Why Saving Money Doesn’t Work Anymore — Follow the cash flow
You’ve heard the saying, “cash is king,” but what if I told you it’s not? In fact, cash is garbage — inflation eats it. $1,000 in 1960 had the purchasing power of over $9000 today.
This is why saving money is useless. Personally, I don’t save money; I only store it for a short period of time until I can invest it.
Saving cash is like saving a legal pad — it’s worthless because money, like any paper, is only good when it’s used. If you leave money in savings too long, it disappears.
The infamous cartel boss Pablo Escobar was one of the wealthiest drug lords in history, bringing in $420 million a week in revenue. He spent $2,500 a month on rubber bands just to hold the stacks of bills together, and he wrote off 10 percent of his cash as lost because rats would eat it or it would be damaged by water, or lost.
Saving your money in a bank isn’t much better. It takes 833 years to double your money at today’s bank rates. You can’t even get 1 percent in a savings account. Inflation eats far more than that! You’re literally losing money while saving it.
This is why you should only temporarily store your cash, and then you need to invest the storage.
“Money, like any paper, is only good when it’s used.”
The golden goose is only good as long as she lays eggs. If she doesn’t lay golden eggs you can kill her for the chicken, right?
Money needs to make babies, to multiply; otherwise, you might as well spend it as soon as possible.
Think about this: If you look at all the cities and all the villages on earth, they are mostly on transportation routes. The bigger the transportation route, the bigger the village. Ports are valuable because they have lots of lines — things move in and out quickly. This idea is further supported when you read up on books such as Parable of the pipeline and Rich Dad Poor Dad where they discuss on how people should think on creating pipelines of incomes, income generating assets such as royalties and not on saving money.
The same is true with money. Cash is not king; rather, cash flow is king.
Here’s what to do with your cash:
- Invest in yourself to increase your income
- Invest in your business to increase your income
- Invest in real assets that produce cash flow
Make sure to take your cash and buy things with it that will make you more cash! Invest your savings. Cash is dead. Cash flow is king.
