We always hear that we must save. However I opine, if we save without investing, then I would think it might be better off to spend instead of hoarding the earnings for no apparent reason.
Apart from saving for emergency purpose, if we leave those excess fund in the bank saving account for 30 years without investing, it would not make us richer. Instead it makes us poorer year by year without us realizing it. I know it is a big challenge to save up. However, if we already make great effort to save and are prepared to ‘suffer emotionally’ for not being able to spend our hard earned money now, I opine all the more we should make our saving work harder for us; or at least trying to keep up the inflation and protecting the value of our wealth.
$1.359 Mio vs $360k
If we save $1000 per month for 30 years, we will see our bank account having $360k. However, the $360k of 30 years later, due to inflation (assume 3% p.a), it is only worth $148k of today’s value.
On the other hand, if we invest those $1000 monthly saving for 30 years at the investment return of 8% p.a, we will get a whopping $1.359Mio
$1.359 Mio vs $360k, that is about 3.8 times more.
Conclusion
In conclusion, if we do not invest, then it might be better off to spend those hard earned money now and enjoy the current value of the wealth now. If we want to save, then make sure we wisely invest them.
Do you need advice on investment for growing your wealth? Do drop me an email [email protected] for a non-obligatory discussion.
