Saving for nothing: An Unprofitable Practice
The idea of saving has been in massive adoption for years and I must say has paid up to some extent. To start-up a project, business or investment you will need to raise money most times through personal savings. In my own view, saving can add to discipline an individual and boost confidence when you see yourself over time having some backup cash or reserved money in your wallet or account.
The question left here is, why did you save? for rainy days, to retire well or to invest in a business or project. Let's delve into the idea of saving and how one can be saving for nothing when the right mindset or idea is not deployed in this savings habit. Sit back, relax, read and learn.
A little side talk about savings
There has been a constant debate between oppositions who have in one aspect supported the motion that savings is good and the other who have kicked against the motion, viewing savings as hoarding money that has no value; after all inflation has continued to devalue our currencies on a daily basis. I am not here today to side with one of this group. I will present my facts just as perceived and you will be left to analyze. I have seen several government workers getting part of their salaries into savings for the period of how long they continue to be in office. This can take twenty to twenty five years. I have seen individuals who are well disciplined to make sure there is always a certain percentage put to their savings account weekly or monthly. The discipline part is good, I give a thumbs up for that, buy the idea of seeing savings as a means of tackling rainy days or retiring well in my own few is unhealthy and unprofitable. Am I against savings, not entirely but can one really call savings an investment?. How profitable is saving?Why save for too long? And why choose to save for only rainy days?
You are Saving for Nothing
When Saving for rainy days
What do rainy days bring? Profit or loss, assets or liabilities?The idea of having reserve cash when things go bad or for unexpected scenarios should be included in budgeting plans as miscellaneous savings. Many have mismanaged funds that could be used to expand their means by stacking it up for rainy days. Why prepare yourself for liabilities(expenses) instead of opportunities(assets). If you could channel such discipline and commitment to savings for opportunities then expenses for unforeseen challenges will also be mitigated as your profits will certainly increase. Piling so much funds for the unexpected has shrinked many. Funny enough since their mind is set on the unfair to happen, when it finally happens even the savings most times is not enough. They will have to venture into debt because they had money that generated no returns. There is a need for a financial rearrangement when one is saving just for rainy days.
When Saving for Retirement
I view the idea of saving for retirement as over saving. Opportunity is embedded in time. The earlier one realizes that saving money for fifteen to twenty or to even thirty years to secure a good retirement fund may do him no good. First, the value of your savings is on a continuous depreciation against commodities and services.
Let's say for instance, a man wishes to save $200,000 which in his then calculation is enough to secure a good plot of land to build his house after retirement in the coming fifteen years. What he has failed to realize is that the value of land will continue to appreciate due to economic situations. After fifteen years, while he might have succeeded in the investment, he will be left with savings that may not afford the life he dreamt of.
On a second consideration, over saving also leads to under opportunity. Yes, while all hopes are placed on savings that cannot be used to make gains in such a number of years, we are certain you missed one shot or another. Surprisingly one that could have generated you the funds even in five to seven years.
Saving for Nothing is a distraction
It might surprise you to hear this but focus itself is a distraction. The moment you put your head to tackle one thing, you have been distracted from the other. If you don't get it right, you will get punished. Time according to entrepreneurs is a unique factor that cannot be altered or rendered when exceeded. You have missed 100% of the shots you never made. When making savings decisions, much needs to be considered to avoid impending financial regrets.
If you never saved to invest it was no savings at all
As I earlier stated, I am not writing to oppose or propose the savings motion. I am only making one thing clear, saving is good if it is meant to increase your income. If a savings you focus so much on cannot help expand your means, then I will say, you saved for nothing and this practice is unhealthy. Any money that does not make you money will end up costing you more money. Go back to your drawing board and make the needed analysis to adjust. When I needed funds to start up my business I had to save, note, I did not over save. I gave myself a reasonable period to make this savings a success and it paid off. But keeping money in account for too long or rainy days is a different story entirely.
To wrap things up let me add, the habit of savings can be rewarding if channeled to the right savings decision. Learn to leverage your savings. The economy is getting tougher and tougher. With the continuous depreciation in currency, there is a need to restructure your savings mentality. Save to invest or reinvest. I am not saying you should not be prepared for rainy days or retirement benefits. Make a substantial chunk of funds in your custody to undergo investment. Money is a slave, it is meant to run errands for your comfort and financial freedom.