<prompt> Human: Im quite new in this subreddit so I checked the FAQ. Its one of the most organized and to-the-point FAQs Ive seen.But I noticed that the first section is about paying debts, and saving for retirement. Although I find it great to have a pool of money for emergencies, should you really save for retirement?Rather than have a pool of cash that slowly dwindles into nothingness which a lot of people seem to advise on, why not turn this pool into an even bigger pool which constantly generates you cash?What am I missing?  <response>: you invest your retirement savings, you dont just stack a pile of cash. when you save in retirement-designated accounts you get a huge tax benefit. saving for retirement is exactly the same as investing to create passive income so that one day you will not be required to work. it is unsophisticated to just look at cashflow. you should consider total return. for example, you could buy solely dividend paying stocks and bonds and live off the dividends and interest coupons. or you could not limit yourself and invest in a broader range of securities, reinvest all the dividends and interest payments to buy more of the investments at the relative weights that you selected, and then simply sell a portion of the investments each year to cover your expenses. this is the more refined approach. the two things you are suggesting are really one in the samecheck out rfinancialindependence 