Is it better to save money or invest it? - page 705.

bryant.coleman

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Quote from: twn on April 18, 2015, 05:37:35 AM

Bank rates always lower than country enflasion points. Thats how banks makes money

I disagree with your observation. Banks lend money at higher rates than they give to their depositors. That is how they make profits. For example, if a depositor is paid 4.5% per year interest by the bank, it might charge 7% or higher for the loans which it gives out.

Dotakels

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Quote from: Sarthak on April 18, 2015, 05:53:43 AM

Quote from: jerol31 on March 26, 2015, 08:25:04 AM

Is it better to save money in bank or invest it online, in real estate or maybe gold?

"An investment in knowledge pays the best interest." - Benjamin Franklin

See warren Buffet, he wouldn't be so rich if he had been saving his money for all this time instead of investing

Don't invest what you can't afford to loose

Invest responsibly!

Happy Investing Cheesy

Happy Money-Making Grin

Yeah invest only that you can. Dont invest yiu cannot afford. And you can make money even if you only sitting on your sala's and watching movie by investing. Investing is so great Grin

Sarthak

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Quote from: jerol31 on March 26, 2015, 08:25:04 AM

Is it better to save money in bank or invest it online, in real estate or maybe gold?

"An investment in knowledge pays the best interest." - Benjamin Franklin

See warren Buffet, he wouldn't be so rich if he had been saving his money for all this time instead of investing

Don't invest what you can't afford to loose

Invest responsibly!

Happy Investing Cheesy

Happy Money-Making Grin

twn

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Quote from: bryant.coleman on April 16, 2015, 11:56:02 PM

Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

The Indian Rupee is a very weak currency, which is undergoing devaluation at a rate of 7% to 10% every year. So even if you get a 10% interest on your INR deposits, effectively, your net holdings are not increasing.

Bank rates always lower than country enflasion points. Thats how banks makes money

bryant.coleman

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It is foolish to keep our savings in the form of fiat currency, as it is always losing value due to inflation and increasing monetary supply. But in case of Bitcoin, the reverse is true. The monetary supply is limited, and as the adoption increases, the real value will also increase.

freehorizon

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In modern economy, when you save in the bank, the bank actually invests most of your money in the economy.
From the economy point of view its better if you invest your money, but from a personal point of view there are times when its better to really save your money.
But, it also depends on the currency used. In fiat currency its not worth to save because of inflation, while in Bitcoin it is worth to save for the long run because it is deflationary.

Sithara007

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Quote from: aso118 on April 18, 2015, 01:03:57 AM

Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

You should look at the real interest rate, not the nominal one.
This website will give you an idea
http://data.worldbank.org/indicator/FR.INR.RINR

Thanks a lot for the link. That is really informative. In previous year, it's even negative...that's shocking.

aso118

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Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

You should look at the real interest rate, not the nominal one.
This website will give you an idea
http://data.worldbank.org/indicator/FR.INR.RINR

Natalia_AnatolioPAMM

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Quote from: tyz on April 17, 2015, 03:17:38 AM

I would say it depends on what you can risk and how the inflation rate for your currency is. If inflation rate is high, saving money does not really make sense. If you need the money to buy food and clothes (basic things) then saving is better than investing.

shortly and so right. cannot add anything more

GreenStox

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Quote from: twister on April 17, 2015, 02:45:05 AM

Quote from: GreenStox on April 17, 2015, 01:39:15 AM

Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

Thats being done because the inflation is eating it up. You got 1 billion people there that some need welfare, of course your government will print money.

You always have to look at the net interest rate. If you inflation is like 50% and your government gives your 51% on deposits, you dont get 51% return you only get 1% return....

So yea. If your annual interest is like 10%, then the inflation is easily 7-8%, so you also get only 2%, and good luck with that becoming rich lol....

That's true and it's not even 2 % return. Apart from the inflation the market value of your investment would be even less after an year. Say you could buy something now for $100, in a year the value of that same thing would get increased by at-least 10%. So where's your ROI?

Independent price increase doesnt count it, thats not in the inflation model. Besides prices rarely increase aside from inflation, which is not really a price increase, but a decrease of the purchasing power of the currency.

