Investing versus spending
Are you an investor or a spender?
Investing is all about delayed gratification.
Imagine you have a magical money tree in your backyard. Every day, this tree grows shiny, golden coins.
Now, you have two choices: you can pick the coins every day as soon as they appear, and you'll have a little bit of money to spend right away.
This is like getting a treat or a toy every day.
But, there's another option. Instead of picking the coins right away, you can choose to leave them on the tree for a while.
When you do this, something amazing happens. Those coins start to multiply and grow even more!
So, if you wait for some time without picking the coins, you'll have a lot more money to spend later on.
Investing is a bit like that second option. Investing is about being patient and waiting for your money to grow, like waiting for those magical coins to multiply on the tree.
You want another example?
Person A:
- Spends $4/day on buying coffee at Starbucks
- Result: spends $19,200 (!) on buying coffee over 20 years
Person B:
- Invests $4/day in stocks of Starbucks
- Result: makes $161,396 over 20 years
The conclusion?
Start buying stocks of the companies you love instead of their products
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"There’s one investment that supersedes all others: Invest in yourself. Address whatever you feel your weaknesses are, and do it now." - Warren Buffett