Financial freedom is indeed everyone's dream. We all want to retire rich and retire young but not all are able to obtain such happiness due to human greed and inability to finance their living, but suffer in wads of loans. There are no simple methods of retiring rich but saving early and if it is done consistently, then it is possible. Saving is to forego present consumptions for future use and to retire rich. Just save at least $100 per month without fail and save it without any need of withdrawing it later, except in the case of emergency. This $100 must be saved in a long term saving accounts as it yields highest returns.

Other methods of saving money

Apart from long terms savings, one can also invest in unit trusts, bonds or even corporate stocks. Ignore bonds and stocks if you do not have any capital savings, but if you do have enough capital and you are a retiree, just swim in it for it yields. It will have a better outcome if done correctly. For the risk adverse people, unit trusts and long term savings are good for a head start. In financial equations, profit equals risks and if the risk is high then the profit is high and vice versa. Among those four [bonds, stocks, long term savings and unit trusts], savings and unit trusts are of lower profitability but they are safer than bonds and stocks, thus good for beginners. Stocks and bonds are for pros.

Choosing the right place to save

Choosing the best bank to save is another scope to cover because different banks have different policies thus different dividends. This one must be done on your own because you have to do some analysis and surveys through forums and friends. The dividends for unit trusts and long terms savings might be as low as low as 3% but the magic lies in the principle of compounding interests. It is related to what financial people say as time value for money. Though money doesn't grow on trees, they grow over time due to cumulative compounding interests. If you save $100 per month consistently about 3-5 years, you will have enough money as capital to invest in bonds and stocks of higher return.

Stocks and bonds

Stocks and bonds are not for the faint hearted as though it yields more profit, the risk comes along with it in as one package. Investing in these two require you to have some knowledge which also require you to do analysis that has to be done thoroughly. Not all of us qualify to invest in stocks and bonds because of the lack of knowledge and experience, but you can select brokers to do the analysis, buy and sell etc for you. Be careful though, brokers are humans and humans lie and cheat. You cannot trust all brokers as they also invest in stocks and bonds on their own. They might swap their bonds with yours if yours yields profit, while he/she incur losses. In money matters, it is hard to trust strangers.

To be on the safe side, just join the long term savings plan for 20 plus year period and by the final year, you will have hundreds of thousands of dollars for you to spend in your retirement period.

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