Topic: The first rule of investing is saving - page 12. (Read 1810 times)

There are many rules for investing if you read some books to guide you with investing. You can list the money spend per month and you will understand how much money you can get if you stop buying unnecessary stuff. If you just save the money you spend on a cup of coffee per day you can see the effect in the next months, I suggest you read the book named 'Compound effect' by Darren Hardy you understand the compound effect and feel it in your life. Having enough knowledge is power so it's better to read the books and take a look at the strategy of successful people. Knowledge is the key.

No one's gonna lend you if you are famous for not paying back the loan .
you can borrow on the people that didn't recognise you but they will first ask for collateral to make sure that they can get something in case you ran away .
 Savings has its own use and I won't touch it but I can only invest if I have extra amount of cash that I haven't put yet on my savings  .

If you invest borrowed money, you invest money you don't afford to lose. And then you've already lost.
Crypto price is fluctuating a lot. And since your strategy contains only the parts where you profit, in the moments the price goes down you'll panic and probably sell at a loss.


So again: if you break the "don't invest money you don't afford to lose" rule, you'll lose. And if you invest borrowed money, you do break that rule.
But no worries, you don't have to go by what I'm saying, you're free to make your own mistakes.

don't really agree with you because there is still the possibility of a bank borrower making a profit if he/she invests his/her loan in the long term...

if have low interest rates and can pay in installments over several years then why not borrow money from a bank for crypto investments because not everyone has cash or large assets for them to buy into Bitcoin for example. even though it is risky and too wild, but if you are right in choosing the coins you want to invest, then you will definitely make big profits.

I may take a different opinion about what you talking about investment and savings. I believe they are mutually inexclusive to each other, that means one does not give rise to the other. Like it doesn't mean that if you save money, then you have automatically invested it because investment is different from saving. If you invest, you have expectation(s) of having or adding additional money, income or profit to it but in saving, you are not necessarily expecting income, profit automatically to it.

Investment is a process to make more profit but savings may be money kept away for future (IMO is not Investment).
Example here with the definition of investment



Yes the above on quote is investment because it is a process to accumulate more profit but by keeping money as savings is not Investment. Although, you can keep money in the bank but you still don't usually have interest on it.

This is the most important concept to build a portfolio. No matter if you want to invest in cryptos, stocks or real estate. First of all you  need to money to make money. Without a constant money inflow we can't keep investing, because investing should not be into risky projections that offer high returns. If we go for opportunities where we can make a few hundred % return than we also have a risk of losing all our money. Which comes to the second important concept in my opinion, Risk management. We need to protect what we already have to keep growing it.

I get your idea, and I also think the same. Instead of saving, which could mean that it will be just be how it was when you saved it, then investing it is much better because it can produce profit. And when profits are gained, then saving it would be good. Although it is true that saving is needed before a person could even make an investment.

Define saving.

Take one of the largest currencies out there, USD, if you "saved" USD over the last 20 years (using 20 years as an extreme example, it can be much shorter than that depending on monthly inflation rates), the same USD in 2001 would have been worth 50 percent more than it would have been worth now. So merely by saving, you lost over 50 percent of the value in your savings over 2 decades. Take this to a smaller scale - every day, you are technically loosing money by holding on to an inflating currency. Not advocating for everyone to throw away any income in currency they get obviously, but saving has its limitations.

You should also know this that when you are from a third-world country, pretty sure that your family is your responsibility too meaning that you will be needing to supplement their needs to because they think that you are their insurance. That's the sad reality in my country and your country, we are cultivated on a mindset that we should get a job and work ourselves while our jobs slowly kill us and take away our soul.

   Yeah it's true saving is the most important thing to invest cause the more you save the more value you will received at the end. I related this when I was young in our Small town I sell candies and cegarette  every day I save  1coin  when the time goes by I have enough money to invest and now I'm a investor.

Saving is the hardest part of our life, especially when we just only get enough for our necessities. I couldn't say that they don't have a better future but something they miss the best opportunity of their life.

Maybe we are so thankful that we have been given a chance to invest in crypto as not all have the capabilities to do this. If I would like to save, I certainly have to invest this rather than keeping on my wallet or deposited it in the bank. It doesn't matter if I don't have real money in my pocket but al least I have some investment that could save me and give me profit in the future.

