When you save money you normally put your money in the bank and in return the bank pays you interest. The longer you keep your money there and the higher the interest rate the faster your money will grow. A savings account is a very safe place to keep your money. There is no risk involved.
With a savings account the problem is that the interest rate is so low, the highest rate I could find today is about 1.50%. With this interest rate your money won’t grow fast.
There are better ways to make your money grow faster. Investing in stocks is one of them. Your average return on investment could be easily around 12%. When you invest in stocks:
- You will own part of the company you invested in, unlike with a savings account ;
- You participate in the growth of the company, with a fast growing company your money can grow much faster than in a savings account;
- With investment there is always risk involved unlike with a savings account. Your money can grow but there is also a chance that you lose some money;
If you learn the basics about investment you will dramatically decrease the risk. For most people investing is not a way to get rich quick but to make your money grow over a long period of time.
No comments:
Post a Comment