My habit of checking my account is like the “fridge phenomenon” but worse. After every check, I say to myself, “Kwaku! You know the exact balance, what makes you think it has changed in the last 36 minutes?” Maybe it’s wishful thinking or desperation, but this obsessive checking was getting embarrassing. It was time for a change.
The personal finance gurus preach: “Do not overspend,” “Do not indulge in fineries,” “Live the barest possible life in the hopes of a fat future retirement,” and “Remember to invest every excess penny in lame mutual funds, index funds, and treasury bills.” But their advice felt hollow. I was sacrificing now for a future that felt increasingly distant and uncertain.
This article explores why I stopped focusing solely on saving money and shifted my focus to wealth creation through entrepreneurship and strategic investments. I’ll delve into the limitations of traditional savings advice, the importance of enjoying your wealth now, and the distinction between wealth preservation and wealth creation.
The Illusion of Savings: Beating Inflation
A 2–5% return on savings? Inflation mocked me. Despite my sacrifices, I wasn’t living lavishly. Even small indulgences, like a slightly nicer shoe or a fancier water brand, ate into my savings. The tiny indulgences felt like betrayal. Spending on durable items that improved the quality of my life felt like hell. “Why am I doing this to myself?” I wondered.
Traditional savings advice often overlooks the corrosive effect of inflation. While diligently saving, the real value of your money can be eroded by rising costs. This can lead to a feeling of disillusionment, as the sacrifices made today don’t seem to translate into significant gains tomorrow. You must consider other options that outpace inflation!
It’s like running on a treadmill: you’re putting in the effort, but not really going anywhere. This realization led me to question the conventional wisdom of prioritizing savings above all else.
The Entrepreneurial Path: Building Wealth Actively
Disillusioned by my savings journey, I started looking at how the wealthy accumulated their fortunes. Most wealthy people make money as entrepreneurs via product creation, owning intellectual property, or solving societal problems at scale.
I examined three wealthy individuals I know, and their success confirms this idea. One built his wealth through technology investments, another through a chain of retail stores citywide, and the third in timber and wood processing. Their paths diverged, but they share a common thread: they actively created wealth, rather than passively saving it.
Entrepreneurship offers the potential for exponential growth, far exceeding the returns typically associated with traditional savings accounts or low-risk investments. By taking calculated risks and creating value, you can accelerate your wealth-building journey.
Wealth Creation vs. Preservation: Understanding the Difference
It’s an established fact that wealth grows through enterprise and investments, yet many financial planners promote excessive savings and penny-pinching, investing in mutual funds, etc. I was missing the distinction between wealth creation and wealth preservation. These personal finance gurus are looking at low-risk investments that yield over time. They are preaching delayed gratification, the concept of sacrificing today for a better tomorrow.
Wealth creation is about generating new wealth through active endeavors like starting a business, investing in innovative ventures, or developing valuable assets. Wealth preservation, on the other hand, focuses on protecting and maintaining existing wealth through low-risk investments and careful financial planning.
Both are important, but understanding the difference is crucial. Prioritizing wealth creation early in life allows you to accumulate assets more quickly, while wealth preservation becomes more relevant as you approach retirement.
Enjoying Wealth Now: Redefining Financial Freedom
As any red-blooded human being, I want to enjoy my wealth today while having some left for tomorrow. This isn’t about choosing between today or tomorrow; it’s about rewriting the rules. Wealth is better enjoyed young and serves as a powerful motivator for me to keep hustling.
What if “financial freedom” isn’t a number in an account, but the courage to build something that lets me live my best life now? This perspective shifts the focus from accumulating wealth for some distant future to creating a life you love today, while still building a solid financial foundation.
Financial freedom is about having the time, resources, and flexibility to pursue your passions, spend time with loved ones, and experience life to the fullest. It’s about creating a life that is both fulfilling and financially secure.
Rewriting the Rules: A Balanced Approach to Financial Growth
Knowing the difference between wealth preservation and wealth creation is critical for my financial growth. It’s not about abandoning savings altogether, but about finding a balanced approach that combines strategic investments, entrepreneurial endeavors, and mindful spending.
It’s time to ditch the “all or nothing” approach to finances. You can create wealth, protect it, and enjoy the journey all at the same time!
I am no longer saving every penny! I am investing and looking to create wealth that I can enjoy now and in the future.
Conclusion: Embracing a New Financial Paradigm
My decision to stop obsessively saving money was a wake-up call. It forced me to question conventional wisdom and explore alternative paths to financial freedom. By focusing on wealth creation, enjoying my wealth now, and understanding the difference between preservation and creation, I’ve embraced a new financial paradigm.
The key takeaway is that financial freedom is not just about accumulating wealth; it’s about creating a life you love and controlling your financial destiny. It is about creating a life that resonates with you!
So, take a fresh look at your finances, explore your entrepreneurial potential, and dare to rewrite the rules. It’s your life, live it to the fullest. The conventional wisdom of financial planning does not apply to everyone. Do not be afraid to pave your own path.
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