In today’s times, many people are looking for alternative ways to save their money. As inflation and debt levels continue to rise while wages remain stagnant, it is becoming increasingly difficult for people to cultivate savings.
In the book, “The Richest Man in Babylon,” Arkad was widely known for his great wealth. The story suggests that he had a working theory: “One part of everything you earn is yours. It should be no less than one-tenth, no matter how little you earn … pay yourself first.”
Unfortunately, most of society has deviated from this thinking.
The fact is that Canadians are not saving like they used to and collectively have record levels of debt. The average household savings rate in Canada has fallen from around 20 percent in the 1980s to 5.8 percent in the fourth quarter of 2016.[i] Many people believe that they cannot save because after paying “all their bills” there is not much left. However, understand that in most cases, if you are trying to save after paying all your bills, this strategy may prove useless. Instead, get in the habit of saving first or consider paying yourself first. Once you have developed this habit, you can search for which vehicle you want to store your cash in.
In general, when people DO consider saving often, when taking the traditional approach; Open a bank savings account and throw away as much cash as possible. Sit on it like a goose sits on its eggs and wait for your savings to hatch. However, the sad reality for most is to make a cash withdrawal in the future just so you can buy less with your savings because inflation has eaten you up. And you will always be on the losing end of a bank savings account because interest rates are no higher than inflation.
Another option that many consider is putting money in the stock market; However, the stock market should not be viewed as a savings vehicle because the stock market has had a history of collapse dating back to beyond 1929.[ii]
Look up the definition of saving in Webster’s dictionary and see “preservation from danger or destruction,” while the definition of investment says “to commit (money) to obtain a financial return.” Neither method is good or bad, but you need to understand which one you are trying to do.
Finally, during my research, I have found throughout history that when people lose faith in their national currency, the banking system that controls it, and their governments, many rush back to gold. Gold is the oldest form of money and has proven to be a safe haven for centuries. Gold cannot be printed, degraded, or inflated. Simply put, gold is financial insurance.
To better understand this concept, it is important to start investing in your own education. Financial education should be taught in our school system, however, it is unfortunately not like that. If you are concerned about where to keep your cash so that you can protect your money from danger and destruction, you will have to take those matters into your own hands. And for good reason too, your savings should be in your hands because your economy should be the most important economy to you!
Learn what the banks don’t want you to know and protect your money from danger and destruction.
[i] http://www.cbc.ca/news/business/saving-tips-1.4131592
[ii] https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets