The Right Way to Save to Increase Your Wealth

How to Save the Right Way to Increase Wealth

     Saving is a goal for many people, some want to save for retirement, others plan to use the funds to fly to a dream vacation spot.

Yet, over 70% of Americans have less than $1,000 in their savings account. According to Bankrate, 40% of Americans say that it is difficult to save because the cost of living is so high.

Saving at the Bank does not Make You Rich

If you think that saving money in the Bank is your way to achieve wealth, then you are wrong.

This is why most Americans never get rich again, while those who are already rich who own assets just keep getting richer.

Steve Roth, an investment expert crunching government data and found that with savings in households, whatever income is left over after their expenses, it does little to increase wealth.

Why if saving alone won't improve your financial life?

The depreciation of the value of money in everyday life cannot be separated from the history of how America changed the standard of value for money that it adheres to.

In 1971 the President of America, Richard Nixon decided that America was coming out of the use of gold standard. America will adopt a floating currency system, which bases the value of its currency on the value of credit and public trust.

Since then, the value of money is no longer stable, because it is guaranteed by any commodity. The fluctuation of the value of money is determined by market conditions and the stability of a country's credit score. This condition does not only affect America.

Due to the position of the US dollar as an international currency, automatically all countries also follow a floating currency system.

Currently the value of the currency of each country fluctuates up and down in accordance with the inflation rate, the situation and market confidence.

A certain amount of money that can meet your current needs may not necessarily be able to buy the same thing in the next few years.

With the rise in goods or inflation every year, the road to getting rich in the future becomes more difficult.

If you only rely on saving, of course you won't be able to catch up with inflation, which is faster than interest on savings. So even getting rich will be hampered because the money you have now will not be enough to meet future needs.

Money is now hostile to time. The longer you save, the amount of your savings will indeed increase, but the value of the savings itself may actually increase and decrease.

Way to Save to Get Rich

There are several ways to save the right, that let you build wealth and beat inflation.

Investments can beat inflation, and keep the value of your money. In fact, it doesn't just beat inflation, investment returns have the potential to provide greater asset growth, thus giving you profits.

The world's richest people, such as Warren Buffet and Bernard Arnault, made their fortunes by investing. Here's how to save money to get rich:

Saving Stocks

Saving in stocks is still not very common for people of the world. Whereas to save stocks, the method is so easy. It's the same as we save conventionally.

Ways to save stocks:

You come to the banks of your choice, and open an ordinary account. Then all you have to do is open an investment account by creating an investor identification (SID) account with a securities company, broker, or stock trading broker.

Funds stored in a bank account will later be deducted automatically (autodebit) to buy shares or mutual fund products that are approved by investors.

The value can be adjusted to your abilities and needs.

After the nominal amount has been determined, you can deposit the funds in the stock account regularly every period. The customer is free to choose the shares to be purchased, as long as it is in accordance with the amount of deposit per month.

In contrast to conventional savings which are subject to inflation, the money saved in shares depends on the productivity of the company that owns the shares. The better the long-term development of the business, the better the results.

In addition, one day you will get a profit in the form of a capital gain (the difference between the purchase price and the selling price of the shares). Not to mention the dividends you will receive if the company makes a profit. But you need to know, that stock investment also has the risk of loss, if the stock price declines.

Gold Savings

One of the factors why you need to save in the form of gold is because the price of gold always rises from year to year.

The advantage of gold is its resistance to inflation, and when you need large amounts of cash, gold can be cashed out easily and quickly.