3 Steps to Saving More So You Can Invest It
By: Werner Minshall
Tags: Business, Investing, Saving Money, Investors, Savings Tips

Earn, Save & Invest

3 Steps to Becoming a Better Saver

Growing your wealth starts with earning money, saving that money, and investing your saved money. When you save money and stack your cash, it provides opportunities to purchase investments at low prices. I am not referring to any investment; I am advocating for investments that have high-profit margins and pay you to own them, such as a publicly traded company that delivers a dividend. A passive investor in real estate would receive a quarterly disbursement. What are the three steps to Saving More Money?

1: What are your expenses?

Essential Expenses:

What are your essential expenses? You require food and water to live. Are you drinking high-quality water and eating organically & locally sourced food. These are essential for optimal performance. When you feed your body high-quality energy your ability to analyze a business will skyrocket. Why? There are multiple things to think about when evaluating a business, if you have a lethargic mind you will think slower and miss key information.

Next is your shelter. Are you living in a space that’s too large for you? Evaluate how much space you require to live. If you are working 80 hours a week then you basically require a bathroom, small kitchen, and place to lay your head. Each person has different requirements. Take time one day to analyze how you flow through your space. If you notice you are not using some spaces effectively then downsize. The goal is to maximize your space. If you have a large house and you are spending your weekends on maintenance those are wasted hours that could be used for investment research. Caveat: if you have an organic garden you are maintaining then that provides huge value. Only use the space you require.

Clothes are another area where we can all go overboard. Check something called a capsule wardrobe. A capsule wardrobe creates multiple different outfits from a few shirts, pants, shoes, etc… Think smaller and more efficient. If you are spending your money on clothes you don’t use that’s wasted money. You could have saved that money for a later investment. Only buy what you require.

Here is a big one, your mobility. Can you use a bike instead of a car? Can you walk instead of taking a car? Look at all the different options you have such as walking, biking, driving, flying, etc… and pick which works most effectively for the route. Maybe swap out your BMW for a small Jeep. A Jeep is short and can handle multiple different situations. Maybe sell your road bike for a general everyday use bike. Think about how you can operate more efficiently. When you create more efficiencies you create more dollars you can use for later investments. Think of each dollar as an asset that produces 10% or .10. If you were considering buying a $1000 item you are potentially missing out on $100 in future investment income. If you start training your mind to think this way you will start saving more money.

Fun & Relaxing Expenses

Also determine a monthly budget for meals, fun adventures, some equipment purchases that support your hobby, trips, and anything else you do for fun and leisure. It’s beneficial to have a fun budget so it’s not business all the time. That Will get monotonous and boring and lead to burnout. Allow yourself to enjoy the fruits of your labors. It will give your mind a chance to relax and enjoy some memorable experiences. This is essential to reset your mind as you go forward on your investment journey.

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Emergency Expenses

Finally, emergencies come along in life, and having a budget for those emergencies will reduce your stress. An emergency fund creates peace of mind because you have the potential emergencies covered. As an investor you want to avoid situations that shock you. Your #1 asset is your mind and your ability to think clearly. Anything you can do to streamline and safeguard your life will support you as an investor. The more effectively you plan the more proficient you will be at working through challenging emergencies.

2: Track your expenses. It’s all about tracking and evaluating.

Once you have set your budget now it’s is time to track it. When you are unaware of you your budget you will blow through your budget. Anytime you blow through your budget you have fewer dollars to save and invest. When view your budget as vehicle that supports you as an investor, it will compel you to track it. Tracking is challenging and time-consuming. It will confront you. You may say “I don’t have time for this,” “I don’t want to track it.” Take a second to envision what it looks like when you reach financial freedom. What does it look like? What does it feel like? Where are you in this vision? The more realistic and juicy you make your vision the more it will enroll you to execute on it. If you have already reached financial freedom envision what it would look like to take it to the next level.

Also, as you track your expenses you will determine if they were realistic. Maybe your food budget requires more money and your clothing budget requires less money. Tracking creates situational awareness and it allows you to refine and adjust your expenses as situations, environments change, pricing and other factors change. Consistently tracking will support you in seeing what’s working and what’s not working.

As you build your tracking muscle you will become more effective at evaluating a business. When you own a publicly traded business reading the quarterly and yearly reports is a form of tracking. When you own a private business conducting a meeting os a form of tracking. The main reason to track anything is to ensure its in integrity. Organizations are full of people and people have breakdowns, make mistakes and take other actions which are not in alignment with the plan of the business. Organizations experience adverse events, emergencies and other shocks that jolt them. Consistent tracking provides situational awareness on what’s occurring in any business. It gives you a heads up so you can correct, adjust and move forward.

3: Reduce, Refine and Give Away

We have a tendency as humans to want to hold onto items that bring no value. You have entered those houses or maybe you live in a house that’s so cluttered it’s exhausting. It feels confining, your mind feels foggy and it’s challenging to accomplish the simplest tasks. We all experience varying levels of clutter. Why does clutter reduce our performance? Because anything you purchase or acquirer occupies a space in your life whether it’s in your house, car, on your body or in any other physical space you own or use. Also, all your possessions, even your computer hard drive, require maintenance. When you spend the majority of your time maintaining your possessions it reduces your time evaluate new investments, to think, to relax, to reset, and other activites that enrich your life. Here is a simple rule, I follow. If you have not used an item within 1 year give it away or sell it. Look for items in your life that prevent you from performing. Refine your life to the items you require to operate efficiently.

When you live with less, you will think more clearly. Investing requires a clear mind. Also, it requires money to invest. When you spend less you save more money.

Final Thoughts

Investing requires diligence and persistence to earn money and save that money. Those individuals like Warren Buffet, who have $150B in Cash, will have opportunities when the sales arrive.

We Invite you to Visit the RedtoBlackPodcast Website Where We Support You in Creating Financial Freedom in Your Life.