One of the main challenges that a lot of people face when it comes to saving for investment is the long wait that one has to usually endure before they can get to enjoy the fruits of their sacrifice. Most people give up during the wait that starts when an individual begins accumulating money for a particular investment to the point at which the said investment starts paying dividends. Depending on income, expenditure and how much money is needed for the investment, the wait could be durations that are between weeks to years.
To improve your chances of staying on track with your savings plan, you need to stay motivated to save. One of the best ways to do this is by having periodic dividends paid out to yourself from the money you accumulate in savings. Here are some ideas on how to implement a savings dividend pay-out that will help you stay on track with your investment savings plan.
1. Cut your coat according to your cloth
The amount of money you pay yourself as dividends should be a reasonable proportion of the savings you have accumulated. Similar to the dividend pay-outs you would get from a business, your dividends on savings must be a reasonable proportion of your savings. Paying too much dividend to yourself will slow your progress towards achieving your investment objective while too little a pay-out may be less than sufficient motivation.
2. Earn your dividends
This simply means that you should pay yourself dividends only when you deserve them. While the pay-out is meant to keep you motivated, that should not be the all in all. The schedule of pay-outs should not only depend on time but also on the amount of investment saving accumulated up to that particular point. A full pay-out should only be made if the money saved up to that point matches the amount expected according to the savings plan. If the money saved is less than the amount scheduled on the saving plan, you have not earned the dividend and as such you should not get a pay-out.
3. Reinvest some of your dividends
As you would do with any other investment, it is important to reinvest some of your hard earned money. You could either put the money back into building your investment savings or you could use it to set up or bolster some other investment you already have. This investment opportunity is an exciting chance that will allow you to experience and enjoy a preview of what it means to be an investor. You can use it as a practice run for the main investment that you intend to get into once you have saved enough money.
4. Enjoy your dividend
As stated earlier, your dividend pay-out is meant to keep you motivated to save. If you do not enjoy it, then this objective is defeated. Make sure you enjoy your dividend fully so that your experience is sufficient to carry you through the duration you need to wait before you get to the next dividend. Make sure that the money goes into giving you a personal treat that will be worth your past effort and future sacrifice. It does not have to be expensive, but it should be of great value to you.
There are several other ideas that can be applied so as to help you remain on track with your investment savings. Implementing the savings dividend idea along with other aspects of your savings plan will help you effectively save for your investments and other financial needs that you may have.