Key Takeaways
- When it comes to saving money, most people do so with a one-step approach.
- However, a two-step approach is more effective in the long run.
- You can grow your money over time with permanent life insurance, a 401(k), or other savings methods.
When it comes to saving money, most people do so with a one-step approach. In other words, when they receive a tax refund of, say, $2,500, they’ll take it and put it away for a vacation or some other expenditure. While it’s not a bad technique to save that money for a vacation, it doesn’t do anything for your savings in the long run.
So what’s the two-step technique? Well, it’s building cash value up so that your money’s there later on. For instance, you would take that same $2,500 refund and put it into a permanent life insurance contract. That money grows over time and it’s the second step of forced savings, instead of disappearing because you had it put into your checking account – and if it’s there, you know you’ll spend it!
Now, putting that refund into a permanent life insurance contract is just one example – you could be saving it in your 401(k) or any other option available to you, but the key is to take that refund and put it away. If you want to grow your wealth, this two-step approach will make a big difference. Until next time, enjoy.
