I am almost certain that when it comes to growing wealth you may think that investing must be better than savings in accumulating wealth but that is really not the case.
Savings or Investing: Which is Better for Growing Wealth?
According to T. Rowe Price…
a 40 year old who has $200,000 saved, with 60% in stocks, and saving 10% of a $100,000 salary (including company match) has a 52% chance of retiring with 70% of pre-retirement income.
If you then decide to boost your stock holdings to 80% of your savings, you increase your chances of achieving the same modestly to 57% or by 5%.
However, if you boost your savings from 10% to 15% your chances of retiring on 70% of your pre retirement income increases by almost 33 percent to 69%.
Clearly indicating that you stand a better chance of growing wealth long term by focusing on increasing savings.
Focus on savings then investing
Therefore your wealth strategy should be to focus on freeing up as much of your income as possible for savings and why I suggest that you start to save at least 20 percent of every dollar you earn.
This has a two fold effect as the more money you save means that you have more money to invest and the more money you invest means the faster you will be able to grow wealth and achieve financial independence. Because no matter what investing money is still important to creating wealth.
So you really do not want to be either savings or investing but making sure that you use both of these critical vehicles in your wealth creation.
How to Save Money
How can I save money is one of the frequently asked questions and luckily for you I have written an eBook on the subject – Taking Control of Your Money
This eBook lays out eight simple steps that you can start using today to begin saving more money and then helping you to manage the money saving process.
Take a look at this video that explains why this is so important if you are to achieve the financial success and live the life of your dreams.
Whatever decisions you make today regarding your savings will dictate the financial future you will actually have.