News
Does having a savings account make you a “loser”?
While having a savings account doesn’t give you much when it comes to interest, there are some factors that make it important. But is it better than investing? Read the content below to learn more.
Advertisement
Savings accounts equals security, but what about growing your money?
The author of Rich Dad, Poor Dad – Robert Kiyosaki – is very blunt when it comes to leaving your money in the bank. One of the many slogans of the outspoken writer is indeed “savers are losers” when it comes to people who rely on a savings account.
Why? Because currently, inflation is at a 8% high. Even the best savings account in the market is paying a APY of 3% max. So what does that mean? It means that keeping your money in the bank will accrue very little interest, while the cost of living keeps soaring.
Most people think that “save” and “invest” mean the same thing. However, when Kiyosaki talks about savers, he means the people who leave their money in a savings account, not those who invest it.
While a savings account might provide an APY of a few percent at most, investing your money on the stock market can generate much better and higher returns. The only problem is that there are no guarantees when it comes to investing. Meaning there is a lot of volatility involved.
In a recent tweet, Kiyosaki reiterated his statement saying that 25 years ago he already considered savers to be lovers in his Rich Dad, Poor Dad book. Today, with the U.S. debt being in the 100s of trillions, that sentiment remains.
He then said that the real inflation is 16%, not 7% as announced. He believes the Federal Reserve’s rate hikes will destroy the country’s economy. And that people who keep their money in a savings account will end up on the losing end. Finally, he advises people to invest in things like gold, silver and bitcoin.
Should you have a savings account?
Robert Kiyosaki is not wrong to highlight the disproportion between the interest in a savings account and the current rate of inflation. He’s also not wrong in pointing out how investing in different assets can beat inflation rates over time.
However, even if the interest on a savings account doesn’t keep up with the COL, it’s useful to have dollars saved. The trick is to keep a certain amount of money in a savings account and invest the rest in assets and commodities.
There is no way of knowing what will happen to the economy in the next couple of years. So that uncertainty is enough of a good reason to keep some money in a savings account. Financial experts also advise creating an emergency fund with three to six months of living expenses.
Others say it’s essential to build up a savings account with a year’s worth of living expenses in case a recession hits the country. The idea behind it is to have enough cash on hand to keep you afloat in case you face some financial crisis or end up losing your job.
While cash may not go as far as it used to in the past, you still need it to pay for utilities and keep a roof over your head. Investing is a good idea, but you can’t pay your landlord or your credit card company using gold or cryptocurrency.
Another crucial point of having money in a savings account is that it is FDIC insured. Meaning that if the bank goes under, you still have coverage up to $250,000.
You will be redirected to another website
By submitting this form, I agree that I am 18+ years old and I agree to the Privacy Policy and Terms and Conditions. I also provide my signature giving express consent to receive marketing communications via automated emails, SMS or MMS text messages and other forms of communication regarding financial products such as credit card and loans. Message frequency varies and represents our good faith effort to reach you regarding your inquiry. Message and data rates may apply. Text HELP for help or text STOP to cancel. I understand that my consent to receive communications is not a condition of purchase and I may revoke my consent at any time.
Tips to succeed as an investor
If you have enough money in your savings account to last you a comfortable six months at least, maybe you should look into investing the rest. To help you get started, follow the link below and learn a few tips on how you can succeed in that field. With organization and a neat routine, you’ll get the hang of it in no time.
A daily routine as an investor: tips to succeed!
Don’t be a rookie investor. Get organized and achieve success with these amazing tips!
Trending Topics
MoneyKey Review: Your Financial Solution!
Explore the pros and cons of MoneyKey in this in-depth review, covering everything from online application processes to repayment terms.
Keep ReadingWhat is Tubi? Is it really free?
Tubi had many Super Bowl viewers fooled on Sunday with a commercial to promote their services. Here’s what we know about the platform.
Keep ReadingTSA PreCheck vs. Global Entry: Which Is Better?
Wondering which is better, TSA PreCheck or Global Entry? In this blog post, we explore the benefits of each program.
Keep ReadingYou may also like
Who are the most powerful DC characters?
In this blog post, we'll look at the top ten most powerful DC characters and determine who reigns supreme.
Keep ReadingSee how to apply for Barnes & Noble Mastercard®
Check out how to apply for the Barnes & Noble Mastercard® and get good benefits at the largest bookstore on the internet at a $0 annual fee.
Keep ReadingInk Business Premier℠ Credit Card review: Maximize Business Expenses and Rewards!
Find out if the Ink Business Premier℠ Credit Card is right for you with this review. Get a breakdown of all the features and benefits
Keep Reading