WHY SAVING IS FOR LOSERS

The banks will hate me for saying this but it's nothing personal.

No one knows tomorrow, so by all means put some money aside for EMERGENCIES.

However, if your goal is to grow this stash of cash at a decent clip over more than three months, then the worst thing you can do is stash your cash in a bank savings account.

Why?

Because of INFLATION.

Inflation is simply the general rise in the cost of goods and services from one period to another.

When you were thinking of saving you probably didn't even remotely think about inflation right?

Please do so from now on.

You see, when inflation is higher than the interest rate on your savings, what you're essentially doing is lending money to the bank at a cost to you. It costs you because inflation "devalues" your savings.

Think about that for a minute.

It's like you lend someone money (the equivalent of your savings) today at a very cheap rate (the interest rate on your savings). Then by the time they pay back all your money (the savings plus the interest you earned) the whole thing is now worth less than what you originally lent them.

That's how inflation turns savers into losers.

Rather than dump your money in a savings account, which just makes your bank richer at your expense, consider inflation-protected instruments like Treasury Inflation-Protected Securities (TIPS), inflation index-linked Bonds, Money Market accounts and Certificate of Deposits.

So here's the bottom line: ALWAYS CHECK THAT THE INTEREST RATE IS HIGHER THAN INFLATION BEFORE YOU PLUNGE YOUR MONEY INTO A SAVINGS ACCOUNT.

All that said, you should know that nothing beats the stockmarket for growing money, inflation-protected over the long-term. Not even real estate.