Two Simple Steps to Future Wealth

When you look at it from the perspective concentrating on saving and then taking that savings to invest, however, it means that the person would only need to save $750 for the entire year or a little under $65 a month over their normal spending to get the same return. It is actually even less since this isn't even taking into account the interest that would be earned in the S&P 500 index fund. Most people can squeeze much more than $100 a month in savings from their budget without even feeling any pain.

In addition, implementing a saving strategy is much easier than learning to pick stocks and provides quicker returns. Your savings are usually immediate and not realized over the entire year. Add in the benefits that there are no taxes levied on the money you save and no stock market fees to pay in order to get the savings and it becomes even more of an advantage to concentrate your time on learning to save money.

Once you realize that you're better off spending your time budgeting and living frugally rather than searching for a better investment return, then there is no reason to panic when events like last Monday's occur. If you spend your time learning how to save money while not disrupting your lifestyle, then even when the stock market is in turmoil, you can rest peacefully knowing that your savings will simply buy more index fund shares.