What are we saving for?
My parents always told me to save. My accountant tells me to set money aside in my RRSP. Saving seems like a reasonable thing to do, but why? Why do we save? More importantly what are we supposed to be saving for? After being able to take care of life’s necessities: shelter, heat, food and 3 months of living expenses set aside, what else is there? My TV tells me I should be saving to get a new car, a bigger TV (I gave in to this one), a bigger house, a nice vacation, etc. What a fucking scam. You work your ass off for 60 hours / week and then you buy a nice big house or a downtown condo and now you have to work 80 hours / week to maintain the same lifestyle. So by saving and then upgrading, you’ve essentially locked yourself into a job you already hated. Btw, if anyone thinks their house is an appreciating asset just ask your US friends, especially those in Florida or California.
Convinced that savings suck, but not sure yet about what to do with the extra cash? Do what I do: Save just enough for your next business “risk”. That could be investing in a bottomless stock market, buying a cash flow positive income property with lots of room for equity growth or starting a business. Your friends might think these ventures are risky. Your friends must be employed. Investing in yourself or what you’ve researched is a lot safer than being employed by a corporation that can fire you at any time, for any reason. What if you fail? Each failure contains valuable clues to achieve success the next time. Save some money and try again. Feel shitty about failing? Remember that your lost investment would have just eroded in your bank anyways.
It’s a bit counter-intuitive because of how society has defined “risk”, but really one of the riskiest things you can do with your money is to take no investment risk at all. Yet somehow, I think our asian parents would disagree.
March 10th, 2009 at 6:55 pm
saving so that you can leverage it to take even more risk seems to make sense to me. the bigger the risk the bigger the gain or at least potential gain.
it sounds like a bad idea, but…..
where would we be without bad ideas?
March 11th, 2009 at 2:56 pm
Your post is vaguely reminiscent of some of Weber’s ideas in “The Protestant Ethic and the Spirit of Capitalism”. Using wealth as a means to invest or to engage in entrepreneurial activities, thus benefiting individuals and society as a whole makes more sense than accumulating wealth for its own sake or simply as a means to consume material goods. Unfortunately, contemporary social values tend to encourage the latter and not the former.
March 11th, 2009 at 4:12 pm
lauratomblog.com anyone?
I think someone needs to do an entry about “What the fuck is safe anyways.” It would tie in nicely with Kev’s Bad Idea entry and my “What are we saving for.” Laura? Keith?
March 13th, 2009 at 4:44 pm
i just checked on instantdomainsearch.com and lauratom.com is taken. boo!
you should have acted faster laura to protect the integrity of your brand
laurahassomethingtosay.com is free though
If you get it laura, you can host it for free on my server,
March 16th, 2009 at 9:55 am
In reply to what are we saving for?
My comments are as follows:
Life is short.
Do what you feel comfortable with regardless of what your friends, parents. society say to do. That does not mean you don’t take into consideration their views but if you still disagree, go with what works for you.
After you made your decision on how you want to live your life, don’t go back later and have regrets. You cannot change the past. Move forward
and learn from your experience or “mistakes”, whatever you want to call it.
Be aware of the consequences of your decisions and if you are prepared to live with it, than go for it.
It is hard to be “happy” if one is in a state of conflict to do what society, parents want you to do and what you want to do.
Life is too short.
To Kevin’s comment, “the bigger the risk, the bigger the gain”, you may also say the bigger the risk, the bigger the potential loss.
This does not mean I don’t recommend taking the bigger risk. Its all up to the individual as long as they are prepared for the consequences. Everyone should go with what they are comfortable with and that means knowing thyself and knowing the consequences of their decisions and still wanting to make that decision.
March 16th, 2009 at 4:53 pm
Hi June,
Good to hear from you. Your comment sounds like good advice. Take conscious action and be responsible for the outcome. This is exactly why I have no sympathy for anyone in the US who is losing their home.
Kevin: Lauratom.com has been taken forever. I’m sure we’ll find something though. Maybe something like nirajandlaura.com (I’d do it the other way, but lauraandniraj doesn’t look or sound as nice).
March 17th, 2009 at 4:58 pm
Thanks for the offer Kev, I actually did check awhile back to see if lauratom.com was taken, just out of curiosity. It’s a clothing store in London…if I ever find myself there, I think it might be kind of amusing to go visit that store lol
March 27th, 2009 at 2:47 pm
The idea is to “save” for rainy days & not spend “too much” anytime.
As a kid, one can spend as much as the parents provide (otherwise kids will be the biggest spenders).
It is not about not taking risk. Life is full of risk (I should call it events that you don’t have control over). With money kept aside, you will have control of one aspect of it
If I am hit by a car, I cannot get my leg back. But with money, I can get myself operated etc.
Instead of saving & then spending to get big/better things and be in that cycle - it should be earn big & spend small. How can you earn big? work hard, take risks
People who are good with money have more flow of money coming in than they will spend. They might be earning in millions and spending in ten thousands.