What's the Point of Investing?

By Dr. Steve Sjuggerud
April 11, 2008

"Nice to meet you... Hang on a sec... Let me text my husband." My wife and I stand there waiting. The girl busily taps out a text message on her new iPhone.

She's not so quick with the typing, but we know what's going on... She's just showing off that she owns a $500 phone – hot stuff in rural Georgia. We saw her arrive... She drove a black Suburban of some sort, with enough chrome to make a Detroit drug dealer blush.

She and her husband are young... probably in their late twenties. He's apparently a builder in Georgia. Of course, homebuilding in Georgia died about two years ago... But even though their income must be down, their spending hasn't changed.

This young couple isn't the only one out here sporting an iPhone and a blingy black Suburban. What's going on here?

Me? I don't have an iPhone... Or a blingy Suburban... But I probably have one thing these conspicuous consumers don't: The house I live in is fully paid for.

I handle my money differently. I could buy an iPhone or a Suburban tomorrow. I wouldn't need a penny of debt to do it. But I won't... Why? Because I know those things won't make me the slightest bit happier. I'd be the same dolt I was before... only now, I'd be $50,000 poorer!

It took me a while to get to this point in my life. But I'm glad I made it... I'm at the point where I can buy what I want. But I don't. It's an important point to reach.

This brings me to the point of this essay... What's the point of saving money anyway? What's the point of investing?

When you get older (if you're not already older!) just what are you going to buy with that money you've saved?

Jonathan Clements gave a good answer to this in his farewell column for the Wall Street Journal this week (Clements has written more than 1,000 columns for the Wall Street Journal).

Clements says your savings "can deliver three key benefits." Even better, he says, "You can enjoy this trio of benefits even if you don't have great wads of cash." Here's how:

1. If you have money, you don't have to worry about it.
2. Money can give you the freedom to pursue your passions.
3. Money can buy you time with friends and family.

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