When we are looking to better our life financially we mainly focus around having as much money as possible. Saving every penny you earn will allow you to have more money, but is it the best way?
Saving is the best first step towards financial independance. You first need to have some money set aside incase you happen to end up in the hospital or have a flat tire. However at some point saving starts to lose it’s value. Saving money only allows you to achieve a certain (low) percentage of interest. When you have set aside money you should start thinking and acting on investment strategies.
I realized how quickly you could eat up a lot of time and money if you weren’t prepared. – Jim Messina
Try to avoid some spending habits on useless purchases and throw those into investments. Start with just a small amount of investing right now. Use money that you are willing to lose, because you would have used it anyway for paying those pair of pants you were never going to wear, that expensive phone that you can skip to buy for another year.
Any money that you put in investments now and that stay in there. Are worth a lot more money in the future. There are a lot of numbers thrown out there and none of them is correct, but the idea is true. That expensive coffee that you are buying this morning will cost you a hundred future coffees that you can’t spend the money on. If you use the coffee money make coffee yourself and putting the rest in investments you will have a lot more in a couple of years.
Every self-made millionare has had a time implementing delayed gratification. They forced themselves to make their own coffee, to keep driving that 8 year old honda for a couple more years instead of the new Mercedes. When you are standing at a dealer consider the opportunity cost of not buying the new car. Don’t give yourself all the rewards immediately. Keep yourself waiting for them, rather reward yourself with another investment.
If you ask most people you know if you should buy the new car or keep driving your current one they will instantly ask what car you are going to buy. Depending on what their preffered car is their answer will change. But instead of following their advise allow yourself to make the odd decision and maintain your current car. Instead of enjoying the new purchase go ahead and pile some money into investment and see it rise in the future.