The Importance of Saving Money! You Have To Start Saving TODAY!
Saving money is extremely important. Actually, in my experience, is the main indicator of whether you’ll accumulate wealth. If you’re able to save money each and every month (and never touch it again), you’ll accumulate wealth; otherwise you won’t.
Think about the word “accumulate”. It means stashing, piling up, saving; it means putting something on the side and grow it. “Accumulating” without saving is kind of hard, isn’t it?
This is the first mistake I see people do. I have thousands of students and I taught countless people how to make 10k a month, 20k a month, 40k a month. I know all sort of people making good money every month but I noticed a pattern: very few people save money consistently.
This is a problem, and a huge one.
Having money saved on the side is the only way to face up financial hiccups and rainy days.
Let me help you with this: let’s suppose you have 0 money saved in your bank (or a couple of thousands when you make 30k a month, which is really 0) and tomorrow your car breaks / you have a toothache / you have to spend 10k on medical bills. Or, even worse, a business opportunity comes up but it costs $10,000 / $15,000 for you to be able to take advantage of it.
How will you cope with this if not with saved money?
Monthly recurring cashflow is great, especially when it’s passive. That’s where freedom is and this concept has stood truth for centuries. But once you have the cashflow rolling every month (or every day, if you do things correctly) you have to put some money on the side.
The mental exercise that comes with saving money will go a long way. No matter what happens, save money every month.
“But Big Luca… I lose money to inflation if I save my money”
Sure, that’s correct. Saved money is an insurance, not an investment. You pay for insurance and in a sense, you’re “paying” to have your money saved. Sure, back in the days you could get a 15% by just parking your money in the bank (in pretty much every country). That was great. It’s not this way anymore but you still need to save. Again, you don’t save, you cannot face up financial issues when they arise suddenly and need to be addressed immediately. No money = no ability to cope. Plus it’s not like you only save money; you also save money.
“How much money should I save?”
That depends on how much money you earn every month. The more money you earn, the more money you should save (and invest, for that matter). If you make minimum wage or something like that, you need to be saving 10% each and every month and this is non-negotiable. Open a saving account and have 10% of your wage be automatically transferred every month so you don’t have see it.
If you earn more than $10,000 a month, you should be saving 50% every month. You can do it easily.
“But I can’t save money!!”
BS, of course you can. And you will. Seriously, you cannot get rich by NOT HAVING MONEY. I mean, think about this. If you want to accumulate wealth, you have to accumulate money (and sources of income that give you money every month). However you put this, you’re saving, stashing, piling up something. I’m always on the look out for new streams of income; it’s like I’m saving streams and continuously doing it.
You achieve wealth by accumulating, not by dilapidating.
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