Traditional personal finance advice tells people to start saving a portion of their income at an early age. My philosophy is to the contrary. To date I’ve chosen to spend so that I can generate returns in the future exceeding what I would earn on interest by saving.
I’ve invested in things like education, events, income generating side projects, etc. to improve my ability to earn. By re-investing instead of saving, one increase future income streams to a greater degree than setting it aside.
To Illustrate, by saving x% of your income now, your earnings may be something like 50k, 100k, 200k over the next several years. By re-investing it, you may be able to achieve income levels of 50k, 150k, 500k.
I also spend money on fun while I’m young and it’s easier to enjoy. I invest in my personal life as to maximize the future “returns” I achieve there as well.
My tolerance for risk is also higher while I’m younger and I have fewer obligations. The goal is to generate higher return on investment (increased earnings) than by saving (interest). I’m thinking of myself like a company – investing in growth instead of paying dividends.