Saving is Only a Half-Truth

Saving is Only a Half-Truth

Print Friendly, PDF & Email

​Situation: I’ve always been told to save my money. Isn’t that a great strategy?

The Principle

Money is a tool for leverage. It is not success or achievement in itself. What’s more, leverage is works whether you are in a debt position or an equity position. You may already understand that “debt position” means that you owe some money. You may have credit card, mortgage, or car note debt. Equity position refers to the value of assets you have on hand. You may have money in the bank or assets that could be liquidated for cash. What you may not know is how to utilize the ratio of debt to equity for your advantage. That’s the power of leverage, and its definition.

File Mar 17, 7 49 59 AMWith leverage in mind, you want to think beyond “saving” money. You want to put your money to work. It should make money for you. As with most everything, how you utilize this resource either yields desired outcomes or more problems.

The Pitfalls

You focus on accumulation of money rather than money as leverage for wealth. This can be an enticing trap especially for those who grew up with less means. The tendency to hoard or store up for a rainy day is deeply rooted in a fear of not having enough. The challenge is that this frame of mind leaves you vulnerable to financial predators and complacent to leveraging opportunities. You fear losing more than you seek understanding.


Your re-learning begins with the foundation of your money mindset. Rather than thinking of earning wages, you must focus on creating wealth. Your current perspective focuses on trading labor for wages. You work. They pay. A more sustainable perspective focuses on translating resources into capital. You translate. You influence outcomes. Capital can be utilized to develop infrastructure. Infrastructure defines and accesses institutions. Institutions structure influence.

File Mar 17, 7 50 33 AMLeverage money, people, information, and time for returns. You think that holding on to money (burying it) is the goal. The goal is rather to circulate it for a return. The question becomes, “Where are my most profitable opportunities for circulation with the largest returns?”

Saving money is an example of a partial truth. It is wise to manage your responsibilities and to plan for scenarios. But, money is more than cushion and emergency duct tape to plug holes in your boat. Money can support investment in a new boat, one with no holes. You don’t just need saving. You need strategy. Investment of money leverages access, people, mechanisms, and markets.


  1. Use your money to access knowledge, institutions, relationships, and markets. These are your opportunities to leverage your goals and increase capital.
  2. Look for ways for your money to work through investments that result in percentages added to your original investment.
  3. Calculate the value and costs of your time, relationships, and information just as you do money. These are valuable resources as well.
  4. Create purpose for your money similar to how you create purpose for your life. You would never say, “This life is just in case.” So, don’t say that with money either.