Why putting money into saving account is not the best way to grow money?

If you agree that saving your extra money in the bank alone makes you wealthy, then you probably share the same perspective with 66% of adults in the world .

Growing up, I used to think that wealthy people were good at saving money. I thought all you had to do was to get a job that pays you enough and live below your means (spending less and saving more). Wala! You will eventually get rich by saving your extra money in the bank. Unfortunately, it is not that straightforward. One will have to be salary rich for this method to work.

Are you salary rich or salary away from debt?

One would probably need a six-figure salary or income combined with restricted spending to make it to the wealthy bracket with just extra savings. But then, if you are on the other side of the spectrum like me, feeling the inflation slap, then we need to aim to grow money, which is possible through investment. Although one has to identify the best and most feasible type of investment to step on the wealth pedal.

It is always recommended not to put all your eggs in one bucket but to aim to diversify. This practice is designed to help reduce the volatility of your portfolio over time. So there are many different types of investments, and cryptocurrency is one of them.

The savings account system is not designed to create wealth but just to provide financial security and to cultivate discipline in our spending by aiming to save extra money. The best return you can get out of your savings is the peace of mind knowing you are financially ready in case you need an emergency fund. This also helps one to be free from debts as a result of less spending.

Okay, I do get it that banks offer different savings options that can yield interest over the years, but that relationship is meant to keep your money safe, and if you happen to fix it over a long period of time, then the bank will give you a "tip" for letting them use your money to grow their money.

If your aim is to grow your money, your best bet is to find an investment that works for you. It is always good practice to research the historical prices and have an idea of what to expect from your choice of investment (i.e. volatility vs stability), so you don't always give in to media hype.

Posted Using LeoFinance ^Beta