I totally support that saving and investing play vital roles in each individual’s life, regardless of age, nationality and religion. Such measures not only thrive from human’s nature, ensuring stability in the future, but also provide fundamental foundations of financial systems and national security systems.
To begin with, according to Permanent Income Hypothesis proposed by Friedman, a prominent economist, contemporary human beings are naturally endowed with a tendency to smooth their expenses over their life, compelling individuals to save for their well-being in the future and after retirement. Moreover, most humans are risk-averse, which restlessly reminds us the importance of saving for emergencies. For instance, my mother periodically transfers a certain amount of money into a specific investment account for the preparation of retirement fund, reallocating the economic surplus from working period to compensate the economic deficit period in life. Additionally, she aslo(also) purchased various kinds of insurances, granting her the rights to receive abundant compensation if needed, which reinforces my claim of emergency saving.
Secondly, from a more macro perspective, such saving culture also serves as a primary factor in modern financial system. With such, a central bank could easily create money multipliers, controlling the liquidity of macroeconomics. For example, imagine that if Orange nation issues 5 dollars, equivalent number of money would be transferred within the market without saving culture. However, if a citizen deposits 3 dollars in a bank in exchange of future usage, other citizens would gain the opportunities to borrow and thus creates liquidity of up to 8 dollars, which radically strengthens the effects of such currency.
Last but not least, saving culture is positively correlated to governments’ burden upon national security systems. For instance, some developing countries have not yet facilitated the consciousness to save for emergencies or shaped a solid environment for commercial insurance businesses. As a consequence, the governments are doomed to spend lots of effort working on compensating the financially disadvantaged patients, but this often turns out to be inefficient.
In conclusion, saving is an indispensable measure for individuals, which would also aggregately benefit the economy itself even without intention, ensuring future stability and fostering social welfare.