Why is saving money more important now than ever? And that’s a really good question. Is it a valid question? I actually really believe that it is and I’ve come across a few things that I have been reviewing and just the whole economic turmoil of the world is kind of saying to me that this is a true thing.
Savings are going to become important. Let’s get into this. Let’s start unpacking it.
First off, we’re in a time in history that could really be instrumental on dissolving the middle class. Here’s why I say this. As countries get into a position where they are economically unsound, in other words, their currency is losing value, they’re getting into more debt.
Hey, a country getting into debt is just as bad as an individual getting into debt because it devalues the value of the country’s currency. Other factors here too, there is lots of wars that are happening. The Ukraine war, there’s rumors of this Hassan and well, it’s not a rumor, it’s a fact, this Hassan and there is also things happening in Iran.
You know, it’s one thing after another, so that brings a lot of chaos. It brings a lot of uncertainty. Now, closer to home in North America, let me ask you a question.
Are your wages going up with inflation? If they are, you’re one of the lucky few. Inflation was rampant in 2023 because of all the events that occurred, the COVID and you name it. It’s just nuts.
So that is bringing a lot of uncertainty into the financial markets. And we’ve seen it in the markets, but the cost of living has gone up quite a bit. It doesn’t make any sense.
Like the stock market eventually has to catch up. The problem here is we have less and less and less to do more and more and more. That’s not a good combination.
And that’s the reason why I think the middle class is a shrinking class. We’ve become very complacent with the middle class. The middle class kind of evolved after World War II and, you know, there was money and it was a status symbol to have a car and a nice house.
You name it. And now the young folks who are raising up and starting young families and that, they can’t afford to buy a house. They can’t afford to buy a nice car anymore.
And that’s really sad. That scares the crap out of me. This is going to be one of those putting a frog onto water and slowly raising the temperature of the frog.
We’ll never notice that he’s getting cooked alive. That’s what’s happening to everybody right now in the more rich countries. The first world countries is the fact that as time goes on and things get more expensive, we’re not going to have a high class, middle class and low class.
What’s going to happen is we’re going to have two classes, haves and have not’s. And if you don’t believe me, take a look at a lot of countries around the world. The countries that really manifest this and have probably for a while, a lot of third world countries.
There’s a small section of the population that are the haves and they have over 90% of the wealth of that country. And then you have a 90% of the people who have 10% of the wealth and they have nothing. They’re have not’s.
And as time goes on and as first world countries start to become more like third world countries, this is going to become more profound as time goes on. All you got to do is look in Canada, look in the United States. What is the rates of homelessness? It’s going up.
If interest rates continue to go up with housing and mortgages, we’re going to see a lot more of that. We’re going to see a lot more have nots where they don’t have a place to even put their head at night. That’s really scary.
So there’s definitely a lot of uncertainty there. Now there’s also lots of uncertainty in the money value that I’ve already kind of mentioned. Is the country’s currency going to be worth anything with all the inflation, all the spending, all the debt that’s being created.
And also too, the cost of borrowing. If there’s one time that getting out of debt is going to be important, it’s right now. You need, if you have any debt, you need to get out of debt and it’s going to be vitally important.
And also there’s one more factor that I think that is really going to hamper us in the long run. With the global economy that we have that is kind of happening and also the advent of remote working becoming an established thing. Hey, I’ll be honest with you.
I love remote working. I think it’s fantastic. It opens up opportunities.
Now the trouble here is, is it also opens up opportunities where there were none before. Let me give you an example. If you were working in a town or a city and there was a shortage of plumbers, all of a sudden the plumbers could start charging more because everything that is ever given as a service or a product is based upon supply and demand.
The higher the supply, that means the lower the demand and the less the price. But the lower the supply, the higher the demand. And it’s going to raise the prices because there’s not enough people to get the job done.
With the advent of remote working, there is some things that will always need somebody locally to handle it. You know, you need somebody to fix your car or you need somebody to wash your carpets in your house or to perform a service. But a lot of services can be handled remotely.
And with the advent of AI, that could be a problem too. Who knows? Only time will tell on that one. So what happens is, you can hire somebody from one region that’s cheaper to work in a region that’s more expensive and that company can save money by hiring that person remotely.
I actually benefited from that, believe it or not. I was working for a U.S. company for about a year, almost two years. They gave me better rates.
And what was starting to happen was there was a bit of a tech dream because a lot of workers in Canada were working for companies in the United States because Canadian workers were cheaper. So what happened was it caused the rates in Canada to go up as well. Rates literally have raised between 20 and 50 percent in my trade because there was such a drain of Canadian workers.
I can get much better rates. It was a good thing for me, but it’s not a good thing for a lot of people. And I believe that this is going to be a continuing problem as time goes on.
I also believe that there’s one more big reason, but I’m going to wait until the very end here to share it with you.
Why is saving more important now than ever? You have the power of compounding and it’s a very powerful force. Learning to save now can make such a difference. A dollar you save today can be worth like 10, 20, 30 dollars in 20 or 30 years.
Ability to save is a skill that it needs to be learned. You have to go from having the desire to consume and use to actually saving. I always say in my videos, don’t rob from your future self.
So saving is really important. And with all these other facts that I’ve mentioned in this video, I think it’s really important for you to realize that saving is more important now than ever. You need to have that idea of saving.
Now, you could say to me, well, Frank, I’m 60 years old. You know, is it still important? Absolutely. Even more for you, because of the fact that saving, you need to make sure that you save, because in the long run, there has been lots of rumors of, will the government be able to pay pensions one day? Who knows? I don’t like to be a naysayer, but who knows? So think about those points.
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