Save Automatically Invest Intentionally: Saving vs Investing

Often when we put money automatically into retirement plans, things like 401ks, 403bs, IRAs and Roth IRAs, this is usually through a payroll deduction from an employer. And what ends up happening is we're actually investing because that money is at risk in the stock market. Or in the market somehow and has the ability to lose value.

So often, inadvertently, we end up investing automatically without forethought, just an automatic process that always happens in our financial life and then we save if there happens to be money left over at the end.

Now the wealthy do the complete opposite. And they invest intentionally with a specific focus on what investments meet their criteria for the threshold, the dollar value they're looking for, the right investments that they control that are within their sphere of knowledge and influence. They want to make sure that those investments are clearly aligned with their specific investor DNA.

Now on the saving side, they're saving automatically. They have a rule built into their life that they are saving a portion of all that they earn. Part of all that they earn is theirs to keep. They are living on less than they earn.

And the way to do that is to go ahead and put an automatic process in your life, just the same way a payroll deduction works. But, it's an automatic transfer in your financial accounts, in your bank accounts, where you have an automatic transfer every month that comes off the top before you spend anything. So you have from checking you have an automatic transfer over into savings.

This makes sure that you are automatically saving each and every month. Now when you build up that savings, that liquid, available, usable cash that's safe and in your control you are able then to make a decision, how do I want to use this to invest in opportunities that I know and I control.

So instead of investing automatically and putting money at risk and then saving if we get around to it, change that around, reverse the role and save automatically so, you don't even have to apply your consciousness. It's not wasting energy and mental processes in your mind. It automatically happens.

And then, use your mental energy to determine what are the best investments for me. Not just what is an investment that might happen to work out. But what are my best investments?

#MoneyAdvantage