Elaine is the author of two award-winning books, and in this article she shares the steps you need to take when investing your savings (and why it’s essential that you do this). Check out this excerpt, and click through for the full article.
When I was 5, I received my first allowance. It was in Peruvian currency, and the bill had such a large number on it that I thought I was rich. My parents quickly explained the actual value of the “inti” (the name of the currency), telling me the 20 intis I received were worth only $1—enough for a chocolate bar and a comic book.
At that time, Peru was suffering from the worst inflation in history. Gasoline prices increased 30%; postal services and telephone services shot up 20%. In a period of 4 years, the inti changed 227%. Because of this, I knew I’d soon have to choose between a chocolate bar or a comic book with my allowance. So instead of spending at the same pace, I learned the value of planning, saving, and investing and found other alternatives for my spending habits. (And eventually, I found a rental comic store around the corner and used the savings to buy a game that taught me about investing.)
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