Save your savings! 5 ways to stop your bank account from losing you money
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You wouldn’t expect to go to work and give a poor performance, so why do you put up with lackluster effort from your money?
Leaving your hard-earned cash in a savings account may be safe, but over time, inflation will erode your pay cheque. Historically, inflation is usually higher than the interest you earn from a deposit account.
Not knowing how to grow their wealth is what holds most people back 54% of UAE respondents in our global Emerging Affluent Survey believe that financial education will help them reach their financial goals faster.
Here are five tips to make the most of your money:
It’s not enough just to save your money. To grow your wealth you have to invest. Although investments go through ups and downs, they can be potentially more rewarding over the longer term, beating the rate of inflation.
Because not all asset classes perform consistently across time, diversifying across asset classes and markets helps reduce volatility, balancing risk and returns. If one investment performs poorly over a certain period, other investments may perform better over the same time, reducing potential losses.
Develop the habit of investing regularly by automating your investments. One way to achieve this is through a savings plan, where you can automatically transfer funds from your savings account and invest in selected funds every month. You will also enjoy the benefit of dollar-cost averaging, which rides out the highs and lows of the market.
A market correction refers to a price decline of at least 10%. Not only are market corrections normal, they can create some of the best opportunities to increase the potential for returns and minimize the potential for losses by making stocks cheaper relative to their earnings potential.
Investment for many people is a bit like writing a will, they know they have to do it but find it difficult to address the need or make the commitment to doing it.
The biggest barrier to investing is lack of knowledge. Our research has shown that globally 49% of those we surveyed only use savings products (saving accounts and fixed deposits)– despite having the money to invest. So it’s important to get advice from the experts, to ensure your money works as hard as you do.
If you do not have the time nor the patience to dig deep into the details, you can learn the basics from educational articles and supplement it with expert financial advice from a trusted financial advisor.
This article is brought to you by Standard Chartered UAE. This information is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This information is general and does not take into account a person’s individual circumstances, objectives or needs. Investments carry risk and values may go up as well as down. Standard Chartered is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein.
