Where To Put Money If Savings Exceed Personal Needs?

The following article discusses important actions you should take with excess savings, so that you do not miss an opportunity to grow your wealth. It also examines the different choices you have, so you can make practically effective and personally fulfilling decisions in handling your excess savings.

Are You Putting Too Much Money in Your Savings Account? It’s Time to Invest Your Savings

As a general rule of thumb, you should have liquid savings of three to six months of net income set aside to cover living expenses. You should consider directing any excess savings to investments that provide the possibility of growth and income.

While a savings account may sound like a great idea as it can protect your money, growth is likely to be modest in comparison to the potential gains available in the stock market. By building an investment portfolio, you can not only invest to protect your wealth, but also position yourself to potentially earn sizable profits.

Building and Managing Your Own Investment Portfolio

An investment portfolio is a collection of assets and can include investments such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), and cash equivalents.

To build an investment portfolio, you will need an investment account and you will need to select the assets in which you will want to invest. It is vital for you to determine an asset allocation that conforms to your personal investment goals and risk tolerance, and to monitor your statements for portfolio diversification and performance over time.

In recent years, ETFs have gained popularity as an easy way of investing; they are available on most investment platforms. An ETF is a type of fund that holds multiple underlying assets and tracks an index, sector, commodity, or other assets, and can be transacted on a stock exchange like a regular stock.

While upsides of ETFs include being cost effective due to low management fees and a low minimum buy-in, downsides include the lack of demonstrable conviction to any individual security as they are comprised of a large number of investments with each investment making up a small percentage of the overall fund and limited downside protection when markets start to fall as, by their nature, ETFs are usually 100% exposed to stocks.

Hiring An Investment Manager to Build and Manage Your Investment Portfolio

If your goal is to grow and protect your money, then it is important to ensure that your time and money is optimized. Hiring an investment manager may be the right choice for you to help you put your savings to work.

Investment management, portfolio management, and asset management all refer to services that an investment manager provides, which includes a complete creation, oversight, and management of your individual investment portfolio to ensure personal objectives and risk tolerances are met.

When looking for an investment manager it is important to note that not all managers employ the same strategies when investing clients’ money. For example, a manager who simply invests based on a stock market index (referred to as closet indexing or passive investment management) brings into question the value provided by this investment manager compared to one who actively invests based on detailed analysis of individual investments.

In addition, the level of customization varies amongst investment managers. Many firms opt to streamline their services using model portfolios rather than a truly bespoke way of investing using segregated or individualized portfolios based on each client’s individual circumstances.

Investment strategy and level of customization are extremely important attributes to look for when deciding on a particular manager.

Self-Reflection: Where to Put Money If Savings Exceed Personal Needs

Increasing numbers of wealthy individuals are exceeding their financial goals, which raises the question of where to put money beyond saving, spending and investing – so that it is not only practically effective but also personally fulfilling.

The paradox is that while online articles can provide investing methods that are practically effective, achieving personal fulfilment in wealth allocation requires you to identify a deeper purpose. Ask yourself what connects you the most—family (consider wealth distribution to heirs), work (consider business reinvestment), or the world (consider philanthropy). Then, make it your goal – and personal fulfillment will follow.


Bloom Investment Counsel, Inc. is a well-established Toronto-based independent, privately-owned boutique investment management firm providing customized, actively managed, Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.

Founded in 1985, Bloom has experience in managing in excess of $2.5B in assets over the years. We believe that generating independent cash flow is central to the success of our clients’ portfolios because it provides capital for the present day, if needed, while continuing to preserve and build wealth for the future.

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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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