This isn’t my quote, I took it from Financial Lituation, but it resonated with me when I read it. This is a lesson I learned when I first started investing. I realized that I had always struggled to just put money into a savings account and let it sit there but I was great at stashing cash in a brokerage account and playing stocks. As Jim Cramer says, investing is a way to trick your way into saving. These days investing is the only way that I can save. I just can’t let money sit idle.
Save to invest don’t save to save – Grant Cardone
Nationwide we have a massively low savings rate but I don’t think it is because people don’t want to save. I think it is because saving is boring. When you save you think of all the fun exciting things you can do with that money. You think about the stuff you can buy, the places you can see, having money sitting there doing nothing is like torture. Thus people use their money for excitement and the yolo. There is a better way though. There is a way to have fun and build wealth, insert investing.
Consumption kills wealth. Investing kills consumption
When you invest you effectively do exactly what you would be doing if you are saving which is place money outside of the realm of consumption into the land of delayed gratification. What happens though is that you now get to see that money live and active. Its not dead money making .05% taunting you to take it and have fun. Instead, you get to read the news and see how the news impacts your money you get to see it go up and down and stay the same. This creates a chemical reaction that can kind of be like spending money on stuff, the difference is this chemical reaction makes you wealthy not poor. Soon it becomes a game. You are researching and reading and asking questions. That activity alone can replace the stimulation that comes from spending. By replacing a bad habit (spending) with a good habit (tracking down investment opportunities) you make yourself wealthy. This is similar to how replacing food and exercise habits can make you wealthy.
Consumption is the killer of wealth but investing kills consumption. In economics you have two choices with your income, either consume or save. Your money can ONLY be used for those two purposes. If you don’t consume you save if you save you invest. If you consume you can’t invest. Thus, you have to deny yourself years of consumption while you save up to become a capitalist via the capital markets. This denial will then give you the nest egg that should never get spent on stuff. Keep it and use it as a sword over and over and over again.
The key is that once you get addicted to investing, you won’t see money as an opportunity to spend anymore, instead you will see it as more capital to add to your arsenal of investing. That bonus is more units, that windfall is more units, more units means more flows which then means more units.
Investing becomes addicting just like consuming becomes addicting. Have yo noticed that when you buy something you feel like you need to buy more? You aren’t chasing the stuff you are chasing the feeling that the stuff gives you when you buy it. You have to master your feelings to attain wealth. Channel those feelings toward wealth and away from the consumption function.
We as a culture have spent so much money consuming things that become the late model. We buy shades that get old and dated. We buy cars that depreciate. We buy electronics that get updated. All of this consumption on things that are actually designed only to last until the newest model is robbing us of our wealth. It hurts to not have the latest while everyone around you is stunting but they are trapped and they don’t even know it. Instead of consuming you have to invest.
You have to make that sacrifice. Investing is a sacrifice. It is supposed to hurt and be uncomfortable. Just like going to the gym hurts and is uncomfortable. Feel the burn!
Keep rocking with us and keep telling your friends about this great thing we are building. If you haven’t yet joined the club, haven’t gotten your taxes done or haven’t filed your LLC, email us at firstname.lastname@example.org, what are you waiting for???
Be great, invest well,