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The Wise Investor


1.4 Common mistakes
Kate had been thinking for some time about
John's words. Although he had not explained the
details, it seemed a little too good to be true. If
things were as simple as they sounded, she couldn't
understand why everyone was not successful in the
way John described.
Kate's grandfather sat on the park bench, the
cool wind on his face and the warm sun on his skin,
and waited for his granddaughter to speak. If he
was to teach her about money and investment, she
must believe that it was worthwhile, and it would
work for her. There would always be doubts, of
course, but she must believe deep down that it
would work in the end. If she didn't, then they would
be wasting their time.
"John," she said at length, "if it's so simple. Why
doesn't everyone do it?"
"There are several common mistakes people
make, Kate. The first, and the most fatal of all, is
that most people spend everything that they earn.
They may have some money put aside for a rainy
day, and they may save up for a new car or boat,
but overall they end up spending all money they
earn.
To achieve financial success, you must save
money and invest it. Even if it is a small amount at
first, you must increase your wealth each year.
Each year, you must have a little more money
and wealth than the year before. If you save and
invest wisely, you will gain wealth and freedom. If
you spend all the money that you earn, however,
then you will still be financially dependent in fifty
year's time. You will be dependent on your salary
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