Investing can be a scarey thing when you first start out. But, think back to your childhoold piggy bank, that was your first financial investment. It may have been a novelty, but soon you found that the more you put into it, the more you got out of it.

Today, investing offers a whole realm of opportunities from the simpliest, like a savings account, to the complex like the markets. Three very basic elements come into play to determine what is right for you; your savings goal, your time frame and your tolerance for risk. Once they have been determined, you are on your way to finding the right savings tool for you.

There are a lot of other factors that can affect your outcome while accumulating this wealth, such as tax implications, earnings rates and potential, but what is most important is that you start. Make it a simple goal at first, say sacrificing two cups of Starbucks a week, and then slowly increase the amounts and frequencey as your comfort level (and pocketbook) become accustomed to the plan.

Remember, what ever your chosen field of savings becomes, inflation is going to be the first thing to attack it. So, pick something that will at least grow at a rate greater than inflation.

Your second enemy will be the tax man. Every dollar you earn in interest, dividends or capital gains, will be subject to some sort of taxation. If you are unfamiliar with the tax implications, that is where a good financial planner can help. They often can steer you in the most tax efficient direction.

The biggest enemy of all will be YOU. The temptation to use your funds for something that was not planned for but just sounds to good to miss. Don't do it, you will never get back on track if you do. Set your goal, stick to it and enjoy it when you reach it.

Learn more about this author, Barry Ottaway.
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