saving vs investing - minimalism vs frugality

[franky1]

saving is not a long term thing. not a wealth creation thing.
saving is a temporary play to only save a small amount to literally SAVE people from incidents of rainy day, emergencies where they need quick access to money.

Not all money one puts aside is earmarked for emergencies, just saying.  A person might save for a car, a house, a new dildo, whatever.

to literally SAVE you from having to resort to selling investments at a loss or using debt in an emergency.

The word "saving" has at least two meanings, and why you're equating the meaning equivalent to "saving someone from drowning" is beyond me.  If I put money aside to buy something I can't afford right away and don't want to finance, that isn't saving me from anything except acting with financial stupidity, e.g., paying for that something with a high-interest credit card.

By the way I just wanted to mention that now is a pretty good time to save money if you trust banks/brokerages, because you can find money market funds and CDs that are paying interest rates that beat inflation.  I agree that that's not wealth creation, but at the moment the stock market is sky-high and there's no telling what other investments like bitcoin are going to do.  It's kind of nice to have money on the sidelines earning 5%+, just waiting for good buying opportunities.

if you are using money market/stocks accounts and CD's you are not "saving" you are "investing"

savings are suppose to be the easy access funds where you cant lose money by withdrawing immediately..
investing however has the risk of panic selling at a loss..

so if you need to have money to rescue you from unexpected incidents. save it..
then with other income you get you can invest that knowing you dont need to quick dip into investments. because the savings will save you

if you are wanting to put money aside for later PLANNED events/items later on..  where you are not looking to spend it on emergencies but want to accumulate some increases whilst not spending it. then yes invest it on some short-mid term investment plans, where some accounts lock funds up for 3-6-12months offering X% fixed high yield interest. but these are treated as investments(wealth creation) not savings(rescue funds)

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[AnonBitCoiner]

Correct, I also adopt this lifestyle.

The biggest mistake that most people suffer in financial management is they only focus about invest in asset. Investment is actually the last step to protect our wealth, the first step is study hard and the second is get high paid jobs or have a business. if you didn't earn enough, you won't able to save money or even invest it.

Minimalism lifestyle is mostly underestimated by a lot people, they need to have a strong mental to receive mocks.

Financial management is necessary but getting job is not in the hand of an individual because now everyone is in Struggle to find a job but no one can find their desire job due to limited seats. First thing is that if a person has a job then he should manage his salary according to his uses and also think about saving and investment.

Some people have no planning of using money but they rushes towards investment as a result of which their investment remains incomplete and they take out their invested amount for emergency due to lack of financial management. If someone is not able to earn enough money then suitable option is to do part time job as it will gives you extra money for saving and expenses.

[franky1]

too many people.. even in this topic.. keep thinking the only two options is move from extreme spender, no money to save.. to extreme investor put all spare money into investing, have nothing to save

1. by this what i mean is the same person saying all his income goes to spending and nothing left..
2. then says not to save for incidentals but then go to extreme investing to grow money

the issue is by investing every spare penny, you then fear/panic/avoid taking funds out of investments because:
a. investments might be in a bear trap causing losses if sold
b. fear of missing out the next bull
c. imagining the next, next bull in 4-8 years

and so they have no rescue pot in either 1 or 2 nor between the transition from 1 to 2. meaning when surprises happen. they are in trouble. with no spare money in either context

the point of saving is not wealth creation. nor is it to use for luxury spending in a couple months. its to isolate a small pot of money in easy access form. to rescue you so that you are not panicking

its to save you from having to sell investments in bear times. its to save you from using credit in overspending times.
once you have the rescue pot of easy access cash.. THEN put later income spare cash into investments. knowing you dont need to mess with investments when incidents happen

i know people keep thinking they should lock up their rescue pot into investments too. but that is stupid as people then panic by having it locked up and can los more value than inflation, if made to sell at a loss during a bear correction

[tiCeR]

...

if you are using money market/stocks accounts and CD's you are not "saving" you are "investing"

savings are suppose to be the easy access funds where you cant lose money by withdrawing immediately..
investing however has the risk of panic selling at a loss..

so if you need to have money to rescue you from unexpected incidents. save it..
then with other income you get you can invest that knowing you dont need to quick dip into investments. because the savings will save you

if you are wanting to put money aside for later PLANNED events/items later on..  where you are not looking to spend it on emergencies but want to accumulate some increases whilst not spending it. then yes invest it on some short-mid term investment plans, where some accounts lock funds up for 3-6-12months offering X% fixed high yield interest. but these are treated as investments(wealth creation) not savings(rescue funds)

But I know several people who pile up cash they can withdraw immediately with no time delay just for the purpose of hunting down unexpected investment opportunities and I know it did work out for them quite frequently since they know the markets very well that they are operating in. Having cash available right now for assets of an asset class that somebody knows very well with respect to unexpected short-term opportunities can be a good strategy. Not locking up the funds for 2% interest can pay even if somebody foregoes the potential interest for quite some time if an opportunity then arises that saved the buyer 20% of the market price because of sudden fire sales from somebody who is about to go broke.

There are plenty of examples that I know about when people told me they kept plenty of cash in the bank in order to be ready once this or that opportunity pops up out of nowhere. There are certainly financial set ups that could be arranged with banks in other ways, but there are people who operate with cash in the bank they can withdraw any moment. Savings for potential investments in unpredictable opportunities so to say.

[Dr.Osh]

personally, I would prioritize both. We know that the benefits of saving are many, in fact it will be very useful in unexpected times, such as needs that we suddenly have to fulfill, and other problems. Besides that, saving has very good benefits for the future. Many people have proven it.
Unfortunately, saving alone is not enough. We have to put aside a few percent of the income we have to invest. This will make us continue to improve our financial situation. In fact, with investment the goal of financial freedom can be fulfilled. However, I think investing without saving is lame. I often find this in people who suddenly need emergency funds, where they are forced to sell their assets because they don't have the savings to meet these emergency needs.