Building your assets

Building your assets

Now that you’re getting into the Budgeting and Banking habit, let’s explore good ways to save and Invest.
  • Saving is a very important part of protecting yourself financially.
  • Save for an emergency fund first.
  • Then your savings can go toward meeting your GOALS .

Once you have a good amount saved, you can begin investing money.
  • Investing is how you will begin to grow your money and build wealth.

The road to investing almost always begins with saving



Putting aside part of one's income and not spending it on goods. Risk free and earns low interest.


Putting money to use by purchasing something that may offer profitable returns. Includes more risk but higher returns than saving.
Begin saving by opening a SAVINGS ACCOUNT at a bank or buy a CERTIFICATE OF DEPOSIT (CD) . Both of these savings products are insured by the Federal Deposit Insurance Corporation (FDIC) and are risk free.
  • ProNo risk (your money is insured)
  • ConLess potential profit.

Investing usually occurs when people use money they have saved to buy, for example, real estate, stocks, corporate bonds, or mutual funds or invest in a financial venture. Investing can also include real estate, foreign currencies, metals, gems, or art or to start one’s own small business.
  • ProGreater potential income and profit.
  • ConGreater potential risk (investments are generally not insured, and you can lose money).

Saving and investing options

If you keep the money you put aside in a Savings account, the amount of interest you will earn will be very small (<2%), but your money will be safe.
It’s also a good idea to have a solid EMERGENCY FUND saved before you begin investing. A MONEY MARKET ACCOUNT at your bank is also safe place to put this.
  • If you invest in MUTUAL FUNDS or , your RATE OF RETURN could be much higher, but the STOCK MARKET fluctuates, and is never a sure thing.
  • In fact, you can lose money in the stock market, so be sure to keep that in mind when investing.
If you invest wisely, you will eventually come to the point where your investments make more than you are contributing each month.
  • This is largely due to the COMPOUND INTEREST EFFECT .
Investing will help you build WEALTH . But keep in mind that you won’t be able to truly build wealth – and increase your NET WORTH –if you also have too much debt and live above your means.

Tips for investing

  • If you’re not sure about where to start, a good first step is to meet with a financial advisor.
  • A financial advisor can explain the different types of investments that are available to you. He or she can explain the risks and the potential gains to help you find investments that you are comfortable with.
  • Beware that many financial advisors are actually salespeople. Make sure your advisor is a Certified Financial Planner. READ MORE
  • If you are knowledgeable about investing you might work with a ROBO-ADVISOR . The fees are lower and if you know the types of investments you want to make, you can save money in the long run.
Remember, investing is a long-term strategy for building wealth.
  • Be patient and ride out the times when the market is not doing well.
  • Once you do this, then you can truly be on your way to building net worth.