Saving vs Investing: Should I Save or Invest?

So how does my investing strategy fit in with my cash flow creation system and how do I get my saving and my investing to work together so that I can maximize my whole personal economy.

Here's how it works.

As you have income coming in, we want to be having a portion of that that is ours to keep. That's your cash flow and we're setting that aside into savings. This is going into an emergency and an opportunity fund.

That savings is money that's safe, it's not going down in value, it's liquid which means you can access it and get to it and it is growing. At least somewhat.

What we want to do then is as we build that savings, we have at the bottom we have about six to 12 months worth of an emergency fund that we can tap into if we lost income or had something unexpected arise in our life. And beyond that, as we continue to save we're building this opportunity fund on top. That is money that we can use for investments.

So as we have this opportunity fund we then are saying, "I'm comfortable staying in cash "until just the right opportunity surfaces. "Not just any opportunity. "Not someone's fancy pitch or their "perfect deal that is too good to pass up "and everyone has to get in right now."

No, it's us saying, "I have a clear idea of exactly what type of investment "I'm looking for because I understand the value "that I have to contribute "and I understand the market and the investment "that I'm investing in."

As I'm looking for that type of deal I'm staying in cash until the right deal arises. Then I'm moving that money into the investment. I'm deploying my capital.

Whether I'm looking for growth or I'm looking for cash flow, either objective is the same. I wanna to invest with knowledge and control.

Now if that investment is generating cash flow or income the goal then is to increase my overall personal economy and I'm increasing my overall income.

So I have some income coming from my job but I also have some income coming from this investment.

If I apply the same rule and the same principle to continually put aside a portion of all that I earn I'm going to continue to save a portion of that income. You could save all of the capital that comes in from that investment or you could save a portion of it but either way, we want to put that money to work in the future, not just eat it today.

So what then you want to do is as you have money coming in from that cash flow and investment into your personal economy, you're saving a portion of that to replenish and rebuild up that emergency and opportunity fund. To deploy the capital again.

So as you make more money with your assets, you have income producing assets, that's more income to save as you build up that opportunity fund, that's more income to deploy again into investments.

So the more you save, the more you have to invest. The more you invest well, the more you then again have to save.

So they work together, hand in hand. The key is being comfortable staying in cash until just the right deal within your wheelhouse that meets your investor identity. That matches the criteria that you're looking for surfaces and until then waiting with the cash available to deploy.

#savingvsinvesting