Today, I want to talk about what would be the best way between saving or going out and earning more money. When I was young, my mom often told me to try to save and put money in a piggy bank. When I grew up, my mom said, “Try to be the best student so you can go and work for a great company and then earn a good income.” So then, what is really the best way? Well, in this case, I have to say that my mom was right. Earning and saving are both important. But, really, which one is more important?
To answer any question effectively, I like to step back and understand the big picture first. So, why do we need to save or earn? For me, I want to save or earn just because one day I hope I don’t have to work or do anything if I don’t want to anymore. I can just sit back, relax, and still have money coming into my life. And I still can spend the way I want and give money to whoever I want to give it to without worrying about where my next pay check would come from.
So then the next question that comes to me would be what really can make me sit back, relax, and not work if I don’t want to? Is it saving or earning that would enable me to not work in the future? The answer is neither. But actually, what really could make me do that is using money to make money or investment. So, really, it’s not saving or earning that our parents ultimately want us to do. Our parents actually want us to have a safe and comfortable life. And saving and earning are just a means to get there.
But the thing that will really get us there is using our investment jar to make money. Since saving or earning is really a tool to bring more money into our investment jar, so then we should start with an easier tool. Don’t you think so? The easier tool is saving. Because every dollar that you save is almost two dollars you earn because of tax deduction, insurance or employment insurance, and others, depending on where you live. If you live in a country in the Scandinavian area, those deductions and taxes are so huge so that every dollar you save is going to be two dollars you earn. Let’s say, you want to have $1000 extra. If you go and work, you have to work to actually gain $2000 in order to bring $1000 home. So, this is why I say saving is easier and the most effective way to keep your money to yourself.
We first have to go and look at our life and our spending. Where can we plug the leaks? Then, we stop that leak first. If we already stopped all the leaks of money in our life, we now have to look into earning more in order to increase this money into our investment jar. So save first, and if you look at everywhere that you can save, and still you don’t have enough investment seed for your investment jar, then we have to take that extra step to go and get a part time job. Maybe do Airbnb, renting, uber, or tutoring. Anything that you can come up with in order to bring that extra dollar back into your life and start to create that investment jar and grow your money from there. So, one day this money will just bring enough income for us, and we can sit back and enjoy our life, family, and friends without worrying where the next pay check will come from.