A discussion which I had with my son, this morning –
Me: What is more Important – Earning or Saving?
Abhiram: Earning
Me: Why?
Abhiram: Without Earnings we can’t save anything. So, earning is more important.
Me: After Saving?
Abhiram: Investing
Me: What is Investing?
Abhiram: If you want to make your money grow, you invest
I’ll leave it here….
Everyone should do one basic arithmetic exercise. It’s a simple one.
Questions to answer….
How much have I earned till date, from the start of my career? (from one’s profession / business only – do not include any gifts, inheritance etc.)
How much have I saved / invested from that income?
Finally….
Check that total corpus today & calculate the split between – the SAVED / INVESTED COMPONENT & INVESTMENT RETURN COMPONENT – e.g. If the total corpus is Rs.100/- …Rs. 70 is the saved / invested amount and Rs.30/- is the accumulated return.
Why this exercise? An eye opener on where we should be focussing better.
For anyone who’s worked for atleast 20 to 40 yrs….this figure should tell their entire Money Life decisions
Earnings first
Savings & Investment next
Returns last
Without the first, the next two are not possible
Without the second, the last is impossible
but,
Without the third, Life is still possible – but only, if the first two have been done with reasonable common sense and absolute discipline
Yes, you don’t need great returns to lead a decent lifestyle as long as you’ve Earned and Saved very well.