Here Are the Main Reasons for Rich People Not to Save

Not a few of our people think that saving is important for a good future. There are also those who think that saving is an important step to prepare for our retirement. However, is saving enough?

In fact, saving activities don't make much progress for our finances. Saving is not enough to prepare a safe retirement in the future.

For example, when you want to buy a house for 1 M. To get the house, you save up to 1M of money collected for 7 years. But what happened 7 years later? The house you want to buy for 1M now the price has risen to 2-3 times. Do you want to continue saving again until you buy a house whose price has skyrocketed?

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However, why buying a house seems to be an easy thing for the rich? What strategies do they use to overcome their financial problems in the future and at the same time a solution for their retirement?

The answer is simple: not by saving.

Reasons for Rich People Not to Save

Compared to saving money, rich people choose to invest their money to increase the value of the money. You could say, their actions are like doubling money or having additional income from the investment.

However, why did they choose not to save? The following are some of the reasons:

Avoiding Twice Taxes

When working a full month, of course payday is the thing you've been waiting for at the end of the month. Before the salary falls to you, the salary will usually be deducted by income tax that is directly made by the company.

When you set aside your salary money to save to the bank, please note that there is another tax in the bank that can erode your money. Indeed, on the other hand, you also get a savings interest that ranges from only 1-2% per year before tax. But this value is certainly not significant.

In addition there are also other hidden taxes that need to be known, namely inflation. 

Inflation

Inflation is a hidden tax that can claim the value of our money. The money that you have deposited to the bank so far can be reduced in value due to inflation. Moreover, every year the interest paid by the bank has been carried away by taxes and inflation.

Every year, the average inflation rate is 4% per year. While the cost of education increases can reach 17% per year. If you only rely on savings, you will not be able to catch up with the inflation rate, which is faster than the savings interest.

Avoiding risk

Many choose to save because there is a sense of security with the money they have. This old mindset is what makes many people spend energy to save. While investment is still considered as something scary.

There is a concern that their hard-earned money will just disappear because they have to invest. There are also those who know more about Investasim but do not care that investment can make money many times more than they have.

When we only identify investment with risk, this means we avoid trying and just stop learning. Investment is not a scary thing, it's just that it really needs to be studied further to find out the benefits and risks.

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The Importance of Knowledge in Investment

When going to run an investment, the most important thing is that we have sufficient stock as the initial capital of the investment trip. All depends on ourselves, do you want to continue playing "safe" or try new things with results that are sweet fruit?

Many rich people don't save and choose investments because they realize that investment is the most ideal way to organize their finances in the future. There is no instant, you will go through the "error-trial" phase first. Once you enjoy the results, you will realize that investing is the most fun way to manage money.

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