Many people are chasing the next hot stock. I speak with many years of experience when I say that if most people just had “lost” or “wasted” money from no spending plan and poor spending habits back in their pocket, they would be wealthy. Instead of learning to save first, which teaches you important emotional lessons about your values, priorities, spending habits, and financial issues from childhood, most people think the best way to plan for the future is to get into investing. Ask your parents, or your boss, or your associates, or your friends and you will see most people “invest” before they “save.” But the problem with this is that most people don’t have what it takes to get into investing because they haven’t even learned how to apply the fundamentals of savings first.
Savings means putting money where there is no risk. If you place this savings into a mutual fund, it is at risk of loss. And if you placed your savings into an IRA or 401(k), it is trapped with no liquidity, no use of this money and no control. Savings is just that, liquid and available. Savings is different than investing or speculating.
Savings is the foundation to any possible prosperity. If a person can not save money on a regular basis, they have no right to invest, in my experience.