Owner vs. Spender
Investing in business is superior to buying their products. Why?
Investing in business is superior to buying their products. Why?
When you invest in a business, you benefit long term by their earnings growth and dividends paid out (do this by owning thousands of companies in a mutual fund rather than 1 or 2). Your money “grows” after the initial investment. When you buy a product from a business, that product depreciates in value very quickly as it “shrinks” soon after the purchase.
Focus your efforts on the former and reduce the later by owning low cost no-load stock index mutual funds at Vanguard and inside your retirement plan at work. This is how wealth is created over time. Compound interest and time will demonstrate the value of this approach. Learn more by reading What Color is the Sky.