Changing my Sense of Financial Direction
Money is the hardest thing to live without. And yet we have such a hard time earning it. Most people never earn enough money to support themselves. They borrow money to pay for vital things in life like homes and cars, or they settle to a life in poverty.
Some economic theories say that only a few people will ever have much wealth. That is because we are trained to give our wealth to a few people who take it and shape it into more wealth. Supposedly this benefits everyone by creating jobs and opportunities.
I want to think about money in a practical sense but every time I set out to do so I cannot help but picture how wealth is controlled by a few people. Is that because most of us are so poor at managing money or is it because managing money is an impossible task?
We have to make small financial choices every day. On some days we may make a big mistake with a credit card before we even realize what has happened. And then we may waste our money on wild hopes like lottery tickets. Only a few people ever win the lottery but millions of people play.
Even supposedly safe financial investments may come with high hidden costs. And people who consult financial experts sometimes find the professional advice is impossible to follow. Just because a wealthy person tells you how they got out of debt doesn't mean that will work for you.
In the world of making money versus saving money, is one way better than the other or do we really have to do both? By "saving money" I mean "spend less than most people spend" for the same things other people get. You can save money by putting it in the bank but you also save money if you buy a car everyone else pays $20,000 for at a price of $18,000. Is it saving money if everyone gets the $2,000 discount? I don't think so.
Even when you're just learning how to invest small amounts of money you should be looking for a better deal than other people get. By saving money over what other people pay you stretch your investment dollars farther, or have more dollars left over to put in a savings account.
The early life experiences of some people influence how they think about money, saving, and investing. I grew up in a house where my parents had enough money to do more than get by. But my parents spent all their money and had very little when I left home. I don't want to end up like that.
And for me it's not as simple as looking for coupon sites and saving money on my groceries. I want know that I can save a lot of money and never have to depend on anyone else again. Is that too much to ask?
Today I made the decision to spend less than I earn and to invest the money I do not spend. But I am still learning about how to make wise investments. So meanwhile I am putting my money into a savings account. But the interest on the savings account is so little I know that if I don't move that money into a real investment it will lose value against the future.
I think wealthy people are just better at making simple decisions because they are willing to make sacrifices. They wait for the rewards they want to enjoy but most people enjoy as many rewards as they can, even when they cannot afford them.