!!! CRITICAL understanding of SAVINGS IMPACT !!!

Saving money is by no means about self-torture.  It’s not about crafting shoes out of squirrel hides, boiling chicken carcasses t, and it’s not about avoiding the expense of doing something interesting.

Saving money is about a person gathering themselves and pulling a heroic move for their own future.

Consider this – if you had $160 right now, would you trade it for something worth $10?  Of course not!  The truth of savings and investment makes very clear that… FOR EVERY extra $10 spent on unnecessary things, it actually costs you $160 over a lifetime…

If you find a person in their 40’s – 50’s, who works 50 hours a week, has kids, and little time for much else – their lifestyle might lack a little freedom, and room to breath.  We get busy, and responsibility grows to enormous levels.  Many people in this situation would probably trade their shiny car and half the junk in their house to get a whole lot of freedom.

In fact, many people would chose more freedom, or rather, more control over their own time, yet there are some factors that make it difficult to break certain patterns.  We typically must make some effort to divert mainstream activity in our own lives.  Most of our choices actually have a united quality: most channels of activity are made available by someone who has designed those things to generate profit. Everywhere around us, it’s business.

If you find a person in their 60’s or 70’s who has very little money, a couple common health problems, and not much energy to work – their lifestyle possibly lacks the cash and energy to generate a substantial boost from a very low income.  They lack money AND energy.  At this point a person would likely trade the shiny artifacts of their past in order to secure that income boost!

The expenditures of today create a world around us, and those same choices can erase necessary things from our future, things that could otherwise have been.

A person in their 20’s or 30’sAt first it seems life isn’t giving them enough LEVERAGE. When you’re young, you stand at the doorstep of Compound Interest.  Your investments are incredibly potent: the most potent they will ever be.  If you could save just $2,000 a year over 40 years, the compound interest would deliver $333,000 to your old-age self.

That sum of money would then pay you $20,000 interest every year; so over the following 25 years you would receive $500,000 in payment.  That means your total gain is $833,000, and this comes from simple investment of 2K per year, over 30 years (a total of $60,000).

That money would literally pay you $20,000 a year in old age.  You just sit there, and that check keeps coming, with no effort needed. Remember that A LOT of people are working very hard, 40 hours a week, to earn that kind of money.  At a young age it can be easy to assume such a bright future (we all hope so), and preparing yourself now for receiving $20,000 a year in the future can seem like a waste of time.  Young people are instead handing cash over to businesses and loan debt at record levels
That’s all due to a very common ailment to human thinking: assuming everything is going to be alright!

For every $10 you save-invest now, it has the potential to turn into an additional $160 over your lifetime.

By saving $10 today, it means you can live half a week without working in the future.

         It can be enticing to live in the moment, and ignore the future – but the future is filled with people who either planned for retirement, and those that didn’t plan and have almost nothing.  The future is filled with people who already worked their body ragged: some of them and have little to show for it, and some of them plan smartly and and who retire safely, or retired EARLY in 15, 20, 25 years!!!

When we are young and poor, we understand how to get by on very little.  As we gain slightly higher incomes year to year, we begin to adjust to new expenses.  Those expenses frequently have a negative relationship to our own personal best interest – remember, for every $10 spent today, yes, $160 in the future.

It has to sink in…

2 five dollar drinks bought at a bar = $160 gone in the future

1 movie ticket = $160 gone in the future

Eat out for lunch = $160 gone in the future

Avoiding these nice/fun things ALL THE TIME would be difficult, and possibly quite lame.  But we must consider keeping these expenses in relation to the amount of money we are saving.  If we spend $200 a month on entertainment, and $0 goes to savings, then we are burning away a true fortune in the future.  We have to MAKE ROOM FOR SAVINGS, by working these trains of thought over existing costs.  We have to smash our personal version of the American lust for spending against the rocks.  Sure, seeing a 3D movie is cool, and having some drinks on a night out will be refreshing.  Do those things, sometimes.  Making room for savings might come from using cheaper alternatives more frequently.

Let’s look even closer:

When we see finances clearly, we know that buying a 30 dollar shirt versus 20 dollar shirt only seems to be a $10 difference.  Since we now know that $10 really means $160 in the future, the two shirts are really priced at $20 vs. $190!!! All because we spent an extra $10 today.

Being young frequently means getting a smaller paycheck, but that paycheck is really ENORMOUS when you consider a lifetime of Compound Interest.  If you could live poor for 2-3 years and save $45,000, then over a lifetime it would convert to $1.4 million dollars like this:

         After saving the $45,000 and putting it in basic investment funds, 30 years later it could have created almost $500,000.  That lump sum would then deliver you $30,000 per year for the rest of your life  (at 6% earnings).  The grand total of all money received from that initial savings would be $1.4 million dollars!!!  This means that 3 years of work would create a full salary for you to live on for 30 years: this $45,000 investment would convert into $1.4 million dollars!!


– If you save $10, you really could make $160.
– If you save $200 by fixing something yourself, you could really save $3,214 from the lifetime earnings that money could otherwise receive.
– If you save $1,000, then you really make $16,080…
– If you save $10,000 and put it Compound Interest for 30 years, you create $160,815…

You can actually buy $160,815 for the low cost of only $10,000

SAGA can save your friends! Feel free to like and share!

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