Where to invest free money

Where to invest free money? Real estate, precious metals, bonds, stocks, currency, cryptocurrency? 😎

(I’ll make a reservation right away that I’m not including in the review some unique and accessible only to a limited circle of people tools, for example, collectible cars, art and luxury items, etc. Only what is available to the average ordinary investor).

First of all, do you need to save money at all? Maybe it makes sense to just live for your own pleasure and not bother yourself with budgeting, live for today, earn and spend, and in old age the state/children/grandchildren/rich spouse/someone else will take care of you? 😇

Personally, I cannot imagine life when there is no savings for a “rainy day”, a financial cushion, and for a long time I have not believed in fairy tales about the state that will provide for me in retirement. I believe that absolutely every person should, from a conscious age, independently manage their finances, plan their own budget, including for the long term.

There are a huge number of videos on YouTube, articles and books on this topic, so I will not go deeper and retell ideas that have been voiced thousands of times before me, but will simply recommend 2 books 📑 which, I believe, every adult who cares about their financial well-being should know:

📌 D.S. Clason "The Richest Man in Babylon". I am sure that 99% of those reading this post are familiar with or have heard at least once in their lives about all the principles that are described in this book. And I am also sure that most of you have never used them on a regular basis in your life. The cost of a paper book is 200-300 RUB, it can be easily read in a few hours, and this is definitely the best investment in your life. For those who haven't read it, be sure to buy the paper version. This is a definite must have.

📌 R. Kiyosaki's "Rich Dad Poor Dad" The book that every article gives as a recommendation to read when you search for books about finance on Google 😁 Yes, it contains a huge amount of water, a lot of examples that are not applicable in Russia or are long outdated. That's not the point. This is a classic and has 2-3 super ideas that 99% of people also know. They know it, but they don’t apply it. Be sure to read.

As for me, I have been keeping my own budget for 5 years now, a simple table in Excel, with 2 main sections - 💰"income" and “expenses”, each of which is divided into several parts, where I write down all expenses and receipts every few days. Basic principles - income should always exceed expenses (if this does not happen, you live in the red), and I save a certain part of income (a percentage or a fixed amount, for example) and then invest.

I periodically analyze changes in expenses and income for various periods (month/year), if necessary, make adjustments to expenses, set plans for maximum expenses for future periods. Naturally, it is necessary not only to cut unnecessary expenses whenever possible, but also to maximize income. A sign like this is a powerful tool that I'm also sure most of you don't use. In the future, I will consider my method of budgeting in more detail.


And, finally, the main point of the publication - where to invest free (deferred) funds?

Let's go point by point

1) Nowhere. Earned/won/gifted/stole 😀, and simply put it “under the pillow”. The most “peaceful” option, absolutely without risk, nothing will happen to your money. Unless, of course, they are stolen/the house burns down (I don’t hope), you don’t spend it on a spontaneous purchase, etc. The disadvantages are obvious - inflation/devaluation, etc.

2) Spend it on something. Vacation, car, new iPhone, fur coat for my wife, etc. Here we return to Kiyosaki, namely to his remarkable division of types of investment into assets and liabilities. Anything that will not generate any income in the future or increase in price (especially if it requires additional expenses, for example, buying a new car) is a liability. Anything that generates income/increases in value creates added value - an asset. You need to buy assets and avoid/control liabilities.