But of course since its relative it looks like the price ha increased, and its easier to blame the capitalists, than the socialists.

But also you can pre-invest it really easily.

For example if the INR would have 100% interest and 99% inflation then you can keep your currency in the bank getting 1% return a year, and by the inflation lowers itself to 1%, you would really have made 99% return in a long term.

But this only works if there is proof that the YOY inflation decreases, if the government is incompetent and just prints money and causes hyperinflation, then its a gamble and not recommended.

But if they just had a serious problem, and now they are at 99% inflation, and its decreasing, then i would invest in that currency because after a while the return will really by 99% after the inflation gets to 1%.

So i would rather invest in a currency with 100% interest and 99% inflation, then in one with 2% interest and 1% inflation. The net return is the same but the first one has more potential return in the future Grin

Sithara007

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Quote from: GreenStox on April 17, 2015, 01:39:15 AM

Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

Thats being done because the inflation is eating it up. You got 1 billion people there that some need welfare, of course your government will print money.

You always have to look at the net interest rate. If you inflation is like 50% and your government gives your 51% on deposits, you dont get 51% return you only get 1% return....

So yea. If your annual interest is like 10%, then the inflation is easily 7-8%, so you also get only 2%, and good luck with that becoming rich lol....

But what about the other countries which are offering 2-3% interest rates, are they not facing any kind of inflation? It's not possible that they are having 0% inflation.

Dotakels

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Quote from: tyz on April 17, 2015, 03:17:38 AM

I would say it depends on what you can risk and how the inflation rate for your currency is. If inflation rate is high, saving money does not really make sense. If you need the money to buy food and clothes (basic things) then saving is better than investing.

If the inflation high but, if the inflation is low the recommended for you is to save and your salary must higher in the inflation rate so that you can save great.

tyz

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I would say it depends on what you can risk and how the inflation rate for your currency is. If inflation rate is high, saving money does not really make sense. If you need the money to buy food and clothes (basic things) then saving is better than investing.

twister

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Quote from: GreenStox on April 17, 2015, 01:39:15 AM

Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

Thats being done because the inflation is eating it up. You got 1 billion people there that some need welfare, of course your government will print money.

You always have to look at the net interest rate. If you inflation is like 50% and your government gives your 51% on deposits, you dont get 51% return you only get 1% return....

So yea. If your annual interest is like 10%, then the inflation is easily 7-8%, so you also get only 2%, and good luck with that becoming rich lol....

That's true and it's not even 2 % return. Apart from the inflation the market value of your investment would be even less after an year. Say you could buy something now for $100, in a year the value of that same thing would get increased by at-least 10%. So where's your ROI?

GreenStox

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Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

Thats being done because the inflation is eating it up. You got 1 billion people there that some need welfare, of course your government will print money.

You always have to look at the net interest rate. If you inflation is like 50% and your government gives your 51% on deposits, you dont get 51% return you only get 1% return....

So yea. If your annual interest is like 10%, then the inflation is easily 7-8%, so you also get only 2%, and good luck with that becoming rich lol....

bryant.coleman

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Quote from: Sithara007 on April 16, 2015, 11:38:50 PM

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

The Indian Rupee is a very weak currency, which is undergoing devaluation at a rate of 7% to 10% every year. So even if you get a 10% interest on your INR deposits, effectively, your net holdings are not increasing.

Sithara007

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Quote from: Dotakels on April 16, 2015, 12:18:09 AM

Quote from: Amph on April 15, 2015, 03:23:30 PM

Quote from: Dotakels on April 15, 2015, 01:56:42 AM

Quote from: Sithara007 on April 15, 2015, 01:41:50 AM

Quote from: Dotakels on April 14, 2015, 04:58:11 AM

Quote from: Sithara007 on April 14, 2015, 04:22:41 AM

Quote from: jerol31 on March 26, 2015, 08:25:04 AM

Is it better to save money in bank or invest it online, in real estate or maybe gold?

Investment is a kind of savings. If you are doing savings then you can not keep it in the cash form with you. You will have to invest it in Fixed deposit, Real state, gold or shares, etc.

