A lot of people are actually becoming poorer by the day without realizing it. How? You may ask yourself, well this is because of inflation.
Inflation is a general increase in prices and fall in the purchasing value of money. Inflation is the reason why groceries, and basically anything else you buy, are becoming more expensive. In the U.S. inflation averages about 3% a year. This is why, in 2004 a Snickers bar was .85 cents, but now it costs around 1.29. Now sometimes you can find them cheaper, but this is around the average price. That same Snickers bar is expected to be 3.25 by 2050.
This also makes your money lose value. Because if you had a dollar in 2004, you would be able to afford the Snickers. Now, however, if you have that same exact dollar and you go try to buy a Snickers you can’t afford it with just that dollar.
This is how people are becoming poorer by the day. So, if you don’t want this to happen, you need to invest your money. There is a catch though, most people invest their money at the bank. to accrue interest. My bank gives me 0.09% interest for putting my money in the bank, but the rate of inflation is going up 3% each year. So really I’m not making any money, I’m losing money.
If you don’t want your money to lose value, your money has to grow by at least 3% a year. This is how rich get richer and the poor get poorer. The rich don’t put their money in the bank, they invest it.
In a previous blog I talked about investing, and different ways to invest your money. But before you invest your money make sure that you have studied, researched or talked to a financial advisor about your investment so you know where you’re putting your money. Never invest in something you don’t understand.