Idle money loses value
Money that lies unused in our bank not only loses value because of inflation, but it neither gains any value as it should have if invested. The significance of this is not felt over short periods of time such as day or weeks, but larger periods of time such as years and decades. Just as someone’s fortunes can rise in the stock markets over time, in the same way idle money does exactly the opposite. The same amount of money today could be relatively worthless a few decades later.
So what is idle money?
Idle money is money that is not working for us. It is not gaining any interest nor is it gaining us any benefits through investment. This is up and above your daily expenses as well as any money kept for immediate usage or emergencies.
Why do people have idle money?
There are many reasons for having idle money lying in our bank accounts. We may not invest idle funds because investing them may seem like too much of a hassle. Or we may think that we could end up losing our hard-earned money during market crashes.
That is why we are here to tell you that there are safeguards everyone should keep in mind when investing their money. Just like you put on a seat belt knowing there is some risk in traveling by car, the same goes here. But more often than not, we end up at our destination.
Disclaimer: The contents of this page do not constitute investment advice. Please contact your authorised investment advisor before making any investments or acting upon the contents of this page.