Super Saver

Saving one’s hard come by earnings is more than just a byproduct of the frugal life, as shared in earlier blogs, it’s a key characteristic of frugality. Just as the frugal person instinctively looks at every acquisition of a good and service through a need vs. want analyses, the frugal person also instinctively saves as much of their earnings as possible.

More than just dropping a few extra dollars in the piggy bank, the frugal person is a super saver. What is a super saver? Someone who saves until it hurts!

Bottom line a super saver will put away everything, after monthly basic needs are met and there is a sufficient reserve for emergencies. Needless to say, the actual dollar amount is a constantly moving target but the premise remains the same, save as much as possible every month, religiously.   One important point of clarification, when I say “save” I really mean “invest”. No problem with keeping a savings or checking account with a sufficient reserve to cover a month or two of expenses in the event of an emergency.

However, “savings” should be invested to compound the earning power of every hard-earned dollar. Investing “early and often” is a financial truth to build wealth. That all briefs well, but as stated investing comes as a challenge for some as it implies giving up a little comfort today to secure financial freedom tomorrow. Investing also entails assuming some risk to those hard-earned paychecks. Most of us are generally not hard wired to save for tomorrow or accept risk.

Just like going to the gym and building muscle memory, investing must be repetitively practiced until it becomes a conditioned behavior. The time value of compounding money is a proven fact and can never be underestimated. What’s the best way to invest?  I am hardly qualified to give that kind of advice! But I am happy to share what’s worked for me.

Simply put, my wife and I maintained a mixture of investments, taxable investment accounts, tax advantaged investments such as IRAs, 529s, 401K and last but certainly not least real estate. Our overall mix turned out being about 50/50, mutual fund investments and real estate but obviously that ration changed some over the years. We’ve always only maintained a bare minimum emergency fund.

As far as which investment, I’d say initially, it doesn’t matter! When starting out, just find a good five-star rated fund and start socking it away! Even if only $50 a month. However, after one’s portfolio starts to grow, I believe it is important to seek the advice of a professional. We’ve been very fortunate to have the same financial advisor and friend for over 20 years.

Lastly, how does one take the guess work out of when to invest? That’s easy, ignore the tough “when to invest” question by simply dollar cost averaging and investing with regular frequency. Dollar cost averaging is simply investing a fixed dollar amount on a regular basis, regardless of share price. The opposite of dollar cost averaging is market timing which is holding those investments to try to catch a low point in the market. 

While dollar cost averaging can be scary in a bearish market when it seems, there is no bottom to the drop in share prices, it still remains the most effective way to invest over a long haul. It’s hard to see this when starting out but going on 30 years of investing in mutual funds, I can see it really works. In the long run, that nest egg will grow!

There are numerous ways to become a super saver. I’ve shared what worked for me. The bottom line is a frugal person is not frugal unless they save. Determine the best way to make those hard-earned dollars work towards the goal of reaching financial freedom!

Look for, Being Frugal, a Truth to Build Wealth, coming to Amazon in early 2025!

Looking for a good how-to on wealth building? Check out my book, Millionaire on a Worker’s Budget: Five Financial Truth’s to Build Wealth on sale now at Amazon!

Interested in rental property investing? Look for Collect Rent, Don’t Pay It: A Beginner’s Guide to Rental Property Investing on Amazon to learn how our family turned rental property investing into a successful side hustle!

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