Investing on a Fixed Income

By Andrea Martell

For some people, it is not until the moment that they lose their way of earning their keep that they realize just how far ahead they were of those who by circumstance (lost job, disability, or retirement) live on a fixed income.

A lot of the same rules to investing apply to those on a fixed income, as it does to those who don’t except that in order to be successful we must work smarter, and harder to make our pennies work for us.

In order to invest you must first have money to invest and this requires savings. Depending on your situation, your disability may have eaten up your savings or you may have none at all. It is harder to save on a fixed income but it is not impossible.

In fact, living on a fixed income may help you live a thriftier lifestyle that will serve you in more prosperous times. Try the following to start savings:

Depending on your circumstances open a no fee bank account, or use a savings jar.
Write out a budget that reflects your immediate needs (housing, food, medical supplies) and your debts. Use seven to nine tenths of your income to pay for the preceding, and with careful budgeting put aside one tenth of your income into your savings. Even if it is only a few dollars a week, change that you find, it is important that you save. Even if it is just a little.
List each debt from highest interest rate to lowest. Put the most of your debt money towards the debt with the highest interest rate, and the minimum to the rest. When all your debts are paid off, cut up all credit cards except one, and do not incur any further loans unless it is for an investment which you are assured a return.
Cut as much of your spending as you can. When you buy yourself something ask yourself two questions. Will this improve my health? Will this make me money now or in the future? If the answer is no to either question, put it back.
While you are saving, and paying off your debts, educate yourself on investing. Find new friends whose interest it is to invest.
Turn your mind to the idea that you can make money, and can work in some capacity within your disability. Believe in this long enough and you will begin to see opportunity where there was none before.

Once you have become in the habit of saving, you will be ready when opportunity presents itself.

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