Immediate Savings Will Reap Long Term Rewards

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As the old saying goes “Cash is King”, however, the problem is, nowhere does it tell you where to
get the cash from.

Growing up as a child of the television and computer generation, I, like the many others have been bombarded with the next “in thing”, from computers to clothes. As I have grown up throughout the so called “Boom Years” credit was as easy to get hold of as the common cold. Like many of my peers, throughout my formative years of late teens and most of the twenties I spent what I earned, having a good time, buying what I wanted and generally not looking to the future. I thought that I would always be able to earn more money. Ideas of retirement, buying a house, having children where so far in the future there was absolutely nothing to worry about.

However wind the clock back to our parents and our grandparents the landscape was somewhat different. My grandmother always told me “Save money, even if it is just £5 a week, save something”, yeah ok Gran! The reality is, she was right all along.

Even with all the hardship of the recent recession and financial crashes, all the ...
... news reports you hear is how the Banks are at fault and the economy won’t recover unless they start to lend more, but this is how we got ourselves into the mess in the first place. Now it’s not the lending of money that creates growth, it’s the spending of money which creates growth. Where that money comes from is largely irrelevant to growth.

In that case consider this, what if over the past 15 years of the so called “Boom Era” instead of taking that small loan to pay for a holiday or staying in for 1 Saturday night out of the month, you put that equivalent, let’s say £55, into a bank account each month and save it. I am sure if you are honest with yourselves that most working people in the UK could have afforded £55 per month and wouldn’t really have missed it. Today you would have £10,000. Now it won’t go very far towards retirement but put it this way, we certainly couldn’t be any worse off with the economy, and you would have £10,000 in your pocket. If everyone who was in employment over the last 15 years had put this away each month the total would be £291bn which is more than the of £200bn the Bank of England has used for Quantitative Easing during the financial crisis (figures from the office of national statistics).

As a result, the UK may be in a better position right now; people might not be so annoyed with our government for austerity measures or the our bankers for their misdealing’s and family budgets may not be as tight. You don’t need to invest in private wealth management to realise all of this could have been avoided for just £55 per month.

Borrowing money is fine, I’m not saying don’t borrow money, however always remember the money you borrow has to be paid back eventually, and you will pay more for it.

Essentially I feel that the youth of today must be taught that saving is crucial to both their individual prosperity and the prosperity of the economy, whether that be world, country or regional.

So with a “hat tip” and sense of humbleness I refer to a statement by the generation that frowned upon credit and at a time when if you couldn’t pay cash for it you didn’t buy it, which ultimately helped you understand the value of money when you had to work hard to save it.

“Save money, it doesn’t matter how much you save, but save something”

Ends

Liberty Wealth Management provides leading private wealth management services for English expats who are looking to reside in Switzerland.