Why You Should Focus on Building Wealth...Instead of Just Saving Money (2024)
By Stacy Williams
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Stop the presses! I know. I’m late on this post today. It happens. 😀 Why am I late? Because I was doing some work for a few other bloggers. That’s okay. Like I said. It happens. Next time, I’ll plan my schedule better. Aside from the fact that I’m late, maybe you’re wondering WHY I was working for other bloggers?It’s not because I desperately need the cash. While any cash is great, it’s simply because I want MORE cash than I have now. Why do I want more money? Because I’m trying to build wealth for my family…and you should be too.
Building wealth for ourselves and our families is so important. Except we are also told that saving money is too. Figuring out which one is correct can be a truly mind-blowing experience for some…especially if you’re new to the whole shebang.
Let me help you bust through the confusion…they’re BOTH right.
When we look at building our financial lives we need to not only be looking at saving for emergencies, but also building our retirement and building wealth at the same time. By doing so, we ensure that we have a fund set aside for whatever life seems to throw at you and that when it’s time to retire or quit working, you’ll have enough to live comfortably. Savings alone won’t provide the life that we are looking for, but neither will wealth. I don’t know about you, but for me personally, I want to know that not only are those emergencies and my “wants” are covered, but that there is enough money in the account to cover any regular expenses that we may have as well as enough to retire on. I’m not getting any younger and even though I’m only 33, retirement has been on my mind a lot lately.
Savings accounts, while they’re a must have? They don’t grow very well. Even a money market account, which typically has a higher interest rate than a regular savings account, won’t grow for you the way that an investment can. So your money kind of just sits in that account, accruing a few pennies a year interest when it could be out earning for itself. That’s why it’s so important to do both. Yes, keep your savings accounts. Build them up to where you could live off of them if you needed to, but take the rest of your money and plant it. If each dollar is a seed then plant them deep so that eventually you do have the proverbial money tree.
So how do you do both? It’s not as hard as you may think.
To start with you’ll want to build your emergency fund first. This one is by far the most important of the two accounts. You’ll want to build it up to $1,000 as quickly as you can. This may not be as hard as you think since just $16.66 per day can help you get there in just 2 months. You must have these funds set aside for those pop up emergencies like car repair or a sudden family trip. Once that is set up, think about other savings that you might need. Do you want 3-6 months of living expenses in the bank? Do you want to have an account set aside for a new car? Whatever it is, make sure that you have the accounts for them taken care of and at least half full before you start to work on building wealth.
Once you’ve got that taken care of, it’s time to move on to building your retirement and building wealth. I love the text message method that I use, but if that isn’t something you want to look at doing, consider talking with a financial advisor. Investments are a great way to build your financial portfolio. For new investors, go with something a bit “safer” like a bond or a money market account (although do keep in mind that there are no truly safe investments and that everyone carries risk). Bonds are easily to understand though and depending on what you pay for the bonds themselves can net a nice, tidy profit for you.
As you’re building your portfolio, be sure that you don’t forget to save too. Doubling up on what you’re doing financially is never a bad thing (unless you’re doubling up on spending of course). Continue to save, continue to build and when you’re ready? You will have built a financial future for yourself and your family like you’ve never imagined.
To build wealth, you need to earn, save, invest, and pause. For most of us, earnings alone aren't enough to truly become wealthy, but if we save and invest wisely, we can build up to a comfortable retirement someday. The key is to make your investment something that can grow and earn money later.
Learning how to build wealth is essential for financial security and independence. If you have financial goals, such as buying a house, paying for your kids' college or securing a comfortable retirement, building wealth is the key to achieving those objectives.
Savings can be done on a daily, weekly, or monthly basis, for example. It depicts a consistent flow of savings, demonstrating the flow idea. The surplus of net assets over total liabilities is referred to as wealth.
It is important because it can provide access to better housing, education, healthcare, and other resources that can improve overall quality of life. Wealth can also provide financial security and peace of mind, reducing stress and anxiety associated with financial instability.
Wealth gives us more options than we would have if we did not have wealth. Wealth is the power to turn goals into reality. It has the depth of possibility, opens up the world and has the power to enrich our lives and the lives of others around us, if used responsibly.
While get-rich-quick schemes sometimes may be enticing, the tried-and-true way to build wealth is through regular saving and investing—and patiently allowing that money to grow over time. It's fine to start small. The important thing is to start and to start early. Earn money and then save and invest it smartly.
While material possessions may bring temporary happiness, true wealth is a much deeper and more fulfilling experience. True wealth is about creating connections with people and experiences that bring joy, happiness, and fulfillment to your life.
Investing provides the potential for (significantly) higher returns than saving. As your investments grow, they allow you to take advantage of compounding to accelerate gains. Investing offers many different access points and strategies, from individual stocks and bonds to mutual or exchange-traded funds.
Saving money is not enough if you're not putting it to work. Investing is an excellent way to grow your wealth and secure your future. You can invest in stocks, real estate, or mutual funds. It's important to do research and find the best way that works for your lifestyle and financial goals.
The concept hones in on how the feelings of security, referred to as consumer confidence, are strengthened by sizable increases in the value of investment portfolios. Extra confidence contributes to higher levels of spending and lower levels of saving.
Wealth is an accumulation of valuable economic resources that can be measured in terms of either real goods or money value. Net worth is the most common measure of wealth, determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts.
No one benefits from you being poor. And no amount of depriving yourself of wealth will ever bring others to a greater level of wealth themselves. The best thing you can do for your own life and for those around you is to be abundant – in all aspects of your life.
You get to be more available to the people in your life that you care about. You can spend more time on hobbies or business ideas that you never could before because you've got a built-in safety net of wealth to catch you if you fall.
Purpose Of Wealth: Protect, Enhance Or Enjoy The Wealth
We think the purpose of wealth can often be distilled into three objectives – protect capital (stay rich), grow capital (get richer) and enjoy capital.
Wealth creation helps you set the foundation for your future financial security. It helps you accumulate wealth for different financial goals, including retirement, your children's higher education, house ownership and more.
Your health is your greatest wealth and asset. Your healthy body gives you the strength and energy that help you to achieve better results in every aspect of your life. Being able to sleep at night, walk without pain, eat and enjoy food is the main meaning of happiness.
The wealth effect is a behavioral economic theory suggesting that people spend more as the value of their assets rise. The idea is that consumers feel more financially secure and confident about their wealth when their homes or investment portfolios increase in value.
Purpose Of Wealth: Protect, Enhance Or Enjoy The Wealth
We think the purpose of wealth can often be distilled into three objectives – protect capital (stay rich), grow capital (get richer) and enjoy capital. Most clients tend to want a combination of these, but in differing proportions.
“The Way to Wealth” was not really about wealth as we think of it today. Its message was about how to accumulate enough to have material security, personal independence, and social respectability. The means to do so were basically hard work and frugality.
Why do we need money? Money can't buy happiness, but it can buy security and safety for you and your loved ones. Human beings need money to pay for all the things that make your life possible, such as shelter, food, healthcare bills, and a good education.
Introduction: My name is Terence Hammes MD, I am a inexpensive, energetic, jolly, faithful, cheerful, proud, rich person who loves writing and wants to share my knowledge and understanding with you.
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