You Can Get A Life-Time Value For Your Money
Imagine a child who doesn’t know what money is. To him, it’s just a piece of paper that can be torn into shreds. But as he grows older and begins to understand the value of money, his perspective changes. Suddenly, he realizes that money can buy him the things he wants – toys, candy, and even a trip to an excursion.
The more he learns about money, the more he craves it. He starts saving his allowance, dreaming of everything he can buy. And when he finally has enough money to make his first purchase, he feels a sense of pride and accomplishment. From that moment on, he knows that money is not just a piece of paper – it’s a tool that can help him achieve his dreams. And he will never tear it into pieces again because he understands the power of money and the opportunities it can bring.
The Value It Affords
Therefore, apart from being a medium of exchange, possession of money can give and boost confidence, as described in the experience of the boy above. I remember some years back, a boy in my neighbourhood would not part with his money to buy a new phone because he thought buying his desired new phone would render him penniless. He said hanging out with friends with an empty pocket makes him feel inferior. That was a 17-year-old boy.
If a teenager could feel that way, I don’t need further ado to convince you that a typical adult feels more inferior and even insecure when the pocket is empty. This assertion is to validate the fact that one of the reasons some people feel worthwhile is because of their fart account in the bank. As a result, some people feel insecure and less important when they do not have money.
In other words, everybody always wants money in their pocket. We all want the benefits that money can fetch us, but we don’t want it out of us. However, eating our cake and still having it is impossible. So we either keep the money with us (in the bank) without the benefits or values it affords or get the value and let go of it.
The Good Way
Yes, keeping the money in the bank is good, and one of the advantages, among many others, as we all know, is that it will fetch us some interest. However, while keeping money in the bank has some advantages, there are also some disadvantages. One main disadvantage is that banks’ interest rates are often lower than the inflation rate. This means that the value of your money may decrease over time, as the interest earned may not keep up with the rising cost of goods and services.
Additionally, banks may charge fees for various services, such as account maintenance or ATM withdrawals, which can eat into your savings. Another disadvantage is that banks are not immune to economic downturns or financial crises, which can put your money at risk. In the event of a bank failure, your deposits may not be fully insured, leaving you with a loss. Therefore, weighing the pros and cons of keeping money in the bank is vital as considering other investment options that may offer higher returns and lower risks.
The Better Way
What about keeping your money through investment? One of the main advantages is the potential for higher returns compared to keeping your money in a bank account. Investing in stocks, bonds, mutual funds, or other assets allows you to earn a higher rate of return over the long term. Moreover, investing can help you beat inflation and grow your wealth over time.
Another advantage is diversifying your portfolio and spreading your risk across different assets. This can help you minimise the impact of market volatility and reduce the risk of losing all your money in a single investment.
Furthermore, investing can provide you with tax benefits, such as deductions for contributions to retirement accounts or capital gains tax rates that are lower than ordinary income tax rates. Investing can be a powerful tool for building wealth and achieving your financial goals. However, it is essential to do your research and seek professional advice to make informed investment decisions.
While investing can offer many advantages, there are also some disadvantages to consider. One of the main disadvantages is the risk of losing money. Investments are subject to market volatility and can fluctuate in value, meaning you may lose some or all of your money. In addition, some investments, such as stocks or cryptocurrencies, may be riskier than others, which can be highly unpredictable and subject to sudden price swings.
Another disadvantage is the potential for high fees and expenses associated with investing, such as brokerage fees, management fees, and transaction costs. These fees can eat into your returns and reduce the overall value of your investment.
Moreover, investing requires a certain level of knowledge and expertise that not everyone possesses. Without proper research and due diligence, you may make poor investment decisions that can lead to losses. Therefore, it is crucial to consider the risks and benefits of investing carefully and seek professional advice before making investment decisions.
The Best Way
If keeping your money in the bank is not good enough and investment is not the most perfect way to save your money. What, then, is the best way to keep your money with you permanently? Ben Franklin once said, “If a man empties his purse into his head, no one can take it from him.”
In other words, keeping your money in the bank is a wise decision though not good enough and investing your money is wiser though not the most perfect way to keep your cash with you for life. However, buying knowledge and investing in yourself keep the cash with you as long as you live; it lives on when you pass it to the next generation.
Conclusion
In conclusion, it is good to keep your money in the bank, and it is better to invest it, but the best way to save your money permanently with you is first to buy knowledge of it and keep acquiring knowledge for a better version of yourself. The knowledge you gain will teach you how to get the best value for your money and keep it with you for life.
