Have you ever thought about investing your money, but are not sure whether to put it in the bank or invest it in some business or company?
There is a big difference. Keep in mind that with one of these options your money will stagnate, and with the other it can grow significantly. Here at D3sconocidos we will explain what sets them apart.
Investing time in building your financial knowledge.
One of the basic pieces of advice for any investor is not to invest in what you do not know or understand. So isn’t investing time in learning about your money a great idea? Or what is the point they are actually making?
The more you know about investment tools, the more capacity you will have to get the most out of your investments. While you do not need to be a finance expert to invest in the stock market, it is important that you understand what financial executives and advisors at financial institutions are talking about. This will allow you to actively participate in decisions about what to do with your money and how to get higher returns.
The most traditional and direct way to invest in the stock market is through funds that let you benefit from saving in market-traded instruments. Remember that based on your investor profile and the knowledge you acquire, it is advisable to diversify your investment.
Investing can be a great plan if you start by buying or investing in stocks, since you will be dealing directly with companies.
- Keeping your money in the bank
The only advantage of this is inflation, since over time your money can grow by approximately 2.25% for the period it remains in the bank. You might become a millionaire eventually — if you are still alive — or you might create a wealthy generation. But this is speculative, since the bank itself can hold funds, lose your account records, or the market can crash and your savings can plummet. This happened in Mexico in the 1980s to 1990s, when the country used currency in thousands — what we know today as 1 peso was 1,000 pesos, 500 pesos was 500,000 pesos, and so on. When the stock market crash hit — a so-called “improvement” for the Mexican economy but total chaos for citizens — people who had over 6 trillion pesos in the bank (wealthy individuals at the time) saw their accounts drop to 60,000 pesos in a matter of hours.
Knowing this, what do you prefer now? Invest your money or keep it in the bank?