Today, I thought of writing about simple reasons why one should save and invest their money for the future. I want these points to act as a reminder to you. Note, when I say “Save” in this article, it means “Save and invest”!
Are you saving for the future? NO or YES?
You must be wondering what a stupid question that is, because it’s so obvious that one needs to save money for the future. We all do it anyways!
In last 10 yrs – we have dealt with so many investors who are not as prudent and forward-looking as you are. Many investors are hand to mouth when it comes to saving money. They are just postponing their savings in future and relying on luck or maybe they are not giving putting enough energy to save money.
It will help you in bad times
If you have enough savings with you, you will be able to handle the situation in a much better way and won’t have to run around to others for money.
We all know that life is dynamic and bad things can happen. One may lose a job and become jobless some day. Or one may need lots of money to admit a loved one in the hospital. You never know what the future has in store! There are always phases in life when things are going bad and if you don’t have savings, it can trouble you!. So savings help you in bad times!
To Get Financially Free
When you start working, you have no wealth and you have to rely 100% on your salary. But over time, your wealth basket needs to go up in value so that if required – you can take out money if needed.
We all want to create a level of wealth so that its enough to generate some income for us to handle our basic expenses at least. I am talking about financial independence. We all want to reach a stage in life when we do not have to depend fully on our salaries.
This way, you reach a point in your life when your wealth itself is enough to create a stream of income which handles your basic expenses at least if not a lavish lifestyle.
One day you will stop earning
I see many people in their 30’s and 40’s behaving as if they will keep getting salary in their bank account all their life. They don’t take enough efforts to save money. They keep delaying their plans to invest and one day they realise that they are now in danger zone!
At times, I am surprised to see many people forgetting this simple point, that one day they will stop earning. That’s called “Retirement”.
Do not forget that after you start your job, the expenses will never stop after that, but your earning will come only till you are 55-60 yrs!.
You don’t get into the debt trap
Its because they didn’t have enough money saved!!. The root cause of the debt trap is because people do not save for the future, and then slowly have to rely on debt to fund their needs and desires.
Remember that people who are into debt trap today started small. They got into a small debt first, and then they continued it, didn’t manage it well and now after many years, they find themselves into a deep debt trap. Think why they even started with the small debt like credit card debt or a small personal loan of 2 lacs?
To handle major life events
A lot of major life events are going to come in your life and lots and lots of small events which will demand money constantly!
Upgrading of Car
Child Education Higher Education Kids School fees (recurring)
Starting your wealth creation journey early in life increases the chances of you meeting these financial goals with less stress and on time without compromising on them!
What are you going to do – if you will not save enough for the future? Depend on Loans? Get into a Debt Trap?
To explore an alternate career
If you save enough today, there will be a time when you will feel more comfortable to take that kind of tough decision. Having wealth on your side – gives you enough power to tell your boss that he sucks and that you are not coming from the next day!
A lot of people are not happy with their jobs. They feel stuck and they want to do something about it. But once you take a home loan and don’t possess any other skill, it becomes a permanent job for you.
You cant quit and explore other career choices because you have no backup plan. Forget switching career, ask yourself if you can even take a 2-3 yrs break from the job? Do you have enough wealth to support that?
You will be able to take calculated risks in life and try out many things .. so start saving now!
The above suggestions are all generic in nature. If you are interested in wealth creation in a more focused and structured manner, and start reading my blogs