Lazy Dollars

Lazy Dollars

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Lazy Dollars

Part 1

Lazy dollars can be defined as the dollars that are invested in any area of business and do not give the returns that they are supposed to give. Lazy dollars can also result from not engaging your many in various tasks. Money can perform or engage in different tasks but it all depends with how one chooses to use the money. Allocating money to perform one task could result to lazy dollars.

For instance, one of the lazy dollars in my financial life is the school fees. This results from the savings I have to make to pay for the kid’s education. Making the savings puts the money at a standby or so to say idle. This kind of lazy dollars result from failure of allocating money to various task. The source of the lazy dollars is the financial need. Everyone our society today experiences constraints in fulfilling their financial needs despite their occupation. However, there are always ways of conquering them without having the issue of lazy dollars. Lazy dollars can be done away with by having money perform a number of tasks in our lives. For instance, in my case above, the lazy dollars can be eliminated through making investments. Such investments could be building or buying real estates. This is a great investment that will generate a lot of income to cater for all the financial needs that one has. Investing in estates will have the rentals being occupied and the tenants pay for them monthly, this provides an easy solution to the issue of school fees as well as catering for other needs and hence acquiring financial freedom.

Part 2

Saving plan is a great idea towards avoiding financial constraint in life and lazy dollars. Savings can be of great help in the future life and that is why I opted to develop a savings plan. I am going to consider the retirement savings plan which will help cater for my survival after my retirement. Some of the strategies I will using towards my saving include the following. First, is knowing what I want. Savings without an idea could be misleading since there lacks a guiding principle which pushes you towards the saving. The second strategy is getting into the right mindset, having known what I want, it is necessary to set aside the money for it. This is all about deciding the amount of money that I would save for agenda and I decided on $5000 per month.

The third strategy is to set up emergency fund. Sometimes savings can be misleading whereby individuals save all the money not forgetting that issues can arise, this therefore leads to withdrawing the savings that one had already made to cater for the identified agenda and hence causing inconveniences or even failures in achieving the targeted amount. This also helps in avoiding issues of getting into debts or credit cards. Again credit cards and debts can lead to financial crisis with time. Then the last strategy would be to save automatically. Saving automatically through a monthly transfer will help in maintaining the loyalty to my saving plan. Sometimes it is difficult to part with cash at hand especially if it does not have an immediate return and that is why I opted for this strategy.

With my savings plan, I will make an automatic saving of $dollars monthly for my retirement into a bank account. Having registered with a retirement benefit plan, there are interest that the savings multiply with time. With mine it earns an interest of 20% annually. This is indeed a great deal since the money is not just idle but continues to earn me an interest of $12000 dollars yearly. This totals to $72000 dollars savings per year, therefore in 5 years’ time I will have $360000 dollars for my retirement savings. In 10 years’ time I will have $720000 while in 20 years I would have saved $1440000 dollars for my retirement.

References

Lawrence J. Gitman, M. D. (2013). Personal Financial Planning. Cengage Learning.

Mace, D. (2014 ). The Thrift Savings Plan Investor’s Handbook for Federal Employees. BookBaby.