Saving vs Investing (in The Right Assets)

This topic is highly discussable in today's families, behind the closed doors they are asking themselves a question, what is the best savings account? While they don't even know that they are asking themselves the wrong question and that saving money on its own is an old and outdated idea that just keeps being passed on from generation to generation. You probably know that in 1971 U.S. President Richard Nixon in response to increasing inflation which at that time was 5.84%, canceled the direct international convertibility of the United States Dollar to gold. Meaning that before the event took place, the paper currency had value, because it was backed by gold sitting in Federal Reserves since after 1971 Nixon exited the Bretton Woods system, the currency became freely floating and since that day it became to go down in value and losing it's purchasing power.

By 1966, non-US central banks held $14 billion, while the United States had only $13.2 billion in the gold reserve. Of those reserves, only $3.2 billion was able to cover foreign holdings as the rest was covering domestic holdings.

Since these events took place, more and more people who are in the middle or lower-middle-class are really struggling to save money, because of inflation jumping to 1.6 percent in December, up from 1.2 percent in November, as measured by the Consumer Prices Index, so more and more people just don't see the point of putting money on side, because over long periods of time if get's "eaten" by inflation and fast increasing expenses, like food, housing, gas, electricity and so on. Also to save money in the bank doesn't make sense either, for instance, The Bank of England base rate fell to 0.25 percent in August last year, after more than seven years at the then-record low of 0.5 percent. So let's say if you will put 10,000 euros in one of the best savings accounts, after one year you will earn a whopping 3 euros, come on, you can't even buy a good cup of coffee for that price. Imagine the following, figures show that four in ten working-age people have less than 100 euros saved to cover them in an emergency. So how can someone be prepared for ups and downs in economic cycles when they don't have excess money to fight with it.

That's why a person has to start looking at some other options, like investing (not in the stock markets or bitcoin) but in real, physical assets, but you may say, "how I am going to invest if I don't have money", you won't, but you need to be creative into finding someone who has it, parents, grandparents, colleagues and friends may have a bunch of money sitting in the banks that don't earn them any money. There are great deals available in any given market at any time. You need to start thinking in new ways, to make sure that your money is really working for you in the sure investment, not just sitting in the bank. Because money get's bored if it sits in one place and it gets to spend. So start building new money habits and strategies that work in the new age and stop using the extinct ideas of "saving money"