One thought on “Why should you invest your savings?”

  1. Mike Finley says:

    You invest your savings to stay ahead of inflation. Without properly investing, your savings (in the bank or credit union) will end up being eaten up by the inflation monster. A dollar today will be worth 96 cents next year and if you earn 1 cent that still shows a loss of 3 cents. The compounding effect of that scenario can be devastating to a person’s financial future.

    This is why we must invest and that means taking risk in the stock and bond markets. Stocks specifically have produced a return over time around 7% above the inflation rate, which means your 1 in the future will be worth more even after inflation with that compounding effect in your favor now instead of working against you.

    Focus on investing wisely and at a low cost when implementing this basic idea. That means you own no-load index mutual funds that own entire markets all over the world at the lowest possible cost. A good start would be the Total Stock Market Index Fund at Vanguard or something similar within a 401(k) plan. Financial freedom to follow!

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