This is what I call "Money Stand"
How much is your monthly salary, and how much money you set for savings per month?
That is the fundamental question to calculate modest investment for your future. But I think this calculation is more erroneous and relatively far from the target. Why?
OK, now suppose you could save minimum $ 100 per month for your future. Your imagination, in the next ten years you expect to have cash deposits of $ 100 x 12 months x 10 years = $ 12,000. But is it true that in next 10 years you will get that much money? My experience proves that the next 10 years the amount of money would not be that much. It could be smaller or even maybe you do not have savings. What is the cause?
This is the answer:
- Cash deposit of $ 12,000 is ideal savings for 10 years where you do not have a financial problem whatsoever. You does not sick that cost a lot, does not require any emergency or accidental money to help brothers and sisters, even you do not wish to purchase items for your life needs. If it can do, so you'll have that much money in 10 years to come. In fact it rarely happens. Over the next 10 years of your life, it is possible that you, your wife, or your child is sick and in need of fast medical expenses. Or during the next 10 years you need gadget to streamline your job mobility, ie buying the latest Blackberry. Where else you use money besides your savings? Definitely, you use it first. So in the next 10 years your savings is difficult to obtain the ideal value. It could be smaller or even maybe you do not have savings.
- Cash deposit of $ 12,000 is ideal savings for 10 years where the bank did not cut up your money at all. In fact there is bank administrative charge on your savings account, and administrative cost is likely to be higher than the interest of your saving. So it is difficult-if not to say impossible-to obtain the ideal funding in 10 years.
With the above facts, I believe that saving money in a bank is not an investment, but merely as a safe place so that your money is not stolen. And the money you deposit in the bank is money-what I call-"MONEY STAND". In other words, money stand is money you have that you can use quickly in case of emergencies. "Money Stand" is not an investment, but rather a means of life support. There is nothing wrong if you save money in a bank, I did too. But if you think that saving money in the bank is an investment, I think it is wrong.
And what about the save deposit? Is not it said to be an investment. Yes of course, if we are talking about save deposits, then it could be said to be an investment, although the interest you get from these deposits is slightly. But deposit is saving in the bank with large amount at once, and this time we are talking about saving money each month that the value is not large. Are there any banks that accept deposits at least $ 100? I guess not. So again I say saving money per month in the bank is a safe way for "MONEY STAND", not an investment. Oh, one more thing, if you have only "Money Stand" on your life, you will not reach what it called financial freedom. You should need a real investment.
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