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Welcome to the humble savers newsletter
I’m currently in North Wales, UK, which is a very interesting place with a long and proud history. In the local village, the ‘very old’ Welsh language is still widely used as a first language for the locals including my father. They are all quick to point out that the Welsh are very good savers and my father quoted this relevant verse in Welsh to me:

Tra yn byw yn gynil,  gynil

Aeth un ddafad imi’n ddwyfil.

Tra yn byw yn afrad, afrad

Aeth y ddwyfil yn un ddafad.

Vicar  Pritchard, Llandovery, Wales.  (1800 A.D.)

Loosely translated it is:

When I lived prudent, prudent

One sheep became two thousand.

When I lived wasteful wasteful

Two thousand went to one sheep.

There would be many similar stories and poems in all languages highlighting that one needs to be careful with the way they live or otherwise all can be lost. These days, we see people in financial strife due to large debts via credit cards and personal loans.
These debts are often commenced to buy goods and services that serve little purpose, other than to satisfy our need for instant gratification (the need for satisfying a pleasurable emotion). It demonstrates how easily we can live beyond our means, driven by our emotions.
Things have changed since this poem was written some 200 years ago. The marketers have finely tuned their campaigns to the point that we often feel guilty if we don’t buy the latest gadgets and fashions and therefore satisfy our ‘pleasurable emotions’. Keeping up with the Joneses so to speak. To help overcome this problem we have recently written the article:

This article along the previous articles Saving Money by avoiding Impulse Buying (Part 1) and Saving Money by avoiding Impulse Buying (Part 2), highlight the need to change our spending and savings behaviours. Many of you may have heard the Albert Einstein quote “The definition of insanity is doing the same thing over and over and expecting a different result”. Put simply, if you can’t save today, you must change your ways if you want a better tomorrow.

What’s the difference between a Saver and an Investor, and who is the most successful?

A ‘saver’ will typically focus on maximising their opportunity to build wealth by limiting their spending. Whereby an investor will focus at putting their assets to work in the various investment markets.

Typically the most successful will be good at both. The most obvious example is Warren Buffett who despite his wealth, still lives a relatively frugal life. He resides in the same house that he purchased in 1958 and is valued at about $700,000 and eats at the local diner. He is now just as famous for his philanthropic ways as he is for being regarded as the most successful business leader of our time.

Financial Trivia

What is the PE Ratio that is often quoted by stock brokers? The ‘P’ stands for the current share Price of a company and the ‘E’ stands for the Earnings per share, (the full year profits divided by the number of shares that have been issued). The Price is divided by the Earnings to give a Ratio. For example, if company ABC had a share price of $10.00 and it’s earnings represent $0.75 per share, it would have a PE Ratio of 13.33 ($10/$0.75 = 13.33). Often it can be described as a multiple, e.g. ABC is trading at a PE multiple of 13.33.

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The humble savers team

 

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