I’m 31 years old and I’m just now learning about money. Growing up, I knew that people went to work to earn money so that they could afford to buy clothes and food and other things that you needed. My mom, dad, and my grandmother all told me to save all of my allowance money. They told me to save, save, and save some more for a big purchase instead of smaller purchases. I listened to them. Indeed, when I secured my first “real” job in my early twenties, the first thing I did was to open a savings account.
Fast forward a few years and I was able to save a small emergency fund. Dave Ramsey (you know, the financial guru) advises having at least a 3-6 month emergency fund. It is only now in the wake of the Coronavirus pandemic do I realize how important it is to have an emergency fund.
Toward my late twenties to where I am now, I started realizing that putting money into the savings doesn’t help it to grow. It just stays there. It’s like a car full of gasoline in a parking lot. You can use it but the more you use it, the less you have. I usually try not to use it and try to put as much as possible into the savings.
Putting money into the savings doesn’t do anything except give you a nice little nest egg for emergencies. In order to get wealthy, you have to invest your money. Open up a Roth IRA or a 401K with your employer. Invest in some mutual or index funds. Wait a few years or longer and watch it grow. The only catch is that once you put the money in, you can’t take it out without being penalized.
I wish that I had learned about investing sooner. I wish I had learned about it in high school and college. But they don’t really teach you that. They just teach you how to analyze a paper or how to solve an algebraic equation. They don’t teach you how to file taxes, save, invest, budget, or other things that you need in the real world.