What is wealth? You can call it by many other names, such as – "prosperity", "riches", "affluence", "security" and so on. How do you accumulate wealth? Most people would answer, "By maximizing your earning capacity."
However, this is only one part of the story. The whole story involves two parts –
(i) earning and
(ii) retaining what you earn.
Earning Money Is Important
You need to earn in order to live. You need to provide for yourself and your family, and the more you earn the more in-charge or in control of your life you will feel. This is a false feeling of security however, as you are liable to loose the means of your livelihood without warning. This would leave you not only unprotected and vulnerable, but also completely helpless!
Savings on the other hand, provide you with solid ground under your feet. No matter how much you earn – and you will find it easier to save when you spend less and earn more – you need to put something aside for the time when you might have no income to count on. Let's say that such a condition never comes into your life, and you will always have a steady source of income.
How would your savings help you?
Savings Show That You Are Good With Financial Management
In most cases, expenses expand in direct proportion to income. When you apply for a loan or mortgage, the banker will definitely classify you as per your financial capacity. If you were to compare two people who had the same income (high-end) and the same loan request, the one who has the more savings would win.
Why? Because the savings shows that the person is financially disciplined and understands the value of money. A person who spends as much (and in many cases much more) than he or she earns, can become a risk for a bank or financial institution, depending upon market conditions.
Savings Promotes Wealth
A valid argument here is that "You cannot expect pennies to grow into millions of dollars, no matter how "disciplined" you are with your money."
True! But just as any long journey begins with a single step, millions of dollars start with only a few cents. Save for just six month, and you will be able to understand the happiness and security that your savings can bring you. Besides, who said that your savings have to be in pennies and cents?
Invest your savings in safe financial vehicles that will multiply your money over time. Learn about the best methods of investment, or hire the services of a financial consultant for this purpose. It's important that you set aside a certain amount as your savings; you need not just keep it there in the bank. Use this money to build a safety net for yourself and your family so adversity will never bother you.
You will observe that, side by side with the growth of your savings, your feelings of security and safety will also increase. Money is a vital aspect of our lives today; and savings ensures that you never run out of it – no matter what! |