Decide Which Options Is Best For Your Holiday?
Going for a holiday is great for everyone after a period of stresses from works or other areas of your lives that might contributed. However, it's not cheap trying to pay for a holiday for a whole family of four members for those who are not earning a good pay check.
Before you decide to go for a holiday, you probably will have started planning and saving for the money to spend on this holiday. Is this the best option for doing it?
No, maybe you will work extra hard for additional income to finance this holiday leaving you with no time to spend time with the family if this extra job is not at home. You will be physically tired from the multiple jobs that you hold just for this holiday. No choice but to get the money for holiday? Don't forget you are taxed on your earned income and you are physically drained.
No, let's go to the casino to gamble to get more money for the holiday provided you can beat the odds of winning the casino. This might be the worse option among all because you are sure to lose.
How about this plan that you can use. I believe most family save a part of the income for emergencies. Now the challenge is how this fund is being used for the family. Is it just sitting there in your bank earning that miserable interest rate that can't even beat the inflation rate? Or do you force it to work harder for you? If you have a investment that give a good return annually to finance your holiday, wouldn't it be better off than those options discussed above? The time horizon for this investment is very short - one year, you have to decide or maybe discuss with your financial planner which investment instruments to chose to meet your investment objective considering your risk profile towards investing.
I have written this article to stretch your mindset to how you can make your saving work harder for you so that maybe you can have a source of money to pay for your holiday without you physically paying. I have many ways of financing my holiday depending on the period and point of investment.
I could plan my investment strategy in such a way that my fixed deposit account matures to give me my holiday money if principal sum of money is so big to give me a sum of money based on 3.5 percent interest rate when it matures.
Another alternative, I could have borrowed money from my line of credit account to finance my investment in my stocks purchase when I am confident to reap a profit due to the rising sentiments of the market if I have anticipated earlier by already holding on to the stock at a very low price with good safety margin to give me a good return when I sell the stocks when price rises. The profit will the difference of the stock price changes and the interest to the bank for using the line of credit.
There are many possible ways to it. Do you just let your money sit there and do nothing or do you let it works for you? One thing is for sure, you have to be able to save before you can have a fund to do investment. If you do not have a plan, you are planning to fail. Start now, don't wait. Time is money!
By Sean Toh
