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What if I cut back on my expenses and invested a little more?

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Can you cut back on your expenses and invest a little more?

Maybe you can choose to cut your expenses slightly, and then consider investing it!

Practical Wealth-Building Principle

South Africans are known to be amongst the worst savers in the world. Many are also getting deeper into debt, and as debts climb so it becomes even more difficult to start saving.

I want to ask you to consider re-examining your priorities

It is so easy to spend money. But what if you could cut back, just slightly on your spending? Would it make a big difference? It sure can!

Imagine if you cut down on the money you spend on take-outs and entertainment. How much could you save? If you buy a burger meal or happy meal once a week at R70, and you choose to rather make a sandwich, you will end up saving around R50 on each meal, or R200 p.m. Not only will it be healthier, but you will free up some extra cash flow.

Or, what if you cut down on your cellphone calls and data usage, by just 20%? If your cell phone and data costs you R500 p.m., then you will free up R100 p.m. in extra cash.

What if you decided to downgrade your car? Not only would your monthly installment reduce, but so would your insurance premium.

I am sure that you get the drift. What if you could free up R500 p.m. or R1000 p.m. or even R2000 p.m.? 

Imagine if you then invested this money. This could make a huge difference to your financial future. 

Instead of spending all your money on “stuff” and “things”, you can turn your income into assets by investing. This in turn can set you up to be financially independent over time.  

The top-performing balanced unit trust funds have generated growth in excess of 13% p.a. over the long term. Yes over the last year, the returns are down due to the current crisis, but over time these funds generate real growth. 

However, let’s say you received a 10% p.a. return, your investment would grow as follows…

Monthly investment10 years20 years30 years40 years
R500 p.m.R105 187R378 014R1085 660R2 921 110
R1000 p.m.R210 374R756 029R2 171 321R5 842 221
R2000 p.m.R420 748R1 512 058R4 342 642R11 684 442

Now if you keep increasing your investment contribution by inflation each year, you will generate even more growth, and this will also ensure that your capital can keep up with inflation too.

By cutting back on your expenses and investing a little more, you can generate explosive growth over time. By investing you can build towards a brighter tomorrow.

Whenever you earn money, you can choose to spend it or invest it. If you invest it, instead of spending, you will build up wealth over time. 

So, invest first! You can then spend whatever is left over, and you will still end up building up your investments. 

I want to encourage you to manage your money the right way around. Simply INVEST BEFORE YOU SPEND. You can break the cash-strapped cycle. You can turn your financial situation around, no matter how messed up your cash flow is. 

I hope you get the drift! Even a small investment, over the long term, can have a huge impact on your wealth over time. 

Interesting Fact

In 1980, if you had R6000, you would have had enough money to buy a Ford Cortina. However, if you had left this in a bank savings account, that generated a return equal to inflation, this would have grown to just over R180 000. This would be enough to buy a Ford Figo today.

However, if you had invested in a top equity unit trust fund, your capital would have grown to over R2 300 000. This is enough to buy a middle-class family home.   

This example shows the difference between “saving” your money in a bank account, compared to “investing” your money in growth investments over the longer term.  No wonder Albert Einstein referred to compound interest as the 8th wonder of the world!

Power Quote of The Week

“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett

If you are in a habit of paying your bills each month, only to discover that there is nothing left to invest, reverse your money tactics. INVEST FIRST and then spend what is left over. This strategy will lead to a fruitful financial future.

What Does God Have to Say?

Proverbs 13:11 says “…he who gathers money little by little makes it grow.” 

So, consider cutting back on your expenses, and start investing a little more.

But, more important than your money, invest in your relationship with God

“Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.” (1 Timothy 6:17)

The bottom line is this … put your hope in God, not in money! He is our provider and wants the best for His children. 

Stay connected to God. He wants you to be fruitful. 

Jesus said, “I am the vine; you are the branches. If you remain in me and I in you, you will bear much fruit; apart from me you can do nothing. (John 15:5)

Where do you stand with God today? Do you know Jesus as your Savior? He made a way for you to share eternity with Him. And, He doesn’t want you to face the journey of life alone. He wants to do life with you, through the tough times and the good times.  

God saw that man was separated from Him, so He even sent His Son, Jesus, to pay the price for you and me on the cross, so that we can come into a relationship with Him.

You can start a walk with God, not because of what you do, but because of what Jesus did. This relationship ensures that you and I do not need to face life alone, and this relationship continues into eternity.

If you do not know Jesus as your Savior, why not invite Jesus to be your Lord and Savior? Give Him your life, along with your burdens along with your dreams and desires. He has a great plan for your life and he wants to do life with you.

If you want to start or restart your walk with Godclick here to pray a simple prayer we have set up for you.

Let’s Pray

Father, thank you that I do not have to face my financial affairs alone. Help me to put You first in all I do. Please give me the wisdom to make the right financial choices that will honor You. Lord show me what expenses to cut. Help me to invest a little more. And above all, may I grow closer to You. Please bless me, so that I can be a blessing to others. I ask this in Jesus’ name. Amen.

You can set yourself up for a brighter financial future, by cutting back on your expenses and by investing a little more. And you can set yourself up for a blessed eternity by giving your all to God.

God bless you.

Kind regards,

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