Saving: The key to wealth

Date Thursday, September 4th, 2008

If you ask most people what the key to wealth is, they will probably say making a lot of money. It makes sense… if you are making a lot of money, you have more money to spend, save, etc. which will help make you wealthy. However, in practice, that’s not what wealth is about. The biggest key to wealth is saving money, and spending less than you earn (no matter if you make a lot of money or a little). If you are able to do that, no matter how much money you make, you can become wealthy. Obviously it can be a lot easier to do this when you are making a lot of money, but it is not absolutely necessary. You just have to have the discipline to save and look ahead to your future.

Just think about it. We all know people that may make a lot of money but always seem to be broke. Why? Because they fail to save any money, spending it frivolously on the things they want and think they need. Are these people really wealthy? I will say that just because someone may be accumulating a lot of “things” and “luxuries” does not necessarily make them wealthy, as this doesn’t go toward securing financial security later in life, which is what you do when you really become wealthy.

Now think about the middle-class family that puts money away each month and saves it for retirement. Little by little, they are saving their money and having it work for them, building up their wealth. It may not be pretty or as fun as the higher earners, but it’s a great way to accumulate wealth. By spending less than they earn and saving the rest, they are becoming wealthy.

So again, if you ask people or take a look at these hypothetical families, most people would think that the ones that spend a lot of money and have a lot of things are the people that are really wealthy. However, that’s not exactly right. The wealthy ones are the people that save their money for later in the life, so that they can live without financial worries and just enjoy life.

That is why saving is the real key to wealth. The quicker someone can come to that realization, the better their chances are securing wealth become.

by Juan Leer

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