Saving alone wont make you rich (what you need to do instead to get wealthy)

Being able to save money and manage your spending impulses is a powerful ability, and yet it’s “only” one-third of the wealth equation.

What’s the other two thirds?

Well, barring

  • being born in a rich family
  • marrying into money
  • hitting the jackpot

My other two thirds are tried-and-tested truths:

Ability to earn more

I’ve said this before:

there’s only so much you can save

Yes, saving is a powerful ability, but there is one big, big problem with it: there’s a ceiling cap on how much you can save, because saving is based on your actual earning and spending.

I’ll give you an example: if you earn $3K and spend $3K, all you can cut back on in savings are max $3K (before deducting expenses for essentials such as roof, food, transport etc). In the end, it’d still be within the $3K.

BUT, and it’s a biiiIGGGGG but, when it comes to earning more, there is no ceiling. If you start a side hustle, you may earn $100 in the first week, $350 in the second and up to $1000 by the end of the month. You can scale to $3K/month and even higher, grow the business (or not, depending on your preferences) and going up to $10K/month and more too.

You get to network with different individuals, perhaps even find deep meaningful work too.

That’s what I like about entrepreneurship and side hustles – there’s no limit, once you get past the first hurdle of starting and staying the course. I spend most of my time here.

Ability to research, invest/reinvest and be patient

The last and equally powerful ability revolves around investing, basically referring to the ability to getting all your hard earned (and saved) money to work harder for you.

It’s about making your $1000 earn another $1000+++ and more for you, and not losing your principle investment as much as possible.

Why these 2 skills are equally (if not more important)

  • counter inflation: prices are going up and every $100 you save today will become less valuable next year (due to rising interest rates and inflation, causing prices to go up)
  • building passive income from your hard earn money will provide you cashflow which you can use for daily expenses and reinvest to make your investment returns work even harder for you