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Savers are Losers

Savers are Losers

Oopps…I know lots of you will disagree on me. But let me tell you my point.

Savers are losers. Yes, it is true, but I am referring to those people saving in the bank, on their vault or in their piggy bank.

Come to think of it. If you save 100 pesos in the bank, they will probably give you 1% interest per annum. So your 100 pesos will be 101 pesos at the end of one year. Is that big enough for you?

However, inflation rate in the Philippines is around 4% to 5% annually. For those who are not familiar, inflation an economics term, refers to the rise in the general level of goods and services in an economy over a period of time.

Let’s say after a year you invested 100 pesos in the bank, inflation rate is 5%. It means, that your 100 pesos in the bank today actually lose value and only around 95 pesos on current value one year after. Yes, our peso keeps on losing value as years pass by. I still remember when I was in elementary, jeepney fare back then only cost 50 cents. That was more than 20 years ago. Now, minimum fare is around 8 pesos already.

This is what I am trying to say. You savings in the bank is losing value as years pass by.

In assets and liabilities column, your bank deposit is actually end up a liability. However, it is an asset to the bank as they can earn money using it. Banks are good at it, and they know asset and liabilities well. All the money deposited in their bank, they just invest it for a higher return. What is 1% of your interest rate if they can earn unlimited amount of percentage if they invest it?

So, if you really want to invest in bank (in getting the bank richer), look for a bank that offers higher interest rate than the current inflation rate. That is the only way you can get positive results from your bank savings. Otherwise, you are really a loser.

Is there such a bank that guarantees more than 5% of interest rate? If there is, BEWARE. They will go bankrupt as soon as possible. It definitely doesn’t exist yet.

Are we on the same side now?

What is the alternative from bank savings? INVEST IT.

P.S. A year ago, I do not know anything about investment. Then I joined Truly Rich Club by Bo Sanchez. It was the best decision I ever made in my life. Brother Bo is a spiritual preacher and at the same time, financial literacy advocate whose purpose is to help people become rich in order to serve the LORD with the money that they have. He guided me along the way, explaining how I can manage my money and make it work hard for me. Now I’m investing in stocks and mutual funds and have a clear path for my future. Soon I’ll open UITF account as well. All are made possible by his guidance and teachings on every steps to become an investor. Being OFW isn’t forever, this is my EXIT PLAN. It’s amazing how his teachings change my life. I’m inviting you to join the club too, JOIN TRULY RICH CLUB. If you have any question, feel free to leave your comment below. CLICK HERE TO JOIN

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

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