Many people are aware of the benefits of saving money. However, very few people realize how this is destroying their earning potential. So let’s observe saving from a new perspective and see what strategy is the best for you.
Everybody talks about how saving is great, but there is a real danger you will fall into “chronic saving” mindset that will cost you real opportunities. And it will actually lose you money.
For example, if you have an opportunity to learn new skill, or improve your existing one through some paid education, you might be tempted to skip it.
The reason you might choose not to pay for it is because you’re in the saving mode. And you value your current money above everything else.
This comes at a cost.
The Cost Of Saving
Let’s say you are able to save $1000 per month. And you have an opportunity to learn something useful but it costs $1000. Will you take that chance?
Even if this education managed to improve the skills you use in your job. Maybe with those new skills you can get a raise and earn extra $1k per month. And now you’re able to save $2k pr month instead of $1k.
Over the course of a year that would result in $24k in savings instead of just $12. So you literally just doubled your savings by saving less.
But the chronic saving mindset would never allow you to “risk” the $1k and invest into yourself.
Investing In Yourself
Investing in yourself is a confidence game. You cannot rely on hope or chance. Everything is up to you.
A confident person will say: great, there are no weak links in this strategy, I will do everything that is required, this will work 100% sure.
But we live in a world where the most scarce resource is confidence.
So the person who lacks confidence will say: oh no, everything is up to me, am I good enough, what if this fails, everyone will think I’m stupid, everyone will laugh at me.
So they just invest wherever the rest of the “herd” invests. If their friends are all into stocks, they are into stocks. If their friends are into crypto, they are into crypto.
And if everything fails, well at least they failed together, and no one can laugh at them.
This is the mindset.
And if you want to do anything in life, and you want to produce bigger results than the person who lacks the confidence, you need to remove that mindset immediately.
Financial Confidence Test
Many people will talk tough and loud and present themselves as confident, but it’s all an act. Because the real test is what they do with their money.
This is the moment when they reveal to themselves, when no one is watching, if they believe in themselves or not. And every successful person has this one trait that is absolutely required: self-belief.
So what do you do with your money when no one is watching?
Are you delegating it to someone else?
- your retirement
- your broker
- some stock you believe will perform instead of you
Are you relying on anyone and anything that is outside of yourself?
I hope not. Because no one is going to take care of your money as well as you will. No one will care as much about your success as you will.
So it’s probably good idea to take the reins in your hands and control your life and your finances.
How To Start?
Start small. Even if you decided to go all-in immediately, it is smarter to slowly build up your confidence gradually. Then eventually you can take bigger and bigger steps as you go.
For example, you can always try to run a small side hustle form your phone that won’t cost you much. You can get a domain name (URL) for $10 and web hosting for $40 (price for a full year).
And in that time you can definitely build something that will bring additional income. Probably the best $50 you’ve ever spent.
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Senior Software Developer with experience in Machine Learning, Artificial Intelligence and search engine algorithms.