The investment landscape has changed. Back in 2000, AAA rated bonds offered 7.68%(https://fred.stlouisfed.org/series/AAA) . Today S&P Rated AAA German bonds have a negative 0,243% 10-year return and banks offer near to 0% interest on your savings.
One dollar placed in the bank account in 1927, today would only be worth 3 cents. That is a 97% devaluation due to inflation. This is why it is absolutely vital to place your savings into interest or return bearing products.
If we take inflation at an average of 3%, one dollar today will be worth 0.63cents in 15 years’ time. This means that a sum of 500,000EUR on a savings account will be worth 316,000EUR in 15-years’ time.
Stashing cash on your bank account is not safe. It has carries a risk of Inflation, which is a real “invisible” loss on your capital.
With the interest rates being close to nothing, the wealthy are looking for alternative investments to place their funds and earn a decent return. Why not follow in their steps? Even though they may have a higher risk tolerance, they still do not want to lose money and seek out investments that earn a return. They have access to investments that most people don’t due to their status and fund managers’ reach.
What stops most people from taking the same steps? Research shows that people will take more risk not to lose money than to earn a profit and potentially stop reaching their long-term financial goals. In addition, today’s mentality of “living the moment” inhibits people from saving for the long term.
Due to COVID and the uncertainties it brought about, experts advise that we should learn the importance of financial security and the importance of having passive income along with an emergency fund.
There are many ways to invest. You can start a regular savings plan such as the S&P 500 Index or you try the 12-month Fixed Income Plan which gives you 10% interest per year paid out directly to your bank account every three months.
Alternatively, you have the stock market or the ETFs.
About the 12-Month Fixed Income Plan
The 12-month Fixed Income Plan is a perfect regular income plan. It is very short term and provides you with a 10% interest over the 12 months. The interest is paid every quarter directly to your bank account providing you with a regular return or retirement income.
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