Etini
Valued Contributor
Being wealthy is a state of having abundant financial supplies alongside the resources to replenish and multiply it. Savings is the act of keeping aside a part of your income to be used in the future. I see so many people being so meticulous with savings. To some, savings is a pathway to being wealthy but I am going to burst your bubble by telling you that you can practice savings alone for the next two decades and you won't be wealthy. Harsh right? I would tell you my reason for saying that.
The first thing is that savings is subject to inflation. Inflation is a process whereby the value of money reduces with time. This is caused by increase in general price level. Prices of goods and services would always increase. The best the government can do is to keep the increase within range. So a $1000 in 2020 does not have the same value in $2023. If you could buy a particular shoe with that amount in 2020, you would surely need to cough out more than that amount in 2023 to buy the same shoe. That's to say the value of that money has reduced and it can't buy the same time within a specified time frame.
With inflation to factor, savings cannot make you wealthy. There are other factors that work on combination with savings to guarantee wealth.
The first thing is that savings is subject to inflation. Inflation is a process whereby the value of money reduces with time. This is caused by increase in general price level. Prices of goods and services would always increase. The best the government can do is to keep the increase within range. So a $1000 in 2020 does not have the same value in $2023. If you could buy a particular shoe with that amount in 2020, you would surely need to cough out more than that amount in 2023 to buy the same shoe. That's to say the value of that money has reduced and it can't buy the same time within a specified time frame.
With inflation to factor, savings cannot make you wealthy. There are other factors that work on combination with savings to guarantee wealth.
