I always wonder when people believe saving money in the bank Will give them financial freedom, remember the old saying, a penny saved is a penny earned? If it's true, it's certainly isn't true anymore. Today simply saving your money in a bank account is one of the suresest way to loose value. Here is why
(1) inflation will eat way your money. Today's interest rates on saving account and even Cds are generally below the rate of inflation
So every month,u are actually loosing value. The rich know this
(2) Taxes are higher on interest , even if you break even with inflation rate, you still loose. That's because the rate on interest income is higher than the tax rate on capital gain income.
(3) Investment pay higher returns--speaking of capital gain, that's where the biggest investment returns are when you invest in the ownership of something like real estate, the value of your investment usually rises faster than lnflation
(4) Investing let you use other peoples money to make money
The rich knows this secrets, so in other words the rich are using savers money in the bank to invest and multiple their money. Think about this.
