Saving For a Rainy Day
In the last 12 months, we have experienced a significant increase in really strong windstorms. It is actually a real thing if you google it! Have you experienced changes in your weather too? Weather is historically a changing thing and the changes take years to make so most of us won’t notice it unless there is an impact in our lives. We have experienced large trees falling, knocking out power grids and damaging properties. Trees that have been in place for a very long time are knocked over at their roots by the strength of the wind.
An event like this or forest fires, hurricanes or mudslides are acts of nature that none of us can foresee. AND we all know that just like the seasons will change so will weather. We are currently moving into spring, there are breaks of warm sunshine then days of cold and snow flurries.
It’s hard to believe that winter is passed, and spring is right around the corner but these weather patterns tell us that yes it is happening again! If there is an act of nature that impacts you, how prepared will you, your family, and your business be when the unexpected occurs?
When I was young I remember my Mom teaching me the importance of saving for a rainy day. She will laughingly relate the story of when we took family road trips in the car. She would give my sister and me a roll of nickels and every time we asked “Are we there yet?” or “How much longer?” we would have to pay a nickel. Without fail, I always had most of my nickels at the end of the trip. If only it was that easy today to keep our money.
Saving today is a strategy.
There are those that will tell you that putting a percent of your earned money in a savings account is a discipline that will pay off in time. While the discipline of consistently putting money to work in ways other than lifestyle is a great thing, savings accounts are really not a great strategy. There was a time in our economy when that might have made some sense when markets were on a continual upswing.
However, in the last 20 years, most will tell you that putting money into a savings account, which pays a rate of return lower than the rate of inflation, means you are actually going backward with the value of your dollar. Even if your funds are in an IRA savings account they are not safe from this phenomenon.
Investing is another way of saying saving. When we use this term there are many more options available to us. To me investing is making your money do double or even triple duty for you depending on what vehicle you choose to invest in. I always tell my clients there are a million ways to make money you just need to choose the game that is a good fit for you and then learn how to play that game really well. Once that game is flowing smoothly it’s time to learn another one.
Some options are investing in real estate, businesses, stocks, bonds etc. Each of these has its own list of pros and cons and requires some learning so you can make the best decision for you about how it will fit into your plan for building wealth.
Of course, it all begins with saving for a rainy day.
First building the reserves to manage day-to-day when something happens (because it will, that is life) and then also saving for a sunny day, the things that make life fun.
Do you allow yourself to dream of vacations … and then actually plan for, save for and take them?
For many, there is so much more month at the end of their money that saving has become a concept that is far off in the “someday”. Begin to build the muscle with whatever figure you can, I guarantee you it will get stronger and stronger with time. Already started and looking for ways to invest? Give us a call and let’s talk about your goals and what a good fit for you would be.