First and foremost, financial literacy is about how we use our income, how much we value our work and how skilled we are at identifying opportunities and risks when it comes to saving.

    Each one of us knows his price, knows how much money each working hour is worth; or should know…  Yet too little is given to us when we open our wallets or swipe our card through the POS.

             Ex: “You say that the new sneakers are on sale, 199$, reduced from 299$, but if you compare it with the fact that you, in order to buy them, will give in exchange 1.5 days of work (at a net salary of over 3000 $/month)”

     At the European level, Romanians are the most conservative when it comes to alternatives for saving their savings, the majority (70%) preferring to keep them in cash or in bank deposits, even if these methods prove to be unprofitable, as they do not produce a surplus of value to cover even the rate of inflation.

     And yet, what do we save for and what do we do with our savings?

We all know that there is no investment that is completely risk-free, in which context we must define risk as the probability of producing losses in relation to the investment made

     Most of the time, financial opportunities are associated with risks; thus, the fear of losing money causes us to not even investigate what growth opportunities we may have for our personal savings. Unfortunately, superficial financial education blocks our perspective to detect the most appropriate opportunities and means, so we remain prisoners of outdated concepts…

      Why should you save and invest?

If at least one of the arguments below motivates you, then there is no time to waste:

  1. Because that’s the only way you’ll be able to protect your money from inflation and maintain your standard of living, without having to resort to loans or a second job. Of course, there are no risk-free investments, but as I said before, they must be balanced with the opportunities, so as not to make choices that will be difficult for you to correct later.
  2. To allow the money already earned to produce more money to increase your wealth. Sitting with the money in the bank, you risk catching a crisis and not being able to do anything. In an investment fund, the money earned as a result of the returns earned is reinvested, generating further earnings in turn. Unfortunately, the fear of losing money paralyzes us in a lack of reaction, caused by a lack of financial knowledge, which makes us not notice the opportunities around us.
  3. To have a reserve in case unpleasant events occur in your life, in which case you will have to borrow and, being pressed by time or if the amount is too large, not to get the best repayment conditions.
  4. In order to have other sources of income available to you during your retirement period than the traditional ones. In order to maintain your standard of living after retirement, it is said that your income should be 75-80% of your pre-retirement income. So, for a carefree old age, it is recommended to start saving and investing 20 years before retirement.
  5. To invest in yourself, in your education, so that at some point you can reward yourself for your work or simply for a more relaxed lifestyle.

So, between opportunities and risks there is a wide palette of possibilities that everyone is obliged to document so that the financial balance is given by informed decisions and serves personal long-term goals.

    I hope that I have aroused your interest at least to allocate an hour of the time you spend daily on social media, looking for information about financial education, practically investing this hour in yourself and in the new knowledge you will acquire.

Success!!