A Penny Saved is a Penny Earned?
Have you heard this saying before? Well it couldn’t be further from the truth. The fact is what you save never holds it value compared to when you earned that money.
How is this possible when I see the same amount I saved in my bank account still? As you may or may not know, money inflates at close to 2%. That means each year the money you hold becomes less and less valuable.
This is another reason why Bitcoin has been such an attraction to many retail investors this past year.
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The Numbers Breakdown
To give you an example to wrap around your head; $100,000 in 1987 would cost in today’s dollars almost $190,000. That means your money is about 50% less valuable. So much for saving! You are basically giving up half your money in a 30 year span.
This is why I stress about why new money is so important because it holds the full current value at that moment but in just a year’s time it will be about 2% cheaper.
Wealth creation is far more important than having money in the bank. This will keep bringing in more money that can then be applied to make future income. You need that new money always!
Being a Saver Can Destroy Your Growth
Another problem with saving is that when you have an amount of money sitting in the bank and try to preserve it. You destroy your abilities to create more in life and do almost anything. You become a preserver, a money manager of your own cash, and most importantly a 'stressor' that you have to be careful with how you spend because it is only dwindling.
Now you say you are making some interest as your money sits in the bank, right? Well most banks pay well under 1% nowadays in interest and if you are making 2% a year, your still breaking even and that is as good as a lost.
Money is just a means of exchange. Real wealth is building up as many assets as possible, like the game monopoly. You want to increase your overall cash flow at all times. Cash sitting is as good as a liability, it depreciates and it a losing asset.
Holding Cash Can Have Its Benefits
I am all for building and holding cash for the right opportunities. I use to put my cash into assets as soon as possible but that caused many mistakes by jumping the gun. So waiting for the right asset to strike is beneficial. Also creating the discipline to not spend and save instead is a great beneficial as well.
Just don’t get too caught up on not spending when it is the time to do it. Even for yourself, education, motivation or whatever it may be to get you to where you need to be.
Whatever it is, make sure it makes money from it. If it’s spending on yourself, make sure you bring home that bacon because of it.
The Bottom Line
You want to use money, not save it. That will get you to grow more and more in your life.
It will create the 8th wonder of the world with your money already, compound interest. You’re money is just like your life, if it is not growing you are dying, slowing but surely. What doesn’t grow is shrinking and it is just a matter of time before nature takes its course. That could happen a lot faster than what you think.
Many think a million dollars is a lot of money. That is nothing in this day and age. Believe me you can spend that in the blink of an eye.
Continue to earn money at all times with your own skills or within investments and assets. Make sure not to lose money ever. Then re-invest that money to create the compounding effect. The money one day will be growing so fast it will be coming out your ears and it will become very hard for you to ever be broke again.
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@bitdollar
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