Hey, please read the financial disclaimer below before reading this.*

A question I get asked all the time is: “How much should I actually invest?”

The short answer is: As much as you can, while still being able to sleep well at night.

Before we even talk about investing, look at your bank account. If you are in the minus (overdraft)—do not invest. You need to fix that first. Investing is for money you have, not money you owe.

Also, everyone’s situation and goals are unique. I’m speaking here in a very general way, and sharing what I personally do as a young professional. Do your own research and discuss this with finance professionals (I always recommend Blue & White Finance but I’m not affiliated with them at all).

IF YOU HAVE MORE THAN 50,000 ILS IN YOUR CHECKING ACCOUNT (OVER VE’SHAV), YOU ARE DOING THE WRONG THING. 

There is an old saying in finance that “Cash is Trash.” That sounds harsh, but here’s why people say it: If your money is just sitting in your bank account, it is slowly losing value.

Every year, there is inflation. Inflation is what makes 100,000 Shekels today worth less next year. It’s as if each year a percentage of your cash (non-invested money) is eaten by mice. That 100,000 becomes worth 98,000 then the next year 96,000 then 94,000 the next and so on.

If you keep all your money in cash under the mattress (or in a checking account), your “buying power” decreases as time goes on. Investing is how you combat that.

It’s easy to look at 1,000 or 2,000 Shekels a month and think, “Is this really going to change my........

© The Times of Israel (Blogs)