Why is investing better than saving?
orion7 (66) in hive-167922 • 3 hours ago
We normally come across this question quite often. Savings rates hardly yield anything. So little in fact that people sometimes have to pay more to the bank and use their bills than they are thanked for their savings.
A simple calculation shows that an investment with a minimum return yields even more than an average savings account at an interest rate of 0.30%.
Savings account
€ 1,000 yields 0.30% interest in a year, which equates to € 3.
It is of course possible that savings rates will start to pick up again. But then you still don't have it in your own hands. You remain dependent on the success of the bank, which then rewards you for your savings. By investing you take control out of the hands of the bank and you decide on your assets. Many people like that idea alone.
Low return
With a low return you can get up to 5% profit on your investment, while the risk remains low. De Telegraaf also calls this boring investment .
Suppose you maintain an average return of 2.5% (and the risks are therefore very limited). Then you can save around € 25 from € 1,000. That is a lot more than what savings interest means to you!
High efficiency
There are of course also plenty of options for investing at a high return. The return can then rise to 10%, 15% or even more.
At € 1,000 that is easily € 100 to 5 150 profit.
With a high return you can earn a lot of money in a short time. But when there is a high return, there is often also a high risk. Very simple, because otherwise everyone would get in and see their money grow.
You must therefore be aware that if you want to earn a lot of money in one go, you will also have to take the necessary risks. And often it doesn't end well with such investments. High returns are for experienced investors, who know the ins and outs of the stock market and can somewhat predict where it is going (although no one can ever do that at all).
Especially as a beginner, we advise you not to invest too quickly with a high return. Learning to invest will also take the necessary time from you.
Investing is better than saving, because the money invested creates new value (goods and services). Saving money under the pillow or hodling it on a crypto currency wallet does not create new value.
When you save on a bank's savings account, the bank invests your money and also collects the profit.
I want to decide for myself where my money goes, so I invest a little in your post.