Money is an object we as adults work hard for. It is a medium wherein we use to exchange for something that adds value to our life. Every people have different definition of what money is and what it is for – positive or negative or both. This allows us to have things that answer your basic needs and wants. The more money you have, the more you become comfortable mentally simply because you are assured that for the coming days your basic needs would be provided for. It really makes the world go round.
All our lives, rich or poor, educated or not, we work just to earn money. Poor people, as early as they can think, they are trained to make money in whatever way possible – begging, collecting and selling garbage, and sometimes committing crimes. For us educated people, we were trained for 16 years more or less from nursery to college also to make money. We specialize on a certain field which will turn out to be our career that would provide us high paying salaries or business earnings. At the end of our formal educating years, what do we do next? Yes, make money. Everyone does, except of course kids who don’t want to work because they have filthy rich parents.
Once we start earning money, we take care of our basic personal needs. Then when our salaries will eventually be bigger than our basic needs we now can afford things beyond our basic needs – shopping, travel, etc. But there will be a time, either right away or later, when you would realize that this wouldn’t go on forever. Thus, we start saving money for our future.
Before, saving money is very simple. Keep it in a safe place in your house which would make it very vulnerable or keep it in a bank. This traditional way of saving is still being used right now. Banks certainly bring a lot of convenience to us. Deposit in your account, and the bank would be the one to protect it. Need money? Withdraw using ATM or through the bank teller. This makes us love banks even more. But will your money ever grow with them? I don’t think so.
Savings account earns 1% minus tax. Time deposit earns you 3-5% minus tax depending on the amount of deposit. Our inflation rate sometimes reaches to 5%. TRANSLATION: Your money isn’t earning well in the bank or sometimes the value even depreciates. Not everybody understands this, but you should! Your hard earned money depreciates in value over time in the bank. What if 10 years or so of saving you still haven’t found an investment vehicle? Then your money just depreciated before your eyes.
Are there any other savings tools aside from banks? My answer could create different reactions: LIFE INSURANCE. How? Through investment linked products of Life Insurance. Yup Life Insurance today isn’t just about claiming a lump sum amount when somebody dies. You can use it as a savings tool that earns 6% or more.
This savings tool is a bargain because it gives you life insurance coverage for free. The moment you open an account, not only did you simply open an account, you also are covered immediately. How’s great is that for a savings account? And just like the bank, you can withdraw and deposit.
That right there is an alternative when it comes to savings. But I am not saying that you empty your bank account and move it to insurance companies. Your bank account should be for immediate cash need purposes and Life Insurance for long term savings purposes because it out grows inflation rate and earns way bigger than banks.
So my question to you is, do you just let your hard earned money depreciate like that in banks? Or do you let it grow for savings purposes until you have come up with an idea where to invest it? What’s your pick? - DE
P.S.
Do you have a better savings tool? Comment here or contact me! Should you want to know more about investment linked products of life insurance, you watch out for my coming blog about that it. It would be a simple explanation of what it is. But if you want to know about it in full details, you can contact me through email first. Cheers!
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