Should you focus on savings or income generation?
This question is known and debated amongst, by several different people not only in the financial world but in life in itself. The reality behind this question might be strange to some individuals as they might choose either of the two. Some readers might have already answered this question in their minds, based on their lifestyle and experiences.Several types of research have led us to find out that attracting wealth has a lot to do with spending habits. When you earn less, there is a tendency to spend in that way, knowing that there is less money to fall back onto, so saving is maximised. The habit that is seen in most people who start earning more is that they begin to change their lifestyle then and there. They change their spending habits following what they make, so they are left with the same amount of money as before and the same situation. Less money to fall back onto and less money saved.
However, it usually does not end up in this for most of the situation that we encounter. Typically, the purpose for people to earn more money is to upgrade their lifestyle. Also, to live a more lavish life that they might have imagined to have when they just started up with a career. Short term luxuries seem fantastic to all of us. However, we need all that money in other specific situations; we usually lack it and fall into a loophole of a money trap problem. There are several things that our minds cannot foresee amid the excitement of earning more. This could include health emergencies, financial emergencies, a sudden loss in business, a sudden loss in an investment made, a lost job or even a natural disaster.
It’s not about earning more or spending less.
It’s about earning more AND spending less.
If your goal is to attract sustainable wealth, you need to be doing both.
It is true. Your search towards earning more certainly shouldn’t stop, but you need to make sure that your spendings remain intact. The only way to maximise your earning is if you save a lot of what you earn. Depending on where you are in life, you can begin to think about the long term and how these savings themselves can help you make more money. What you earn adds to what you have already accumulated. It might be exciting to see that much growth in terms of money in your account, but a lot of things need to be considered to KEEP that money.
Investing is one of the most powerful tools that can allow you to accumulate wealth over a period of time. It is an excellent long term solution even when it comes to sudden changes in one’s life since the passive income can be something you can fall back on when it is needed. You can save what you make out of the investment and start building a strong portfolio for your future. As mentioned before, nothing can be predicted, and anything can happen. A strong portfolio is one that is diversified, meaning that returns are generated from several places instead of just one. This allows you to narrow your investment risks and make use of your profits if one investment supposedly fails.Working smart in terms of both earning and saving can save you and your family from a lot of trouble. It can even set an example for those around you, and you may be able to inspire others into adapting to a healthy, long-term mindset. In this way, you won’t only be helping yourself, but also indirectly guiding the others around you to be better, smarter people.Do you think one is better than the other? Or, do you believe that earning and saving are both essential aspects of getting through the maze of finances?
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