Better to Invest in Stocks than Keeping Money in the Bank
For those interested individual who wants to invest in stocks, but have no clue. Read this investing tips. A reader of InvestmentTotal.com asked a question via email, he asked if it better to invest in stocks than keeping money in the bank. We all know that we should not just saving and investing money. We should save and invest with a clear goal and purpose.
If you think saving money can help you achieve your financial goal, then go for just saving money in the bank. But, it’s rare that we achieve our financial goal by just saving especially if we want to double our investment capital.
In the stock market, mutual funds and even buying real estate properties, our money will easily doubled and generate more profits for us. If you invest in stocks, you take extra risks but that risks will give you better return compare to safe investment like “savings”.
All over the internet, we read investing tips and some blogs are recommending stock market investing. We don’t blame other experts because they have proved that stock investing is very profitable especially if an investor do invest using dollar cost averaging.
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Is it Better to Invest in Stocks than Keeping Money in the Bank
Here is the final answer, why we prefer to invest in stocks than just saving money in the bank. Saving money is what most people do prefer. They are afraid to take extra risks.
The reasons why it is better to invest in stocks than keeping money in the bank is that we can;
- Beat inflation
- Accumulate money faster
- Achieve our financial goal easily
- Become a stockholder of a certain companies
Although keeping money in the bank is a safe way to invest, it is not recommended because your money will just sleep there. That statement has exception. Through asset allocation, it is still needed to have savings at all. Imagine if you put all your money in a high risks types of investments and there is a sudden market changes what would happen to your investment?
Image Credit: Naterally Wicious via Flickr CC 2.0When Saving Money in the Bank is Needed?
Saving money in the bank is still needed for the sake of asset allocation. Find out how to distribute your assets according to your age here.
Take note that people are always keeping their money in the bank and not investing in stocks is because they want to easily convert their money into a real cash. The liquidity of their assets is more important to them than the profits the can potentially make.
If you are saving money, do make sure that your savings are earning its maximum potential. Don’t just save using regular savings account, you can choose certificate of deposits or other savings that earns extra interests. But do not forget to invest in stocks or other high risks types of investments for the maximum growth of your money.