Saving money and getting nothing in return: Does this make any sense?
Saving money is one of the two "wings" of building wealth. The other is investing.
Saving happens as result of not spending everything you earn (income, investment earnings, etc.) So, in effect, saving money results from some sort of sacrifice or delayed gratification on your part.
If you put your savings into a savings account in a bank, or even a money market mutual fund, you've probably noticed that you're getting almost no return on your money. That's frustrating. Isn't there some better place to put your savings where you can earn a decent return?
Be careful here. You could be trolling in dangerous waters. It's called "reaching for return." That's where short-term interest rates are so low that people are tempted to take risk with their safe, liquid money - money that's intended to be available to pay for things like college tuitions due in a year or two or old, leaky roofs that have to be replaced.
If you had the discipline to sacrifice, to delay gratification, and actually save some money, you don't want to turn around and lose it, right? So don't blow it now. I know how frustrating it is to watch that money just kind of "sitting" there. But when there's no reasonably safe alternative, the best thing to do is just let it sit.
I'll tell you about how even supposedly sophisticated investors can lose their shirts reaching for return in a coming post...
Saving happens as result of not spending everything you earn (income, investment earnings, etc.) So, in effect, saving money results from some sort of sacrifice or delayed gratification on your part.
If you put your savings into a savings account in a bank, or even a money market mutual fund, you've probably noticed that you're getting almost no return on your money. That's frustrating. Isn't there some better place to put your savings where you can earn a decent return?
Be careful here. You could be trolling in dangerous waters. It's called "reaching for return." That's where short-term interest rates are so low that people are tempted to take risk with their safe, liquid money - money that's intended to be available to pay for things like college tuitions due in a year or two or old, leaky roofs that have to be replaced.
If you had the discipline to sacrifice, to delay gratification, and actually save some money, you don't want to turn around and lose it, right? So don't blow it now. I know how frustrating it is to watch that money just kind of "sitting" there. But when there's no reasonably safe alternative, the best thing to do is just let it sit.
I'll tell you about how even supposedly sophisticated investors can lose their shirts reaching for return in a coming post...
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