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What is the most efficient way to begin having an income and how should it be saved?
I have been wondering on how I should start saving my money, besides not spending it at all, so what should I do to begin saving, and also, how should I find a great way to have an income, especially when wanting to become an athlete or gamer. #career #stocks #money #gamer
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5 answers
Updated
Liz’s Answer
To answer the second part of your question, the most efficient way to save money is to understand how much money you have coming in, and where you are spending it. Saving is all about money in and money out.
Depending on where your income is coming from, you may receive similar amounts every month or varying amounts. For example, if you have a job that pays you hourly, you likely work a similar number of hours every week and make roughly the same amount each week. If you are working a more freelance job you may receive a paycheck one week but not another week. So the fist step is understanding where your money is coming from.
The next step is understanding where you money is going. If you have $1000 coming in every month, where are you spending that $1000? A breakdown could look like this:
Scenario 1:
Paycheck for the month: +$1000
Rent/Bills: -$500
Social Activities: -$300
Final amount leftover: $200
Once you break down where your money is going, you can create a budget. For example, you could say that every month you will spend $500 on Rent/Bills but you have a goal of only spending $150 on social activities. When you have a budget, you can make decisions based on how much money you have left in each bucket. For example, say you've already spent $125 on social activities this month, you may decide to not join in the next activity and try to stay within your budget instead. The money that is leftover at the end of the month can be put in a savings account.
Tip #1: If you know every month you spend $800 on your bills and social activities, try to put aside the $200 at the start of the month. This way you won't be as tempted to spend it.
Tip #2: Not everyone can save all the time but when you know where your money is going, you can try to make smarter decisions. Every little bit counts because saving is also a mindset.
What to do with your savings: There are many options for where you can place your savings. In some of the answers above they mention investing your savings and some mention placing those savings in a savings account. Depending on your risk levels, you can research which option would be best for you. A recommendation is to set a savings goal before you choose to invest your extra savings.
Depending on where your income is coming from, you may receive similar amounts every month or varying amounts. For example, if you have a job that pays you hourly, you likely work a similar number of hours every week and make roughly the same amount each week. If you are working a more freelance job you may receive a paycheck one week but not another week. So the fist step is understanding where your money is coming from.
The next step is understanding where you money is going. If you have $1000 coming in every month, where are you spending that $1000? A breakdown could look like this:
Scenario 1:
Paycheck for the month: +$1000
Rent/Bills: -$500
Social Activities: -$300
Final amount leftover: $200
Once you break down where your money is going, you can create a budget. For example, you could say that every month you will spend $500 on Rent/Bills but you have a goal of only spending $150 on social activities. When you have a budget, you can make decisions based on how much money you have left in each bucket. For example, say you've already spent $125 on social activities this month, you may decide to not join in the next activity and try to stay within your budget instead. The money that is leftover at the end of the month can be put in a savings account.
Tip #1: If you know every month you spend $800 on your bills and social activities, try to put aside the $200 at the start of the month. This way you won't be as tempted to spend it.
Tip #2: Not everyone can save all the time but when you know where your money is going, you can try to make smarter decisions. Every little bit counts because saving is also a mindset.
What to do with your savings: There are many options for where you can place your savings. In some of the answers above they mention investing your savings and some mention placing those savings in a savings account. Depending on your risk levels, you can research which option would be best for you. A recommendation is to set a savings goal before you choose to invest your extra savings.
Updated
Susan’s Answer
However you decide to handle your money - savings or investment - I would suggest taking a certain portion of your income/paycheck out before you spend it on anything else. That way it's the first priority instead of just what you have left over. You should decide ahead of time how much you can afford to take out and then stick to it. It does add up!
Updated
Qaysar’s Answer
In order to invest and grow your income you need to save, however saving doesn't mean not spending money at all or not enjoying life!
The key here is knowing what you spend your money on and creating a realistic budget based on your income and expenses (including emergency funds). Savings then can be invested which could create a passive (second) income on top of your current income.
Developing a hobby or interest could become another source of income which is a great idea as long as it doesn't affect your professional goals!
Having a mentor in the same sport or gaming industry could not only improve your skills but also learning more on how to reach out to scouts or finding sponsors. Networking and connecting with other gamers or athletes would open doors for you.
The key here is knowing what you spend your money on and creating a realistic budget based on your income and expenses (including emergency funds). Savings then can be invested which could create a passive (second) income on top of your current income.
Developing a hobby or interest could become another source of income which is a great idea as long as it doesn't affect your professional goals!
Having a mentor in the same sport or gaming industry could not only improve your skills but also learning more on how to reach out to scouts or finding sponsors. Networking and connecting with other gamers or athletes would open doors for you.
Updated
Andy’s Answer
Generating an income and saving are separate, but connected topics that are critically important to long term financial stability. Today there are countless ways to generate income, the most obvious being through a job/career that pays an hourly rate, annual salary or commissions. This tends to be one of the more stable forms of income (good grades in school, completing higher education can help here), but there are other forms of income that have increased in recent years, especially for professional athletes, competitive gamers, or online content producers on platforms like YouTube, Instagram, TikTok etc. This kind of income is generated through corporate sponsorships and product placements, but is usually much harder to achieve and much less stable over time.
When your income exceeds expenses then you can pursue a number of options to save (and invest) what you don't spend. There are countless options here as well, and will really depend on your knowledge, experience, comfort level and time availability. The easiest option is to open a savings account or money market fund, but they tend to have limited earning potential due to the safety they provide. Others look to public markets to buy stocks and bonds, and today it is relatively easy to open accounts online and invest your savings in stocks, bonds, mutual funds or ETFs. Those are just a handful of securities that you can invest in, but the full list is much longer. No matter what you decide, there are a few key concepts to remember:
1) Saving is very important (for college, for a car, for a house, for retirement, etc), and the compounding effect of investment returns is incredibly powerful in establishing wealth
2) When investing your savings remember to pay attention to costs and understand all of the risks
3) Investing typically means accepting a level of risk in exchange for a level of reward, and usually those levels will be related
When your income exceeds expenses then you can pursue a number of options to save (and invest) what you don't spend. There are countless options here as well, and will really depend on your knowledge, experience, comfort level and time availability. The easiest option is to open a savings account or money market fund, but they tend to have limited earning potential due to the safety they provide. Others look to public markets to buy stocks and bonds, and today it is relatively easy to open accounts online and invest your savings in stocks, bonds, mutual funds or ETFs. Those are just a handful of securities that you can invest in, but the full list is much longer. No matter what you decide, there are a few key concepts to remember:
1) Saving is very important (for college, for a car, for a house, for retirement, etc), and the compounding effect of investment returns is incredibly powerful in establishing wealth
2) When investing your savings remember to pay attention to costs and understand all of the risks
3) Investing typically means accepting a level of risk in exchange for a level of reward, and usually those levels will be related
Updated
Thomas’s Answer
Passive income is the best type of income to have because it requires little effort once you establish it. However, it can require work/large amounts of money up front to setup.
I would recommend studying and getting good grades in school. This will help you to be successful in your future. Once you have enough money to pay your bills, you can start looking into investing our money and generating passive income. This will provided you with extra money or time to spend on other activities.
I would recommend studying and getting good grades in school. This will help you to be successful in your future. Once you have enough money to pay your bills, you can start looking into investing our money and generating passive income. This will provided you with extra money or time to spend on other activities.