Investing In Tomorrow Through The Investments Today

Saving your money is one of the main things we try to teach you here at Finance Free Life. It is also one of the things that other money gurus teach you through their courses. In conjunction with paying off debt, saving money is the primary means of getting a stable financial foundation. However, there is more to building a financial foundation, much like there is more to building a house than a foundation. Eventually you have to build the house!

Understanding Wealth

Wealth is the house you want to build. Saving money and paying off debt is a part of preparing the foundation for your finances. However, one of the end goals is to have a house you are wanting to live in. The same is true with where you want your finances to go or what you want them to look like as you grow. This is what we start to see as wealth. As you are able to have extra money, you need to start growing your money. This is done through different means such as investing in funds, buying real estate, investing in yourself, or just plain investing in something that will provide a decent return. As you begin to see these returns, your wealth also begins to grow.

The Trap

Investing takes time and also takes some smarts. When investing, it is typically best to work with an expert such as a financial advisor or planner. If you do have extra “fun” money to blow, you can certainly invest in random things with high risk such as your uncle’s food truck company. It may not pan out, but if it does it could be a big return. The trap comes though when you don’t know when to stop or you don’t know where to even begin. It is easy to jump to extremes when dealing with your own money, so it is always best to do your homework on everything. Ultimately, if you do lose your investment your gonna want to know you did everything in your power to understand what it is you were getting into.

The End Goal

Ultimately you want to find something or many things which provide you a better than average return on investment. The more of a return you make, the more you can reinvest. Thus compounding the effect. It doesn’t hurt to take it slow and only try a few bucks here and there to test the waters. It may take time, but you will be able to begin to understand what works and what doesn’t. The things that work are the obvious things you want to continue. Do not be scared to take some risks, and understand there is reward in risks as well. Regardless of how you go about doing it, simply do it.

A Parable

I will leave you with this parable from the Bible. This is found in Matthew 25:13-20. The is a story of a master who entrusts three slaves with coins. One he gives one coin, another he gives two coins, and the third he gives five coins. He is gone for awhile before he comes back to his slaves to see what they have done with what they have been given. The one with five had doubled the master’s money, and so did the one with two coins. The master was very pleased with them as they had not wasted what they were given. The one with only one coin though hid it in the ground. He “saved” it for his master’s return. Well, the master was furious as this slave had been lazy and done nothing. The two slaves who had shown they could deal with a few things, were given much more. Thus, do not simply “save” what you have been given. It does you no good! Make it work for you!