Because for me, Invest now, save later.

And to save money, first you need a job.

To have a job, first you need skills.

To have skills, you need education.

You have education, you need time (and money).

To have time (and money), you need to be young (and have rich parents).

I have seen the same thing happen in my country too, where people are more relaxed in dealing with life, especially financially. they tend to prefer to be employees, and eventually retire, as if not thinking about financial freedom. in the end they do not think about investing for better welfare. On the other hand, it seems that many are satisfied with their way of life and have no long term thoughts

It is all about mindset, I am in a third-world country too and my salary is just enough to handle my responsibilities but I am still able to save some amount every end of the month even if it is really small. If your mindset is for the long term that you know that you can't just work forever, you will start to save for something to invest in the future. It's difficult to teach financial literacy in a third-world country because most often people here are not yet open-minded for other opportunities. They are still stuck with the tradition of you study, graduate, then work until your age of retirement.

     Makes absolute sense, some people don't even bother to save because of those motivational things they read or see either online or from peers. While these "motivational stuff" do not make things bad for a person, the way it is being understood or taken in is what makes it poisonous for that person. Investing without any back up plans, no savings etc., because of "no pain no gain" or "you first have to jump before you can fly(take the risk)" crap is just so wrong in so many levels. I don't know why some don't even understand this. Yes, some people have been successful with this but those people are just pure lucky or can take so much suffering without giving up. But let's face it, not everyone can be like such. Which results in a lot of people failing in life.

     I wish people would understand that keeping old knowledge is as important as absorbing new knowledge, even more so to be able to fuse old knowledge with the new ones in a way that suites one's needs. While Bruce Lee sums it up nicely: “Empty your cup so that it may be filled; become devoid to gain totality.” it does not mean that you have to get rid of all the old but to instead get rid of the useless ones so you can add new knowledge and be open for new point of views.

-Saving and investing go hand in hand. Nothing lasts forever so never let yourself be unprepared for anything.

I totally agree. Saving must be the first thing to do before investing in any investment vehicle. You must have enough money stored in case of emergency before diving and risking into any investment platforms. Emergency fund is a must before looking into diverisification of investment fund. Because if ever you'll prioritize your investment without back up savings, you'll end up having nothing when your investment fails. So it is really much better to have a savings first, then after fulfilling your savings fund, go and invest in your trusted platform.

Anyone must always be prepared of the inevitable and unexpected events. It is suggested to have a savings that's good for 6 months worth of your expenses to cover unfortunate events. One must have enough money to fund several weeks or months being jobless and having no any other source of income. Investment provides higher opportunity to earn compared to saving alone, but also remember that surviving is essential; if your investment go downhill, you will have no other option to sustain your needs unless you have a savings account.

This doesn't apply to other people in different countries though especially for people like me who is from a third-world country which was taught no concept about financial health, everything I knew about finances are all self-taught and discussed with my peers. I think saving is difficult for me because the money from work is just enough to survive alone but not with a family, investing is much more difficult because no one taught us to invest in my country.

Normally yes! But not in times where you hardly have to pay interest for borrowing money. Suppose you borrow money for less than 1% per year. The stock market has brought an average return of 7-8% in the last years (blue chips). After taxes and interest, that would be about 5% profit. Of course you have a certain risk, but you always have that when investing, even with equity.
But I would not invest borrowed money in crypto as the risk is much much higher.

And it's such a simple rule and yet, some people still can't understand it. Yes, investment is something that could really help you in the future, but it's not really something that you'd want if your current situation is stable enough. Yes, it's unfair, but that's how the world works. At the very least, you should prioritize stabilizing your own financial situation, instead of adding another burden to it. Investing is simply a burden if you're killing yourself while doing it.

It'd also make a life a lot easier if you only bought stuff with your savings, and not money obtained from debt. Debt is a sort of last straw thing that you would only get if you're really stuck in a hard place, starting out investments isn't one of them.

Borrowing for investing is usually a bad decision. One must invest only money he affords to lose. The only "good" way to borrow for investing is if you have plenty of wealth, but it's already locked (properties, companies) and borrowing will provide liquidity.

Also for normal people, I'd suggest to invest only part of the savings, not all. Some should stay for unexpected problems.

However, these are (small) details. The initial rule stands.