In this blog, I will focus more on how to save and invest our money that we have. About how to make money, I will explain in my other blog.
Before we discuss about how we can save money, I think it is better if we know the reason why we do that. The question here is, "How the rich people have so much money?". We often ask the question to ourselves and friends. We only talk about how they make the money but seldomly discuss about the methods that they use to save money. Actually it is crucial to plan about how we can save our money because no matter how much money we can generate, if we do not control the spending, we still cannot have the money stay and grow.
I did always talk this scenario with my friends:
There are 2 persons, X and Y. X has income of 2500$ and Y only have 1500$. X like to spend money and spends about 1900$ per month to support his luxurious life styles while Y hate to waste money and only spends about 700$. If we look at the saving that they made, X saves 600$ per month while Y saves 800$. From this situation, we can see that even though Y have less income, he can SAVE more because of his ATTITUDE and also he plan his money well.
The formula is very simple:
Income - Spending = Save
There are two aprroaches to save more money and which are to increase income and the decrease spending. The easiest approach should be about "DECREASE SPENDING" and that is what we are gonna discuss here.
See you in the next post..