~~Investment is a kind of savings~~ I disagree with that because, investing have a risk that your money would be lost or earn a profits. Also investing take too much time than saving. Saving takes 3-5 years before you stop to save (it depends on your salary every month) but in investing takes 10-15 years depends on the contract and the company (you wouldn't assure that your money can earn or will be lost its) its 50%-50%. And f you invest you can earn more profits by using the compound interest it can earn more profit as years passes by than simple interest.

Not totally true. There are some investment tool available which has zero risk and will give you return in 3-5 years as well. That will totally depends upon the risk profile of the individual and his requirements.

Yeah theres some but its hard to find that company that zero risk. And if its only 3-5 years you profit is not high because your time is not so long and it depends on the interest of that company where your profit are big or small.

many banks offers 1-3% max of annual interest, but you need to freeze your account for one year, they should be pretty safe as far as i know, it's not like playing ponzi with bitcoin for sure...

but overall is a very tiny amount, not sure it worth it to freeze your account for one year, i know that i won't do that...

But the interest is so low. If i invest i would not invest to the company that have only 1-3% because after 5-10 years my profit will be small and the interest is only simple interest . If the interes is compound and its annual interest is 1-3% i think i will invest, because it compound interest and assure to myself that i will earn a big profits.

But in countries like India, Banks are giving 7-10% annual interest rate depending upon the amount, bank and maturity tenure. So that's not very bad compare to what you are refereeing to.

GreenStox

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Quote from: lucasjkr on April 16, 2015, 06:19:03 PM

You have to remember that 0.25% is not the norm; rates were dropped to zero as a result of the financial crisis in 08. "Normal times" they fluctuate - 3%, 6%, 8%... heck, early 80's you could get 16-20%. Of course, mortgages were also 14-18%.

But you have to stop looking at the situation as it is today and projecting that out to the indefinite future... Things are a lot more stable than they were, and the Fed is talking about letting rates rise, which'll have a trickle down effect across the rest of the world in turn.

These last few years of 0 to 0.25% interest on savings have been brutal for savers, but are far from the norm.

In what planet do you live lucas?

Check out this page and inform yourself:

www.nationaldebtclocks.org

Interest rates wont be raised again, they are going only down and down, into negative territory. Then they start up the printing press, and start doing QE infinity to print themselves out of debt.

Say goodbye to your bank savings because global hyperinflation will come!

lucasjkr

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Quote from: GreenStox on April 16, 2015, 06:01:50 PM

Quote from: Dotakels on April 16, 2015, 03:20:10 PM

You can also earn big profit in banks by using the compound interest. People know that if you let your money in bank it will gain a very small profit ,but if you use a simple interest you will earn a small profit but if you use the compound interest it will doubled or triple your money because of that interest.

Of course in like 200 years sure.

I hardly doubt that with 0.25% yearly interest you will double your money very soon lol...

You have to remember that 0.25% is not the norm; rates were dropped to zero as a result of the financial crisis in 08. "Normal times" they fluctuate - 3%, 6%, 8%... heck, early 80's you could get 16-20%. Of course, mortgages were also 14-18%.

But you have to stop looking at the situation as it is today and projecting that out to the indefinite future... Things are a lot more stable than they were, and the Fed is talking about letting rates rise, which'll have a trickle down effect across the rest of the world in turn.

These last few years of 0 to 0.25% interest on savings have been brutal for savers, but are far from the norm.

lucasjkr

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Quote from: Dotakels on April 16, 2015, 05:14:39 AM

Yeah its too low. You invest 100k and you only earn per year is 1-3k? No one invest in that situation. Your 100k are in the risk that it may loss and you invest it to earn only 1-3k per year? No one businessman or woman will agree with that.

Every businessman agrees to that. They keep their money in bank accounts for less than the 1-3% annual interest you're citing. How else to you think they pay their bills, employee paychecks, etc?

In many countries, US specific since that's where I am, the $100k isn't at risk at all. FDIC insured. But in countries without such backstops, you still see people depositing their money for far less than 1-3%

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