The rich is measured by how much money they have saved, not how much money they earn or spend
TLDR: The rich on Forbes list are measured by what they have, not what they earn or what they spend. So to be rich, we need to save more, regardless of headwinds or not. When opportunities arises, without savings, we can't take advantage of it.
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If we look at the Forbes list of the richest person on Earth, they are always ranked by how much net worth they have amassed. Which means they are measuring how much assets they own. They do not measure the richest person by how much they earn or how much they spend.
If they are measured by earnings, then $Palantir(PLTR.US$ CEO, Alexander Karp, will be on the list as he was the highest paid CEO at $1.1 billion in 2020 ![]()
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Therefore, in order for us to be rich, saving is key. If you can earn a million a day, but you can't save a single cent, your net worth will still be 0. Therefore, we should be saving regardless of headwinds or not.
With savings, we can take advantage of opportunities that comes our way. Be it to invest in stock market when it is cheap, or to start a business when a need arise. For example, during the covid period, my friend started an ecommerce businesses that focuses on ergonomic chairs and table that tapped on the work from home opportunities. Without savings, it would be hard to purchase inventories, hire staff and lease a warehouse unit.
Even in good times, there are always opportunities. With savings, we can take advantage of them, without using leverage or loan. Some opportunities that arise would be the $Twitter (Delisted)(TWTR.US$ v $Tesla(TSLA.US$'s Elon Musk case, where we could bet on Twitter winning the case or not. For people who like to take more risk, they can even use a small amount of savings on the revival of the meme stock squeeze play on $Bed Bath & Beyond Inc(BBBY.US$, $AMC Entertainment(AMC.US$ and $GameStop(GME.US$.
However, we can't take advantage of opportunities when we don't have any savings. So spend less, save more. So that when great opportunities comes, you can always grab it ![]()
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crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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TeslaSmurf : I’m a party and adventure guy
and I tend to measure wealth on my lifestyle, on how can I finance the material and non-material things I love to experience. (the most important of which is the freedom to do what I want whenever I want, at any time I decide to do it, according to my personal priorities). So, accumulating is not my parameter. Investing with a purpose it is. Saving may be important at the beginning, but after a certain “base level”, it’s much more important to produce money than to save it.
Juliogumz : I'm agree with the saving part cause you need a base to take opportunities in the market. How are you going to invest in good opportunities if you don't have cash or savings? the market crash is gold cause you buying low the stocks that are already overvalued so you don't lose anything cause the banks "hedge funds" who manipulated the market and the federals who increase rates will fight back to keep the price of the market even the CEO will buy back the stocks to keep the price high so those times are good for you to invest so you need that cash on hand or saving to invest and take opportunities. When the market is stable you just gambling your money with the big sharks and whales who play with the market at they desire.
doctorpot1OP TeslaSmurf: Investing to me is part of saving, because there is 2 ways to get investment, 1 via saving or 2 via debt. So with more savings, we can then create savings-based income (investment) to help us generate more income. With the ultimate goal being we want to have a large savings-based income and less time-skill-based income.
doctorpot1OP Juliogumz: Some other way people do it is via debt, but to get those debt the banks will also evaluate if you have enough savings (cash, assets, etc) and income before loaning.
hope you manage to snatch a few great deals too
Yea the covid crash was golden and managed to get a lot of good stock at a great deal
TeslaSmurf doctorpot1OP: Just different perspectives: I never needed to save because I was earning very good money when I was young… and never cared to invest much either (that’s not good, but it’s in the past). Of course I saved some money along the years and that’s what allowed me to start trading and I recognise it requires a different mindset and approach: that’s what I’ve been working on in the past three years, but it came at the right time, as I wouldn’t have done it before. The pandemic and the huge success of Tesla were the key.
doctorpot1OP TeslaSmurf: that's great to be earning big bucks from young
but you not planning for the days when the earning stops, say like recession or retirement?