Are You a Saver or an Investor?

Last night, I read an article on US News and World Report (you can see the article here) about how the majority of "investment experts" are now recommending members of Generations X and Y (I'm at the tail end of X, my wife is at the beginning of Y) to set a retirement savings goal of at least $2 million.  I could write a post every day for at least a month about where I disagree with this article.  However, the one thing that I focused on is that the investment advisors's recommendations are to "save money in your retirement account and build a nest egg."  I did a word count and throughout the article, the word "save" shows up 11 times.  They talked about saving a lot.  I also did a word count on "invest".  Guess how many times the word "invest" showed up?  None.  The only time the term investment came up in the article was in reference to the people advising us to save.  On the surface, this makes sense.  Most people do believe that saving for retirement is investing.  I went to the dictionary to compare saving versus investing.



Save (v): Keep safe or rescue (someone or something) from harm or danger.
Invest (v): To commit (money or capital) in order to gain a financial return.


It looks to me like saving and investing are not the same thing at all.  Instead, I believe it's a decision (choice) between the two.  Some people save for retirement and hope their nest egg will last them when they retire at 65 (or later, as the article suggests).  Others invest their money, build passive cash flow, and have a much higher chance of success.  I've known both savers and investors and one thing I can say about them is investors seem to enjoy investing a lot more than savers do saving.  Even though investors do lose sometimes, it's just part of the game.


Now I'm not saying don't ever save money.  It's important to have an emergency fund set aside as a buffer (about 3 months of income is my buffer).  But for my overall retirement plan, I am choosing to be an investor and I plan on retiring way before the age of 65.  I believe the key reason I will achieve this is because I first chose at the age of 25 to become an investor instead of a saver.

First Steps

Tonight, I took my first real step towards escaping the Rat Race.  I did market research and technical analysis over the past couple of nights with the stock market and placed 2 orders tonight that should get filled Monday morning when the market opens.  Even with all the education, knowledge, and skill that I know I've put into my decisions (and I could easily have done more than 2, I'm just starting small for now), it's still pretty nerve racking taking that first step.  I was talking with someone yesterday who told me that the stock market is gambling.  If so, it's designed that the people with financial education basically flip the odds and are playing as the house rather than the gambler, and I hope to someday feel that confident in my own skills.  Only through winning, losing, and learning as I go will I continue to develop.  One of my coaches in my financial education explained to me that it's the learning from the successes (and even more importantly, from the failures) that separates the rich from the poor.

What Would You Give Up For A Little Extra Cash?

So there's been quite a bit of change going on in my life and my family's life.  My wife just got a job (temporary contract with a Federal Contractor, but can be extended) that will take her away almost every day of the week for the near future and leaves me alone with the kids from the time I get off work until I put them to bed.  I know it's going to be a struggle, but we have our financial goals as a couple and a family, and the extra income will definitely help us towards achieving them.  For us, it's worth the short-term sacrifice if it helps us get to the point where we don't have to worry about which bills to pay or how to make a little extra money here or there.


Which brings me to an article I read on Yahoo about what people were doing to make extra money and why they were doing it.  There were people doing mystery shopping for gas money and typing up foreclosure lists to avoid being put on it, but the one that stuck out in my mind the most was a guy named John from California, who has a full time job and then also teaches 3 night classes per week.  He enjoys teaching, but says it's hard on him and his family because sometimes he doesn't get home till 11pm.  His quote that stuck out in my mind is "Still, when you have a family to provide for, you have to make sacrifices and you damn well better do it." 


If I had the opportunity to meet this man in person, I would want to ask him what his plans were to increase his financial wealth so that in a couple of years, he doesn't have to teach at night anymore.  Or perhaps he can retire from his day job and only teach at night, and be able to see his family a lot more.


Everything I have in life I attribute to my family.  My parents raised me, my grandparents spoiled me, my sister kept me humble, my kids keep me going, my wife is my rock, and my parents continue to counsel and teach me to this day.  Within reason, there isn't anything I wouldn't sacrifice to spend more time with my family.  That's why I am taking risks and starting to build passive income streams.  That's why I currently have 6 financial books checked out of my local library and have a goal to read all of them by the end of September.  I'm building up my financial IQ and my passive income so that when the time is right, I can finally look to my family who has supported me all the while and we can celebrate the success of my early retirement together.


Good luck to everyone and god bless!