41) Not How Much You Earn

41) Not How Much You Earn

It’s not how much you earn, but how much you save now that will save your future.

Many people earned a lot of money, but yet they still fall into Financial crisis. There are many stories of famous actors who earned millions of dollars a year, but still are in debts.

Many people don't understand or refuse to understand the very basic principle of money management. You have to save the money for future expenses. When you spend now, it is no longer available for future use.

The money you have now is a just a medium of exchange. You cannot keep food or things for long term. First of all the food will get rotten in a short time. For things, if you buy them now, you will soon run out of space to keep.

Therefore money is an easy want to store the value you have. You can easily keep 10 Million dollars in a bank. It is all in electronic data. No need to keep the physical cash notes. Also, no need to worry about the money getting rotten.

The money you saved now in the bank is to be used for the future. As long as you don't use it, then it is saved for future use.

If you wish to increase your money, then you should consider suitable investments to preserve and grow the money better. Keeping in the bank has its limitations. Banks normally give a low return compared to other investments. Banks are very good in preserving the cash value.

However, be aware of inflation. Inflation will reduce the number of items you can buy with your future money. In financial terms, inflation will reduce your purchasing power.

In conclusion, save your money for your future use.

Spend less than your income.