Today we’ll talk about the second step to wealth, the “S” in “ESI Money.” As noted in the explanation of the site’s meaning, the “S” stands for “Save.”
Saving is the second part of the key financial guideline “spend less than you earn” (the first is to earn as much as possible) and is just as important as its brother.
Two Parts of “S”
As it relates to its use in this site, “save” actually has two important meanings. They are:
- Spending your money wisely, paying less than you need to for the things you want. In other words, “save money” when you buy things. This usually requires both knowledge (of prices, promotions, money saving tactics, etc.) and intentionally (not just spending haphazardly, but planning spending.)
- Putting money aside (i.e. “saving” it) for future needs or, more related to this site, to invest for future growth and income.
At ESI Money we’ll discuss both sides of saving and how you can supercharge your “S” on your road to becoming wealthy.
Spending Wisely and Saving to Invest
By knowing prices, how to use promotions, the best money saving tactics and the like, you can spend less than others do for the same goods in services. In many cases, these savings are quite substantial. And even the ones that aren’t can add up to significant dollars over time. Put all these together and they contribute significantly to the growth of your net worth.
Part of saving is also just choosing to spend less than you earn. If you make $40,000 a year and control spending to $30,000 a year, you can put away (“save”) $10,000 that can then be invested to drive your net worth. This requires self-control and financial discipline, but if you can do it, you will grow your cash flow and rocket your net worth to new heights.
Don’t Overlook the “S”
As the second part of ESI Money, saving is a vital step in becoming wealthy. Do not overlook, dismiss, or downplay it. You can make $1 million a year, but if you spend more than $1 million, you will be decreasing your net worth. Thus is the power of focusing on saving. It’s not a simple sideshow on the way to wealth, it’s the necessary step #2 that opens you up to great wealth.