In August 1929, John J. Raskob, an investor and developer who became famous for building the Empire State Building, said the following about getting rich by saving money:
“No one can become rich merely by saving. Mere saving is closely akin to the socialist policy of dividing and, likewise, runs up against the same objection that there’s not enough around to save.”
I always thought that saving money was the way to riches. The platitudes about saving can be found everywhere in society.
Pay yourself first. Build a little nest egg. Save for a rainy day. A penny saved is a penny earned. Money doesn’t grow on trees.
All these sayings tell you that you should be saving and avoid taking risks. After all, you don’t have a money tree, and you never know what will happen in the future.
If you’re not investing, you’re missing out
No matter how hard you save, you’re always limited by your earnings. While it sounds nice in theory to earn more, it’s not so easy.
This is what Raskob meant when he said you can’t get rich by merely saving.
I agree with that 100%.
If you save diligently for 40 years, you will end up with a lot of money. But you were never really rich.
Being rich means that you have way more money than you actually need. It means an abundance of money.
To become rich, you must have investments.
As you go through life, your investments grow with you, and so is your net worth.
You’ve got to experience the power of capital gains
My net worth has doubled during the past two years. Is it because I sold more books or made more money with writing? No.
In fact, my income from writing has been pretty much the same over the past four years.
If I relied on saving my money, I would not have a 7-figure net worth. More than half of my worth comes from capital gains on my stock and real estate portfolio.
Before I experienced these types of gains, I knew that investing was the way to riches, but I never really felt it until a few years ago.
And as the years go by, I feel it more and more. This is something I hope you will experience, too.
When your investments do well, you no longer feel the pressure to do work so that you can make money.
You can move freely and think about how you can actually make a contribution.
So invest more! Your future self will thank you for it.
