Growing up we have always been told that saving gets us the things we want, if you save up you can eventually afford that nice car or that phone you’ve always wanted. This is true, saving eventually gets you the things you want but saving will not necessarily make you wealthy. Whether you are saving your money with a bank or you are putting it under a mattress, you will not get wealthy by just saving. The goal should not be to just afford something but to maintain it, and eventually buy more if you want to. This is how wealth works, you can afford something from the money you made whilst you are sleeping. Someone once said if you cannot buy something twice, then you definitely cannot afford it. Saving allows you to accumulate an amount of money over time to eventually afford something just once. Now ask yourself, what it is that the wealthy know that you probably do not. Is there a way to accumulate wealth that is better than saving?
This is the secret of the wealthy, Investing. Ordinary people save what is left after spending most of their money, wealthy people spend some of their money and invest most of it. If you save your money with a financial institution they give you a small interest for saving with them but have you stopped to ask yourself what they do with your money. They invest that money and it makes more money for them, they in turn will make money for their investors from the money you saved with them. This is simply how it works, your money is out there slaving for other people to make more money and you are only getting a fraction of that cake. According to Blessing Chiduuro, a financial analyst, a consumer who saves their money with JP Morgan will get an interest of 0.02% whilst someone who invests in JP Morgan stock gets a dividend on 3.7%. You might not be a numbers person but those numbers will definitely tell you something. The numbers are saying something and you should listen, numbers do not lie after all. There is just more cake for the investor whilst the saver gets the crumbs.
The difference between a saver and an investor is not the income at the beginning, we could all be getting the same amount of income. The difference is the sources of income at the end. A saver will still have that one source of income whilst an investor has created for themselves multiple sources of income through their investments. A lot might argue that they have bills and other expenses on a single salary and there isn’t much left to invest at the end of the day. This means you had not planned to set aside money for investing in your budget. If you still have no money left after budgeting it means you have way more bills than you should and must cut on the unnecessary expenses. I know this is not something easy but after your investments pay off, you can enjoy the other luxuries life has to offer.
Even the wealthy keep track of the expenses they always budget, why do you think the wealthy keep getting wealthy? They never stop investing, yes as wealthy as they are they never stop looking for other investment opportunities. According to businessinsider.com, during the coronavirus pandemic the US billionaires got $565 billion richer. Their secret is simply more investing and not more saving. You can start by saving then invest your money elsewhere or jumping into investing the little that comes your way. Sometimes if you try saving whilst waiting for the right amount or the right moment to start investing you might realize that the right moment or right amount might never come. Sometimes we might even lack the financial discipline and the little you were saving might actually get spent on something totally different.
Now I am not saying saving is bad, but if its saving alone you are doing then it will not get you the financial freedom you want. Everyone can start investing, it never is too late or too early. There are investment plans suited for everyone, look for a financial advisor and they will help you pick investment opportunities that will suit you best. Investing should become a habit, if you cannot start doing it alone that is why there are people trained to do the work for you.
The power has always been in your hands all along but no one had told you about the secret to financial freedom, the secret the wealthy all have in common. INVESTING