in person. To speak with a Zions Bank Wealth advisor, please visit our website to schedule an appointment.
