4 reasons why savers are losers.

Remember the old saying, "A penny saved is a penny earned"? If it was ever true, it certainly isn't true anymore. Today, simply saving your money in a bank account is one of the surest ways to lose value. Here's why:

1. Inflation will eat away your money. Today's interest rates on savings accounts and even CDs are generally below the rate of inflation. So every month, you're actually losing value.

2. Taxes are higher on interest. Even if you break even with the inflation rate, you still lose. That's because the tax rate on interest income is higher than the tax rate on capital gains income.

3. Investments pay higher returns. Speaking of capital gains, that's where the biggest investment returns are. When you invest in the ownership of something like real estate, the value of your investment usually rises faster than inflation.

4. Investing lets you use other people's money to make money. Investing in real estate can multiply your returns because you can borrow much of the money you need. Let's say you put down $20,000 and take out a mortgage to pay for the rest of a $200,000 property. If the property is worth $300,000 in five years, you've actually quintupled the value of your original investment!

If you like assistant with getting access to funds for investment purposes, give me a call today.

More helpful tips coming soon...

Your trusted mortgage advisor,

Jeff Kerwin

 

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