Ever hear the phrase money in the bank? That was a good thing. If someone said it was like money in the bank, it meant you could count on it. These days money in the bank is not a good thing. My bank is currently paying 1% on the money in the savings account. I think I was getting something 5% when is was kid, but I could be wrong. 1%? I could have a thousand dollars in my savings account, and at the end of the year I would have a measley ten dollars. Wow! Don’t spend it all in one place! Money in the bank? Why bother? A return of 1% won’t even keep up with the rate of inflation! If I deposited the $100 in my savings account at 1% interest, after 10 years, the $100 plus interest ($110.46) will buy less than the original $100 would have.
I could put my money into a CD and get around 4-4.5% on my money. That is a little better. Still not great though. That might be my best choice though if I am going to need the money in the next year or two. Say to buy a house or pay college tuition.
But if I want to grow the money and have more than a few years before I will need the money, it needs to go into stocks, or stock funds! Stocks and stock funds have a much better return. And they are they relatively safe if my time horizion is long enough. I am not talking about putting the money in flash in the pan hot stocks. I am talking about putting the moeny into the S&P 500, and blue chip stocks! Walmart, Disney, Coka Cola! If I put my money ino the stock market, in solid companies, with proper diversification, and a long enough time horizon, I will safely make far more money than that losuy 1% savings rate! Now thats money in the bank!