WHY SAVING WON'T MAKE YOU WEALTHY.

           WHY SAVING WON’T MAKE YOU WEALTHY.

Saving is a big deal for everyone in these current times but have you ever sat down and wondered why saving won’t make you wealthy? More and more people are placing a lot of emphasis on saving more and spending less and this sentiment could not be more wrong.

Saving (wealth accumulation) is one of the most important steps in your journey to financial independence but it does not translate to increasing your wealth. Investing (wealth creation) is the key to increasing your wealth.

Majority of the people also think that in order to be rich you need to have lots of money in your bank account however this is not the case. Money is just a medium of exchange whereas real wealth is acquiring assets and investing to further increase your cash flow.

Allowing your money to just stay in your account is not enough to make you rich, you have to make that money work for you and let compound interest do the rest. 95% of the world has to work hard and earn a living just like you so the amount of money you earn is not important, what you do with the money is important. 

So, what are the reasons why saving won’t make you wealthy?

Saving Returns Are Small.

Bank interest rates on savings are very low compared to their high-interest rates on loans. Banks use the money you have saved up to invest it via lending and earn a lot on their high-interest rates and then give you a very small percentage of this income. 
Saving must go hand in hand with investing to build wealth. If you intend to create wealth save then invest afterward. Every rich person is always looking for opportunities for them to channel their money to work for them.

Banks Can Fail.

Over the years we have heard of cases where banks have failed due to mismanagement by the top brass. And rarely do depositors get a full refund of the savings they have lost.

Unexpected Expenses That Deplete Your Savings.

Sometimes life takes unexpected twists and turns such that you are forced to increase your spending or tap into your savings account. For example, if you lose your only source of livelihood. Even if you have an emergency fund that could last you up to six months, if you remain unemployed for a very long time it may prove to be inadequate. You will eventually be forced to use up your savings.

Saving Can Limit Your Hunger To Grow.

Amassing wealth is a commitment only you can sustain. Saving and playing safe gives you a false sense of security that your future is secure. You become overcautious when opportunities to increase your wealth arise because you are afraid of the risks. 
Amassing wealth has an element of risk that you must be willing to take if you want to increase your wealth. 

Despite the fact that saving won’t make you wealthy, do not be discouraged. Keep on saving because your savings will eventually grow to be your investment capital. Savings are also a reminder that you are in control of your life, finances and your future.