Are you thinking about saving your money?
Hold on! You may want to read this short article before you start.
According to Forbes, a savings account is a deposit account that’s designed to hold money you don’t need or plan to spend right away. A saving account is different from a checking account, which allows you to write checks or make purchases and ATM withdrawals using a debit card.
While it’s important to have a few months of saving (6-12 months) for emergencies, you should not have all your money in a saving account.
Here are 2 Major Reasons Why You Should Not Save Your Money…
Interest is the amount of money a lender or financial institution receives for lending out money. When you save your money, it has no room to grow. There’s virtually no interest to be earned on savings. Presently, the national average you can get on a regular saving account is .01% on interest. When your banks take your money and invest it for 10-30% of interest, and can’t give you at least 1%, it’s obvious saving is not the best way to grow your money.
Inflation is the rate of increase in prices over a given period of time. Each day your money loses its value due to inflation. For example, the same house my parent bought for $100k ten years ago, is now selling for $200k. It’s the same house, but the price went up due to inflation.
Saving is important for emergencies, and that’s all you need. After you have enough liquid cash available, it’s time to build wealth by investing your money. I recommend that you consult with your financial advisors before pursuing your investment goals.
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