Verlen Villanueva
It’s the 20th century. Yes, it is true that savings will get you far but the question is how far? One analogy is like a person having a stockpile of food good for a year but when unexpected things happen the savings that are worth one year is burned through a month or two leaving a person desperate and in ruined financial state.
Then one will conclude the amount saved is not enough for such crisis. But here’s a question, is the amount of money saved not enough or is one not doing enough saving? Savihng money under a mattress or on a vault will not accumulate interest, worse it will depreciate in value due to market inflation month on month. A wise decision is to put your savings in a bank for it to incur interest and increase its value. However, this does not mean that it will beat inflation, since bank interest rates unfortunately are lower than the inflation rate. But still, it’s way better than money accumulating dusts under your bed.
What is inflation? Inflation is the increase of price of commodities in the market (e.g. bread, rice, gasoline etc.). Fund professionals will advise you to invest your savings on stocks, mutual funds or variable insurance since these are inflation-proof. However, these methods although very promising carry its risk since you have less control on how your money is being utilized to grow its value. Putting this into perspective, when you invest your money in the stock market you depend entirely on the the company’s performance in a fast moving market. So make sure you put your money on the strongest player out there.
Don’t get me wrong, investing on such financial assets are good. It’s just a matter of good decision-making and a huge amount of luck – because if the market goes down, your money with it, turns out your money under the bed may be worth more after all. This you can agree with if you don’t want to take the risk of putting your money out there in the game where the stakes are high.
The article does not mean to scare people from investing but encourages them to learn first about finance especially on things that they want to venture in. At the end of the day, it is not all about how much you save but how much of your savings can work for you (such as with a passive income). Better yet, first invest in knowledge, read books, attend seminars. Learn the ways of managing a business or how to invest your money on stocks and other financial instruments.
The choices are endless. Investing on a person’s education is the best investment of all. As an entrepreneur, all the things learned on the process is precious and will help in actively making money than just waiting.
