As a continuation of our Money Mythbuster series here is another great saying:

“A Penny Saved Is A Penny Earned”.

So what does that actually mean?  Firstly let’s translate this into today speak with Dollars.  “A Dollar Saved Is A Dollar Earned”.

Right – where did that first dollar come from?  Is this the old ‘chicken Vs the egg’ concept??  NOPE!!  You needed to earn the dollar first.  You can’t save something unless you first earn it.

So let’s be clear now.  Firstly we need to earn that Dollar.  Now – how to do that is a different topic to discuss another time.

Now we have earned our dollar.  Now to the ‘saved’ bit.  If we save the dollar and that’s it – then fast forward say 10 years.  Hang on – let’s go forward just 5 years.  In 5 years time what is that dollar worth?  Probably about the same.  But also maybe not.

If you had earned say $100.  Then in 5 years time would that $100 buy you the same thing / product or experience as it did 5 years earlier??  Consider this.  Are there some things today that are worth MORE than they were 5 years ago?

Sure there are – and also some that cost less.

The challenge most people have is once they have earned that dollar – they simply want to save it.  Or more correctly not ‘use it’.

One of our Money Mindset lessons (for those who have enjoyed that) we showed how saving or ‘hoarding’ our money is actually detrimental to not only your ongoing lifestyle but also to your finances.

Once you’ve earned that dollar (or that $100 or $100,000) then consider doing something with it.  You can either:

a.   Spend it on an experience that you know you will enjoy and provide you with amazing memories

b.   Gift it to someone else so they can enjoy their own experience (whatever that may be)

c.   Invest it so that the returns from those ‘Earned Dollars’ can be used for either of the previous examples.  And then repeated over and over again.  Oh – and you STILL KEEP the initial dollars earned.

So what is Duncan trying to say here?  What I am trying to highlight is for us to understand that a dollar saved is not a dollar earned.

A dollar earned and used wisely has the ability to achieve the same as many more dollars ‘saved’.  You can reach out and support so many more people.

You can enjoy the experiences that you feel is fulfilling.

And you can REPEAT the process over and over again.