Why should you save and invest? The answer is simple. You save now so that you can spend it later. You invest the saved money so that it grows and you can spend more than what you had saved.
Jonathan Clements has been writing on personal finance for the last 26 years. He believes that building up wealth delivers 3 key benefits:
- If you have money, you don’t have to worry about it.
He notes that this isn’t just true for the wealthy. By living below your means, you can obtain a degree of financial control even if you aren’t rich. Avoiding debt gives you freedom. - Money can give you the freedom to pursue your passions.
What is it you want out of life? What gives you a sense of purpose? These are the sorts of things you want to pursue in retirement. Better yet, try to structure your career around something you love to do. (My wife and I are both doing work we love. It makes a huge difference.) - Money can buy you time with friends and family.
In fact, Clements says, true wealth comes from relationships, not from dollars and cents. Social capital is worth more than financial capital.
Financial success has very little to do with your ability to pick winning investments. Instead, what matters is stuff people never think about…The ability to delay gratification is critically important. Similarly, a lot depends on maintaining steady employment and staying in good health.
We generally think of saving money to satisfy our urge for material things. Hardly do we see the bigger picture. We forget why are we trying to earn money in the first place.
