Why You Should Not Save Money.

“Wealth is not his that has it, but his that enjoys it.”–Benjamin Franklin.

That is the most accurate and logical quote I have ever read concerning spending money. It might be true that saving money can save you from life’s vagaries. However, is it really worth it? Don’t you think that life is way too short to act that way? Listen! If you are stuck between, “ I need to save money and I only live once” keep on reading my article.

In fact, I want to tell you that you should not save money for several reasons that I will list below. You rather invest it!

-Reason one: Inflation.

First, your biggest enemy is inflation,  which means the steady increase of prices for goods and services over time. Inflation is the reason that a hamburger and a coke cost less than a qtuarter in the 1960s but pushes $20 today. Or one of the reasons that average rent in the 1970s was $175 and almost $1,400 today. It eats away your savings! In the U.S., the inflation rate is generally around 2-3% each year. This can be thought of as a negative number because it is decreasing the value of your dollars. This means that $100 saved today for retirement will only buy $45 worth of goods when you retire. After 10 years, $10,000 will be worth about $7,600. You’ve lost $2,400 simply by doing nothing! So now we both know that instead of keeping your money in a savings account you need to find a place where it can grow over time.

-Reason two: Federal Withdrawal Limits.

Second, federal withdrawal limits are your second enemy. Due to regulation, savings accounts have federal limits when withdrawing funds, which is six times per month. The banks will charge you a fee if you exceed the federal limits, or they can change your account from savings to checking accounts if you continue on withdrawing more than six times per month. Moreover, we know if you find easy access to these funds it is too much of a temptation, then that could make long-term saving difficult.

-Reason three: You Rather Invest!

So, my ultimate advice is to invest your money! Have you ever heard about compound interest? It is what will allow your net worth to grow exponentially as opposed to in a straight line. Even the smartest man in the world has a famous quote about it. .

“Compound interest is the Eighth Wonder of the World. Those who understand it, earn it…those who don’t…pay it.” Albert Einstein. Taking advantage of compound interest is done through a technique called investing. You want to invest your money in a place that will allow it to earn a higher return. By investing your money instead of saving it, you’ll be able to earn a rate much higher than inflation and watch your net worth grow exponentially.

I summarize wealth in three steps:earn money, spend less than what you earn, and invest! If you follow this strategy you are more likely to be one of the wealthiest people in the world, like me 🤪. Am I right on the money? Do not hesitate sharing your comments with me!