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S is for Saving – The Elite Investor Club’s A – Z Guide of Investing


To join the Elite Investor Club, head over to Welcome back. For this episode I want to address the starting point for all wealth creation. It’s a discipline that is essential if you are serious about becoming financially independent. And it’s one that so few people possess in today’s Me Now society. In our A to Z of investing, S is for Saving. It all started with something called Hire Purchase or the never never back in the post war decades of the fifties and sixties. Lots of shiny new televisions, washing machines and fridges that would make your life easier if it wasn’t for the cost of buying them. My grandparents wouldn’t dream of buying something they didn’t have the money for. They saw it as a one way ticket to the Victorian work house. But my parents generation wanted all the latest gadgets, especially when my mum returned to work and couldn’t spend all day doing housework. Then credit cards came into wide spread use in the nineteen seventies and eighties, making it possible to buy what you want now without even the hassle of paperwork for an HP contract. The idea of saving up to buy something became a quaint relic of a bygone age. We lost a very important baby when that particular bath water gurgled down the plug hole. The habit of saving not just for consumer goods but for the long term future. From the end of World War two to the start of the nineteen eighties, on average we saved eight per cent of our income. So, if we earned twenty thousand a year, we’d keep back sixteen hundred pounds for the future. By the nineteen nineties this had declined to just two per cent of our income, a mere four hundred quid from the same twenty thousand earnings. So, in a period when our life expectancy has increased by a decade, the amount we’re putting away to support ourselves in that much longer life has fallen by seventy five per cent. Move on a couple of decades and the full impact of this aversion to saving is starting to be seen. The average pension fund value is between thirty and forty thousand pounds. For women, it’s nearer ten thousand. While I welcome the recent pensions freedoms that give us much more choice about how we access and use our funds, there’s no escaping the ticking timebomb. Many people, in fact I would say the majority of people, even in leafy suburbia, are heading for an old age of poverty and hardship. And it’s almost entirely self inflicted. Don’t get me started on the politics of how we’re going to support this profligate live for today generation when reality bites. But, I beg you, don’t follow them down that road to ruin. Start a system today. Open an account at a different bank to the one you normally use. Call it your wealth account. Then, determine a percentage that you will save, preferably at least ten and hopefully twenty or thirty per cent. Here’s the hard part. Every time you receive a payment, take a walk to your new bank and deposit the agreed percentage into your wealth account. If you’re paid monthly, this will be a once every thirty days stroll down the High Street. If you’re self employed or you own a business, this needs to happen every time you get an invoice paid. Yes, it could even be every day. Don’t knock it until you’ve tried it. Within a few months the habit will be deeply embedded in your psyche. And the balance on your Wealth Account will start to look more and more interesting. Once it gets up to ten thousand pounds, there are some very interesting investments that will give you inflation beating returns. Get into a cycle of saving and investing and you’ll start to accumulate real wealth within less than a decade. It’s straightforward. It’s simple. But it’s not easy. If it was easy the Mediocre Majority would be doing it. Guess what. They are not watching this video. They are in the Apple store loading their credit card with new debt for their I Phone 6. You know better. A small amount of delayed gratification today will make you wealthy beyond their wildest dreams without needing a lottery win. By spending a few years doing what the majority will not do, you will enjoy a life of wealth that they will never know. And it starts with setting up your wealth account and adding to it every time you get paid. What are you waiting for? Stop watching this and get yourself to the bank right now!