10 Nov Why You Should Invest Your Money Rather Than Save It In The Bank
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
– Robert G. Allen
In the economic circles of the modern day there is a debate as to whether one should save their money in a bank or invest it in some other entity. Many individuals in the industry are of the opinion that money should be invested, whether you do so through paper currency or E-currency.
On the contrary, there is another group of people who are of the opinion that rather than investing, a safer option is to place your money in a bank’s savings account.
I am personally of the opinion that for better economic growth, people should be encouraged to invest. In this article, I will share with you the benefits of investing and will also let you know the demerits of putting your money in a bank.
The Advantages Of Investing
- Investing your money provides you with multiple growth opportunities. The majority of modern day investment vehicles offer long-term returns on your money. These returns help in the building of your money which ultimately results in the creation of wealth.
- Most people try to save money for their retirement; well, the best way to save money is to put it into a portfolio of different investments. These investments will give you a healthy amount of funds that can be utilized by you once you retire.
- For a greater amount of money, you need to invest in a place that can give you a better rate of return. In comparison to savings accounts, the rate of return of a suitable investment is much higher. In a nutshell, for a higher return you need to invest.
- For achieving your big financial objectives, you need to invest. If your particular investment is giving you a higher return, then this means that you will be earning a larger amount in the long run. Whatever return you get can be used for even greater financial objectives such as starting a business or buying a property, etc.
- For business expansion and creation, you need to invest. There are many investors out there who support different entrepreneurs. These investors enjoy the procedure of establishing and developing new businesses so that they may get a robust return on their investment in the future.
- The majority of new ventures require monetary backing. The only option for these ventures is to look for investors. As an investor, you can help a new venture by investing some cash into the business. If the business is successful you can take a share in the equity. Yes, this can be risky but, if successful, can provide you with healthy returns.
- Investing is good for the economy as a whole, especially if one invests in a business. Business investing helps in the production of new jobs which ultimately contributes to the smooth running of the economy in general.
The Disadvantages Of Saving Money In The Bank
- There are several online banks today which compound interest daily. However, most credit unions and traditional banks only compound interest on a monthly basis. This phenomenon confirms the fact that your money’s full potential does not get realized, especially when compared with the other investment options that are available today.
- If you are a citizen of the US then you must be well aware of the fact that there are federal limits on the money withdrawals that you can make. This particular law is known as “Regulation D“. According to this law, you can only make six withdrawals or transfers from your savings each month. In case of any additional transactions, a fee is charged.
- There are some financial institutions that charge a huge amount in fees for the use of their savings accounts.
There are many other reasons why I believe that investing is a far better option then placing your money in a savings account.
If you want to know more about the issues pertaining to savings accounts then consider this article by budgeting.thenest.com. If you are looking to expand your money growth then start searching for viable investment options.