In 2020, 3 Million nairas was around $8000 then five years later the same 3 million nairas is around $2900 that is because the economy was run by wicked people and also inflation. What people don’t realize is keeping your money in the bank is not good no matter the interest rate they are giving you, they can be giving you a good interest rate ranging from 7 to 10% but in reality, inflation every year is around 30% and that is why most people don’t save their money in the bank. When we look at the data should we not conclude that saving money in the bank is a bad idea?
Saving money in general is not bad but perceiving money just to gain 5% or 10% interest from the bank is not good either because not only that your bank using your money to make more money, but Inflation is also reducing the value of your money each year, which makes saving money in the bank a bad idea. The reality is that saving money is not a bad idea just that when you are saving money you should make sure you are saving for a purpose. The number one thing you must do is inculcate the habit of savings because the habit of savings will teach you many things and it is a skill that habits of saving will teach you how to weigh and let your money grow.
Savings is not an investment
As you are saving and learning how to wait to let your money grow, you must have what you want to use the money you are saving to do a good example is investing your money, this is when you put your money into work Another example is buying real estate, We have so many examples. Saving money is not an investment and this is where most people get it wrong. Most people believe that saving money is an investment but is a lie. There’s nothing bad in having money saved that you can’t use to feed yourself for at least six months apart from that the remaining money should be put into an investment.
For you to start growing financially, the first thing you must learn is how to save. It is very important without learning the skills of saving you will find it difficult to grow financially. It is always better to learn skills of saving and after saving for a while, put the money into good use, but saving alone will not save you. You can know how to save your money but still struggle financially because you must also consider your decision-making and not see saving as an investment. Savings alone will not make you financially free, but it is the right step to begin with.
Don't be scared
There are indeed so many risks involved in you trying to invest your money and people hate risking their hard-earned money. That is why they choose something safe like saving their money. It’s also a bad idea just because of inflation and if you are unlucky, you might also experience a bad economy such as the one going on in Nigeria. Leaving your money in the bank or somewhere else is also risky. That is why it is best to do your research and invest your money into things that you are sure of.
Doing nothing is risky, and doing something is also risky, but it is always better to go for a risk that comes with a reward. Saving your money in the bank is risky and it comes with little or no reward but investing your money too is risky but it comes with a greater reward. That is why it is important to choose wisely and do what is best for us.
Thanks for your time.