On a follow up to my previous post, I would like to talk about savings and wealth a little. Saving is imperative to financial independence, but simply having money in the bank is not enough to improve your financial situation. I agree that having money in the bank can help you get out of tight situations, but you should be able to budget for most of life’s surprises.

For several years, I made the mistake of simply saving money into a separate bank account, and not actually investing the money in way I could get a decent return and capitol gain on the money. Eventually the money went on personal expenses and whatever I needed money for at the time.

The times in my life that I have been able to significantly increase my wealth was when I took a certain amount of money and invested it in either stocks or property. During these times, I extended myself a little, but in the long run I was able to increase my wealth by taking on a small amount of risk. Fortunately most of my investments have gone well, so I believe I have done fairly well with only a small amount of upfront investment.

I would like to add at one stage of my life, I was on pretty shakey ground, the whole story, is probably best left for another post. The point I am trying to make however, is that savings are great, but you need to actually invest those savings in something that is going to appreciate in value, to create real wealth.

Getting financial advice from professionals is good advice, but if you care enough about you and your familiy’s future, I believe you need to carry out your own throrough research to find out what you are interested and comfortable with investing in.