There are many ways to become a millionaire but saving as much as you can might just not be one of them.
It is true that you need to spend less than you earn to accumulate savings. But saving money is not enough; you also need to put your money to work in order to build wealth.
Saving money has little to do with getting rich
The act of saving money won’t, in and of itself, make anyone rich. Ordering water instead of soda or beer at restaurants might save you a few hundred dollars over the course of a year, but let’s face it; a few shillings aren’t life-changing money. If ordering water were the easy button to achieving early retirement, we’d all be retired and sipping margaritas in paradise islands.
While many have been influenced to save without a defined goal, saving should be tied to another end goal that involves investing money.
It’s a reason why most millionaires almost never attribute it to their wealth collection.
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From the study of multi-millionaires and billionaires in the last couple of years, not one hinged their success in amassing wealth on saving.
A good number of them mentioned taking advantage of opportunities, meeting needs, solving problems and surmounting obstacles as the key that propelled them to achieving substantial wealth and fortune.
Money is always depreciating.
This is the major reason why you cannot build wealth just by saving money because the money’s value is constantly being eroded.
The prices of goods and services constantly increase while the value of money used to purchase them goes in the opposite direction.
In order to beat inflation and maintain your current standard of living, you would need to make your money grow at a rate that is equal, if not higher than the current inflation rate in order to make a decent amount.
And the only way to do this is to put your money to work by investing.
Don’t Stop Saving
Even though savings will not make you rich, by all means, don’t stop saving.
Saving is usually one of the first steps anyone who desires wealth needs to take for it is proof that your money is under your control and not vice versa.
The key is adding other essential actions such as investing to your savings effort and it eventually begins to yield wealth and fortune.