Save Your Money and It Will Grow!
Recently, a friend of mine told me similar to the above expression. At first, I was convinced by his arguments but then I thought a bit deeper into it. And believe me I've found otherwise.
Only saving money can't help you increase it. Some other important aspects are seemingly notable in this regard. Today, I will try to explain the following with my side of view.
We all know that wealth is the abundance of valuable assets which can be converted and transected in exchange with value or services. But the modern definition of it may differ; Or include the whole bunch of notions regarding economy. However, wealth management is a crucial thing. A simple wise or stupid decision can make a huge difference while smart people can easily avoid the subtle hazard with a little concern about it.
It has been defined as a collection of things limited in supply, transferable, and useful in satisfying human desires. We use our wealth, invest in them, make savings for the future and exchange them simultaneously. However, I was with my friend and he mentioned an interesting thing about money and how it can drive people crazy.
He suggested that I should save some money and keep them aside for the future. He seemed a bit more excited about it. Anyway, I was thoughtful and seemed a bit dull to me. He showed me some opportunities in banks or other financial institutions that allow individuals to keep their money quote unquote safe!
He also mentioned that the daily expenses are increasing; if I do not save something, I will definitely lag behind. But I was like.. Whaaaa!? No way! I can't tolerate that. And then I started to think about it. Friends, I am not going to tell you that my friend was entirely wrong. Rather, I must say he has a point. But if you take his suggestion as a considerate stuff, you can do that. But the crucial point is how it is not suitable for me or you!
The thing is pretty simple, if you just keep your money it will surely not increase. There is a thing called inflation! It means the monetary value of your savings can decrease day by day in relation to the value or usage of it. Let me give a suggestion here; imagine my friend whom I am talking about today has $1000. He saved it from his salary.
If he keeps it as it is, it will not grow. Or the profit rate or deposit bonuses that banks or financial institutions give is not that much enough to cover or maintain the balance with inflation. One year earlier my friend could exchange more usage of that asset in contrast with present time. Here is the noteworthy fact about his wrong way of thinking. If he didn't wait for the small return after a long time he could avoid the so called negligible but in fact crucial loss he is in now.
But the most concerning point is that he refuses to admit that; I don't know if it is his ignorance or he has a different outlook towards the saving thing in relation to investment. If my title makes you astonished; please consider it as fun. I intentionally gave this title to draw your attention to it.
However, it was a long afternoon talking to him about this issue. I didn’t convince him with my point of view rather I let that fully upon him to think about this matter a bit more deep. I think he will try to understand my points of arguments about investment and savings.
The western concept of wealth is connected with a quantitative type of thought, invented in Greek. It involves the subtle instance of quantitative analysis of nature, the rationalization of warfare, and measurement in economics. However, the invention of coined money and banking was particularly important in relation to the general wealth management. But if we forget about investment and most importantly good and wise, we must suffer for that. If a person's strategy on wealth management is good and he has a good sense of investment; he can easily come across from the worst of it.
And, here I want to mention how Aristotle describes the basic function of money as a universal instrument of quantitative measurement. According to his observations, the individuals who poses wealth is pron to vulnerable fluxes of economic factors. Here we must remember that the wealth we are talking about has a subtle elasticity of demand, which is the percentage change in the amount of consumption goods demanded for each one-percent change in wealth. So, if we can't keep the pace or balance with it, we will not be able to maintain it properly.
So, here we are friend. But whatever it is, I muat thank my friend for opening this topic and giving me this suggestion. At some point he was truly right. I have a family now, me and my wife are living in small suburb of my country. Our daily expenditures are increasing drastically. It is high time I should take this pretty seriously. No matter what we should keep the balance and get started for the soul economic freedom for me, you, us!
So,et's try it out.
Thank you for reading my piece. Feel free to drop a comment and share what yoy think about it.
However, this is not the end my friend. Tomorrow, I will try to come up with the best investment advice that might help you to understand the whole thing more easily. Till then...
Chillax!