Can saving money make you rich?

A very common questions people often ask is, Can saving money make me rich?

Now let’s be honest, Saving money has little to do with getting rich

The act of saving money by itself won’t make you rich. Cutting down on your expenses to save a few hundreds of naira is great, but that in itself won’t get you to that point where you retire rich and never have to work a day in your life

From the study of multi-millionaires in the last couple of years, no one hinged their success in amassing wealth on savings.

Here are a few reasons why your savings alone won’t make you rich;

  • Money loses Value

Fiat currency depreciates, whether naira, dollars, euro or pounds etc.; money will always lose its value to different degrees. A N100,000 in 2022 isn’t N100,000 in 2015. 7 years down the line, we can clearly see that the value has depreciated significantly. Imagine saving N100k for 3 years in the bank with a 0.0% interest rate. The value of the saved amount would have significantly devalued from what it was as at when saved. Saving money doesn’t protect you from inflation. 

  • Emergency expenses makes a mess of your savings

Unexpected expenses can arise during the course of savings that makes one offset their savings example could be a health emergency, an urgent household bill, etc., that requires one to nullify their savings. Although important, saving has always proven not to be the solution to building wealth because human discipline can come in the way.

  • Banks can collapse

We have seen several cases of banks collapsing and savers/investors losing a lot of money with little or no compensation; although this happens very rarely, it’s a very possible occurrence, if it ever happened once it can happen again.

That being said,

The best way to maximize your savings to build wealth is to channel them to ventures that cause them to multiply. You won’t get rich just by saving money; you will need to invest the saved amount to build wealth.

 

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