Inverasaving is a concept popularized by my friends at Investopedia.
They are dedicated to teaching how to invest your money, regardless of whether you have a small capital or long-term objectives and much bigger goals with the investment.
But at its core, it’s basically about stopping thinking about “saving for your future” and starting investing in your future. Of course, we are talking about two components:
1. The habit of saving, which we should all develop, becomes impossible for some people due to the psychological behaviour issue and the management of their finances, willpower, and daily activities. That is, the way they use their money and financially distribute their income.
2. The ability to invest.
That is, to use the money saved to acquire assets, things that put money in my pocket, not that take money out of my pocket. So, the moment we start to get into the habit of saving, we should ideally have thought about how we will use that money.
You are not just saving it for saving it. In other words, saving means that we have clear and specific goals. This makes sure people who only save and keep money under the mattress or in a savings account see that more and more their money is being devalued. What they could buy a year ago, they no longer have enough for that today, with the same amount of money.
Therefore, saving savings ideally seeks to bring you to a point where your savings will appreciate over time or are minimally on par with inflation.
Of course, if we start from scratch and have no idea how to invest, we must be cautious. It does not mean that at the first investment opportunity, or that it “seems like an opportunity”, we will deposit all our money there.
Even with real opportunities, which are not scams, which are not Forex multi-levels that guarantee you double your money in a specific time, or anything like that. We are investing in the stock market, even buying specific stocks or investing in the S & P500 of the United States, which is one of the most respected indices in the world.
Even so, we can lose money or have depreciation. And if we mishandle our emotions, if we have no idea what we are investing in, if we are going to buy an emerging cryptocurrency like “meme coin” or something like that, we can make bad decisions. So it’s not like if you have no idea about investing and haven’t developed the habit of saving, your first savings are automatically invested in something you have no idea how works.
The idea is that saving requires education.
But the advantage of investing, even when we start small, and when we start by understanding and trying different strategies with little money and low risk, is that investing does produce returns; And when you reinvest your income or your interests, those interests earn you interest.
What we call: Compound interest.
It is not the same as when you have money, for example, in a CDT, where well, if you have a short-term objective and do not want to risk that money devaluing, it is okay to use it as a value preservation mechanism.
But if your goal is long-term, the idea is that you use a moderate or higher risk mechanism, which gives you a greater possibility of growth. Because many people think that “risk” is the possibility of losing all their money, usually in natural and severe investment instruments.
Losing all your money is not common in a real investment.
And if you invest, for example, in the New York stock market, where you must have your money in dollars to buy those shares, then you have this advantage:
Even though it is a Fiat new currency, the dollar depreciates over time and has already lost 95% of its value in 100 years; it depreciates less quickly than currencies such as the Colombian peso or the Mexican peso. That even though neither the dollar nor the peso is ideal; Be that as it may, our Latin currency has a much more accelerated devaluation process.
At what it was ten years ago, the dollar was worth half of what it is today. just having your money in dollars during these ten years, you would have doubled the value of that money without investing it. if you had invested in and only had 10% annual cash, your money would have quadrupled or something like that, which is incredible.
So the idea with saving is that instead of saving for your future, invest in your future. Which, in any case, implies, for example, getting into the habit of saving. Studying about investments, and even more important than learning, is to start investing, to try to see what happens. That you say,” is this application good or not? Should I buy these shares or not?” «… Well, do it!
What if you try? At least do it with an amount of money that you feel comfortable with, even if it were to go to waste entirely. I’m not telling you that it is going to be lost, if you educate yourself well and invest in things that are not super strange, you probably will not lose your money, but you will understand how it works.
What you have to do is stop the fear of investing. Also, eventually, you have to have a diversified portfolio. What does diversified mean? That not all the eggs are in the same basket.
If an investment falls, then not all your portfolio falls to the ground, but ideally, you have some things that have lower risk, another suddenly higher risk, depending on your profile.
And yes, here we can also take into account saving some cash (when I speak of money, it can be in a bank account, money that is not invested); or have part of your portfolio, your money, your assets in a CDT; or have part of your portfolio in US or Colombian stocks; or whatever, but that is diversified.
Even real estate, for example.
It is also essential that you allocate an amount to that investment every time you receive money.
In other words, we are not talking about the fact that investing involves first raising a considerable amount of money and then depositing it all in investment because that is not the idea.
The actual investors monthly contribute money to an investment.Regardless of what they receive, they always have a fixed percentage of their income destined to invest and support every month. What’s more, some do it biweekly or even weekly, which can cushion the market’s ups and downs a little better.
It also means having a plan to withdraw money from the investment. That is to say, making a profit that I hope is not short because there are people who want to triple their money in 3 months, and that is not easy.
But of course, scammers are ready to tell you: ” Yes, of course, it is possible, of course, I promise you, of course, it is guaranteed, just g, I’ve me yo ur money .” You also have to have very low-risk investment alternatives for the short term to have there the money you are going to have in a set time and for which you have a specific objective or destination.
So don’t risk it, for example, in the stock market, where if something happens with the pandemic, or something similar; Well, it is simply going to devalue you.
And if you need to withdraw, you will materialize the losses.
The objective is to acquire your criteria to know what to invest in, how much to invest, where to invest and at what time. The timing is not that relevant. The best time was five years ago, the second-best time is now. But that you are the one who is developing that skill.