Money Makes Money, No Sacrifice Necessary

I have explained over the years why most savings accounts actually cost money rather than earn money, and why the bulk majority of one's life savings need to be in stronger earning vehicles in order to best meet one's financial objectives. The thing is, unless you are beating the rate of inflation, you are losing money essentially. If the rate of inflation is 1.5% (something I might give my left nut for right now, lol) and a savings account earns a half a percent, your money is losing 1% of its value each year. BUT, as for cash back cards? I love them. It's one way to even make spent money have at least SOME value. But you are right. Unless you pay the card off each month and avoid the interest charges, there is no value at all. I also use an app called Upside which saves me some money on gas, groceries, and some dining out. The bottom line here is that one can make their money earn for them or they can leave themselves having to make it a constant to have to go out and earn it—and beyond that, not having money set aside also leaves one in a worse situation when things happen that require it that, if not available, throws people into debt, further exacerbating their money issues and prolonging their work life.

@porwest — I’m sorry, but inflation is 1.5%. Per hour, of course.

@FourWalls The way things are going, I BELIEVE that. lol

It is cumulative savings over time. You start with $1 and repeat that over and over again. Or $10 and do that over and over again. Essentially people should be saving at least 10% of their income. But I recommend more like 20%. There is also compounding to consider. For example, if you don't spend the earnings on the investments it adds to the pile and builds faster. Now you are earning money on money earned as well as new money contributed.

I always try, even though I know it all mostly falls on deaf ears. It is what it is. lol

@porwest Yes blind investing leads to nowhere.

One should not be investing in anything not having done the homework to determine what a reasonable potential return should be.

@avi256 Well, it leads to becoming broke. lol

@porwest People just don't think ahead. Most 20-year-olds just don't get the concept of planning so far in advance.

@LindaOHio It's part of the reason this sort of thing should be taught in schools.

I always do my best to try. It mostly falls on deaf ears though. Most financial stuff does. That's why we have so many poor people than rich people honestly.

Being prepared in life can certainly save us a lot of grief, heartache, and debt. It can also leave us more well equipped to handle our finances when we reach the end of our work life.

@porwest Absolutely you said it right. To save for rainy days.