To be wealthy, you want to grow your money as fast as you can.
That means taking most of your savings – money that won’t be needed for awhile – and invest it in ways that make it grow, not just earn interest.
My rule of thumb is the one year mark: If you’ll use the money in less than a year save it in interest bearing accounts that you can tap easily, such as money market funds, not invested in assets where you could take a loss to sell it and spend the money (such as stocks).
If you don’t need your money for 1-2 years then put it in longer-term “income” investments, such as bonds, where it earns more interest than short-term savings.
If you don’t need it for 2 years or more, then consider growth investments, such as stocks or mutual funds that are growth oriented.
You are taking some risk, yet you have a better chance of growing your money to expand your wealth.
Habit #19 – Studying Investing