Is it better to save more money or make more money? check out this video by Aaron Clarey where he explains it here.
I watched this video and I think it’s important to share with you guys. It’s a very good point.
It’s better to save more money out of the money you are already earning then to try to make more money by working harder, trying to get a good return on an investment or some other way.
Often when people earn more money their expenses go up, and once their expenses go up they will need to continue to earn the big money to pay for everything like their big house, expensive cars, debt and other cost.
If they lost their high income they would need to replace it with another high income.
Often the jobs that pay more money are more stressful because of the responsibility, or you will need to work more hours to earn the money.
But if you have low expenses you won’t need to earn a lot of money. You could be happy with the more tolerable job that has a better work life balance. Of course if you can make more money while having a good work life balance and it’s a good job, go for it!
Now, is it better to try to make more money from an investment or save money? Well most people have debt. This debt would be a home loan, car loan and credit card debt which could be costing you 5, 10, 20% per annum!
Would you rather simply save your existing money and pay down your debts which will give you a guaranteed return or try to make more than that on the stock market or something?
When you invest in stocks, or property or a business or whatever! there is ALWAYS a risk.
There is no risk when you pay down your debts because you are the risk. You are in debt to the financial institution so you are the risk to them.
Another thing is tax. When you earn more you pay more tax because of the progressive tax system.
So do you really want to earn more so you can raise your expenses and try to maintain that? Or would you rather just save more out of what you earn now?
The financial advice in this article is general only.