A pig is an animal where it eats and grows fatter. That is why we have piggy bank; a common tool for our personal finance, putting money in for savings. But it has a more in-depth explanation than this.
As the word is spell using the letters P, I and G; it makes the word “Piggy bank” more meaningful to personal finance. These three actually form the words; Protection, Investment and lastly, Grow. As you can see, in managing our wealth we need to first protect, invest and then let it grow.
Now we will talk a little bit more on protect, invest and grow:
- Protect: In personal finance, protecting it means not letting any money slipping away from our hands. This can be done in many ways like: having medical insurance to pay for your medical expenses; accident insurance to cover your expenses in the event of accident; making a habit to ‘pay’ yourself first whenever you got your paycheck.
- Invest: In this stage, we will start to invest our ‘spare cash or funds’ to generate extra income. These investments can be in forms of investment-linked policy (ILPs), unit trusts, stocks or trading forex for capital gains. This is the stage whereby gains on these investments are withdrawn for expenses or to reinvest for a bigger portfolio.
- Grow: This will be the stage where you are starting to prepare for your future retirement, often stocks or property that bought during the investment phase is included here (if you are still holding to these assets). You can also include your retirement portfolio once you have your first two stages settled.
An interesting fact that this cute animal is actually teaching us the three stages of managing our personal wealth. Let us use these three stages of financial planning to grow our wealth!
Above article is written and published in EzineArticles, article source: www.EzineArticles.com/5378791