When you set up your budget, you find ways and areas to reduce your expenses. You get your spending under control, you live below your means, you find ways to increase your income, you get your debt snowball rolling, you learn to pay yourself first to save for your emergency fund and of course…..you also need to save to invest! That’s where the “magic” happens.

The point of paying yourself first in order to save is not just to hoard your money or stuff it under a mattress, but rather to use that money as a tool and put it to work for your long term future goals. It’s actually a multi-pronged approach. Each of your different savings funds is separate from one another. Your emergency funds are separate from your investing funds and any other funds you put money aside for, but they all start from paying yourself first.

“Investing puts money to work. The only reason to save money is to invest it.” – Grant Cardone

Your emergency funds serve you in your short to mid term future when faced with unexpected expenses, so having those funds in low yielding, liquid accounts is fine since the real return on those investments is peace of mind. Once you’ve saved money beyond your emergency funds…..that money needs to be used for investing! Investing your money is when wealth creation starts to take place.

Financial independence is when your source of income doesn’t come from a days work for a days pay. Saving money to invest is the first step to putting your money to work for you, which is the essence of building wealth. You can only achieve true financial independence through investing, so don’t just save, save to invest!

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