A conventional financial advice encourages us to save money. If you talk to someone about getting their financial life in order, they almost always say. “Yes, I know I must start saving more money”
But, is saving money really a wise way to achieve wealth and financial independence?
First, there is really no such thing as saving money. What most people believe to be “savings” is really spending. Think about it, if you keep $ 1,000 in a savings account and you are not invest that money, it will loses value every year that it sits there.
What I am talking about is inflation. The inflation will cause money to lose its value at about 3.43% every year. In addition, the value you can be creating by wisely invest that money and even if your return rate is only 5%, you actually lose 8.43% per year by saving money. So, mathematically speaking, if you have $ 1,000 in the bank, it means you spend $ 84.30 just to have that money in the bank, and if you add your service charge of $ 60 per year, you spent more than $ 100.
Of course it is good to have some available money in case you need it for a sudden financial emergencies, but beyond the amount, the saving money will become losing money. Of course, the assumption is that a saving account is “less risky” than a lot of investment. This is only true if your knowledge of how to invest the money is not enough to earn you a good rate of return. As people said in the first myth of modern investing, your level of risk is directly on your level of financial awareness and education.
One thing to consider is that the “saving” money will assure you a certain loss of at least 3.43% per year, and that’s without considering the lost opportunity of not investing any money.
However, the most dangerous thing about savings these days is that the average inflation of only 3.43% is going to increase very rapidly in the next few years.
A thousands of people who have specific knowledge of when and where to invest their money are positioning themselves to get rich. And at the expense of the people who do nothing with their money. Today is the day to decide which side of the wall you will be on.
You can get your financial freedom in a year or less by knowing what to invest in now. Discover the financial principles of the new economy and how to get benefits from the financial crisis to reach the financial freedom.