Most people have learned the benefits of setting money aside for unexpected expenses. Want to hear something absurd, though? The majority of deposits today result in losses.
But, surprisingly, even with these losses, people still insist on saving money for future use.
How is that possible? The reality is that your money will actually be WORTH LESS in the future than it is now. This is if interest rates, which the bank pays you in exchange for deposits, are lower than inflation. Saving money is still how we accumulate funds for significant life events like weddings, a first home, or a family emergency. This doesn’t mean saving is bad. And it is obvious without saying that depositing money in a bank is much safer than hiding it under a mattress.
It is also noteworthy that current accounts in Nigeria accrue no interest irrespective of the tenor the money is kept.
Your money in a bank account can only yield 3% per annum. Instead of keeping your funds in a savings account with a commercial bank, here are 3 ways to use your money well.
OPEN A FIXED DEPOSITT:
The majority of people don’t know about fixed deposit accounts. Investment deposit accounts are different from savings and current accounts because they are investment accounts. By investing your money at an agreed rate within a specified period of time, you’re reinvesting your money at a fixed rate. Depending on the institution, accrued interest rates may differ.
Fixed deposit accounts are attractive because they provide a guaranteed return on your investment, as long as you leave your money in the account for the entire duration of the fixed period. This means that you can be sure that your money will be safe and that you will make a profit at the end of the period.
In certain conditions, you can terminate your tour account before the due date, known as tenor.
CONSIDER INVESTING IN BUSINESS OR START –UPS
You can utilize your capital in running a side business, or work streams that bring passive income. You can take part in a start-up if you have enough capital. With this you have the opportunity to invest in high growth companies for the future.
This can be a great way to increase your income without having to put in the same amount of time as a full-time job. And, if you are investing in start-ups, you can potentially get a great return on your investment and benefit from the growth of the company.
INVEST IN STOCKS AND BONDS
Diversify your portfolio in your investment journey. Having all your money in one investment increases risk. If that single investment fails, all your money could be lost. Investment is a long term strategy for building wealth The most successful investor invests early, then allows the money to grow for many years before using it. Invest in diverse forms, and you will know what to do next.
Diversification helps to spread out the risk of your investments. By investing in a variety of different assets, you can mitigate the risk of any single investment failing drastically. This allows you to create a more stable portfolio that can handle market fluctuations over time, while still allowing you to benefit from the growth of your investments.
No matter what you are saving or investing in, have a specific set of goals. Know what you are working towards, as this will focus your spending and motivate you.
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