It is important to save and invest part of your income if you want to attain financial freedom.
Many people are poor savers, and statistics show that most working-class people are getting deeper into debt, and as debts climb, so it becomes even more difficult to start saving.
So, Why Don’t People Save?
Many will tell you that the reason they do not save is because they do not earn enough.
Surely you can take at least 10c out of every R1 you earn and set this aside in your investment portfolio?
If you cannot do this at present, then review your money management and set up a plan to take part of every Rand you earn and to invest this.
As a starting point, can you invest R10 per day?
But Let Us Drill Deeper: Why Don’t People Save?
- Lack of budgeting.
- To many debts – many cannot afford to save.
- I believe it all boils down to discipline, and creating a mindset of saving.
- Saving must become a habit.
- We need to start creating a habit of saving instead of a habit of debt.
- After all, we all try to save electricity and water, so why can’t we save money?
I heard a quotation from Jim Rohn, where he said that “the difference that separates the rich and the poor”, from his perspective, basically comes down to the order that they put money into savings.
Jim Rohn’s conclusion was that…
- Poor people generally SPEND FIRST and save what is left over. (The problem here is that there is never anything left over so they end up not saving!)
- Rich people SAVE FIRST and spend what is left over (This way they always build wealth first!)
I CHALLENGE YOU to re-examine your priorities. You can break the cash strapped cycle!
You can turn your financial situation around no matter how messed up your cash flow is.
Einstein said that the definition of insanity is “doing the same thing the same way over and over again and expecting different results.”
If you keep doing the same thing the same way, you will NOT see any positive change.
BUT today, you to treat your problem as an opportunity.
If you will change, everything will change.
If you are spending all you have, you may have some short-term pleasure. But if you don’t save, you will have long-term pain.
If you build a long-term habit of saving, you may have a little short-term pain. But I promise you that it will lead to long-term gains. If you invest over time, you will be rewarded.
Some just drift aimlessly along from one payday to the next…
If you handle your money like this, you will never reach financial freedom. You need to set goals and have a system to realize your dreams.
“Where there is no vision, the people perish” (Proverb 29:18)
It is time to dream big dreams and to plan to reach these dreams!
“Hope deferred makes the heart sick, but when dreams come true there is life and joy” (Proverbs 13:12)
So how do we save? How do we realize our dreams?
You need to set goals. You need to dare to dream. You also need to formulate a plan. And you need to make it easy to stick to your strategy.
“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty” (Proverbs 21:5)
If you are looking to build up your savings and investments, it is advisable to get some advice on how best to construct your plan. Sit down with a Financial Advisor. Determine where and how much you will invest. Implement a simple strategy by setting up a debit order to come off your bank account each month. This will ensure that you activate an automated simple money-building strategy that will help you build wealth over time, and help you achieve your long-term goals and dreams.
The R10 Per Day Challenge
Maybe you cannot invest much at present, but surely you can take R10 PER DAY and INVEST this over the long-term?
R10 is the price of a chocolate bar or a packet of chips.
If you start saving R10 per day and you invest the proceeds in a moderate risk balanced fund, you should generate growth of at least 10% p.a. over the long-term.
If you invested R300 p.m. (R10 per day x 30 days), at 10% p.a., and increased your saving by 6% p.a. (in line with inflation) your capital would grow as follows:
- After 5 years you would have R26 959
- After 10 years you would have R79 486
- After 15 years you would have R176 288
- After 20 years you would have R348 516
- After 30 years you would have R1 158 885
- After 40 years you would have R3 462 380
- After 45 years you would have R5 853 461
”… he who gathers money little by little makes it grow.” (Proverbs 13:11)
- Start investing!
- Set short, medium and long-term goals with timeframes attached.
- Determine how much you will put aside on a regular basis to reach your goals.
- Work out a household budget. You need to know where your money is going. Cut back on your spending and plug the leaks where money is being wasted and decide to build savings into your budget.
- Make sure that you stick to your plan and MAKE SAVING A HABIT.
Why not start saving by setting aside at least R10 per day?
“The wise man saves for the future, but the foolish man spends whatever he gets.” (Proverbs 21:20)
You can set yourself up for a brighter financial future by investing part of your income.
By doing this you will convert income into assets, and over time you will build up a wealth portfolio that can set you on a new path to financial freedom.
Happy investing! I challenge you to join the R10 challenge!
Have a great week.
God bless you.
Kind regards Clinton.
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