If you have to stash some money away, more than likely you’ll hide the funds in a savings account. The purpose of a savings account is to park your hard earned money aside for an emergency, a car, vacation trip, or a huge purchase. Fact is, a savings account that pays close to nothing in interest is just as useless as putting cash in a shoe box. You must acquire self discipline.
SAVE TO INVEST
Let’s be honest, how much do you really make on a savings account besides a penny a month? The average interest rate on a savings account is 0.05%. So let’s say Dwyane has $5,000 to deposit in a savings account. With a 0.05% interest rate he’ll earn $0.21 after one month while the bank turns around to make huge profits. Learn and play the game. The stock market is a great tool that can earn you more interest than a savings account ever will. Many are terrified to lose money in a risky stock market but the rewards can impact your life. For beginners, learn how to invest in Index Funds, Dividends, Trading Options, and buying stocks for long term. SAVE TO INVEST. THEN INVEST TO OWN. OWNERSHIP LEADS TO WEALTH.
Inflation
That money you’re keeping in the savings account is worth nothing and the value of it is currently decreasing. President Nixon made sure of it in 1971 as he announced the paper dollar will no longer be backed by Gold. You’re dollar has devalued. The economic term for inflation is an increase in prices and a decline in the value of money. Here’s a perfect example, today $100 worth of groceries isn’t much for a family of four and wouldn’t last a day. Decades ago, one hundred dollars worth of groceries would last a month or more. If everyone is making $15 an hour then prices on services and goods would cost an arm and a leg. Keep saving and you’ll lose purchasing power.
13 YEAR OLD MAKES $78,000
This type of investing can bring you gains within seconds but proceed with caution because the faster you gain the quicker you can lose it all. I’ll keep it simple for now but it’s called Trading Options. It’s how a 13 year old kid made $78,000 with a $2,200 investment to Tesla. An option is a contract which gives the buyer the right to buy or sell an asset at a specific price on or before a expiration date. In other words, you buy 100 shares of a stock at a discounted price. You’re predicting that the stock will increase or decrease. Even a 5th grader can do it and with more research the easier it gets.
MONEY IS A TOOL
Rather trading your precious time for money, it’s time we put our own money to work. Take some of your income and either invest in the stock market or invest to start a side hustle. For my less risky investors dividend investing is probably the safest option. Dividends are a special bonus from the company to it’s shareholders (YOU) as a thank you for owning a stock. I’ll show you, let’s use that $5,000 as a tool to make us some more income. We are going to buy shares of Simon Property Group and earn $5.20 per share annually. The current stock price is $63 (still rising) and we’re going to use most of the $5,000 to buy 79 shares($4,977). The Simon Group Company will give you an annual bonus dividend payment of $414.75 a year. Dividend investing is a reliable investment.
BUY BACK YOUR TIME
Live like today is your last, but invest like you’ll live forever.
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