Are you ready to shift your focus from Earnings to Savings?

Read time 3 minutes

Hi, it’s Rohit!

I wanted to share an anecdote from the book “Psychology of Money” by Morgan Housel.

In the book he says there once lived a janitor named Ronald Reed in the USA . Despite his modest income, he left a lasting legacy of financial wisdom. When he passed away in 2014, Ronald had amassed a remarkable 8 million dollars in savings.

His secret? A disciplined commitment to keeping his lifestyle in check and consistently saving money. Ronald Reed teaches us that regardless of our profession or income level, our approach to saving matters most. 

Contrastingly, the story of Richard Fuscone, a Harvard graduate and top executive at Merrill Lynch, unfolds a cautionary tale.

Despite a substantial income, Richard's failure to prioritize savings led him down a different path. Reliant on loans to support his lifestyle, he faced financial ruin and declared bankruptcy in 2008.

Richard's story serves as a poignant reminder that earning a high income doesn't guarantee financial security—it's the savings that count.

After reading both the incidents we can definitely conclude that “Your behavior with money is more important than how intelligent you are”.

Isn’t it?

The Key Takeaways

1. Cultivate a Saving Mindset

No matter the size of your paycheck, adopting a mindset that prioritizes savings is crucial. Ronald Reed's story highlights the impact of consistent, disciplined saving over time.

2. Live Below Your Means

Richard Fuscone's experience underscores the importance of living within, or even below, your means. A lavish lifestyle doesn't equate to financial security if it outpaces your ability to save and invest.

3. Emergency Funds and Future Planning

Building an emergency fund and planning for the future are vital components of financial well-being. These safeguards provide a buffer against unexpected expenses and lay the groundwork for a secure future.

In the newsletter from two Fridays ago, I highlighted the significance of having an Emergency Fund. (Link)

Set savings goals, explore budgeting tools and optimize your financial strategy. Remember, it's not just about making money, it's about making your money work for you.

As we navigate our financial journeys, let's remember that the key to financial freedom lies not solely in our earnings but in the intentional choices we make to save and invest. Whether you're just starting your career or well into retirement, the principle remains the same.

It's not about how much you earn, it's about how much you save.

Wishing you financial wellness and success.

Until next week!

Rohit Makker

“Set Goals That Inspire”

P.S. Have questions or topics you'd like me to cover? Feel free to reach out!