All those who save money are punished. How much more punishment do you want to take?

The sad truth is that those who save money and husband it in fixed deposits get nothing for their pains. The small interest that is derived from the deposit is sliced through by taxes and the balance is swallowed up by inflation.  The money in the deposit does not grow and everyone knows that the value of capital deprecites with rising costs.  Net, Net–savers are losers. or it appears. Savers are the ones that are severely punished for their pains.

The problem arises from their perception about money. “Saving is good. Debt is bad.” So, they struggle to save money and pay of their debts. They do not think that they can use borrowed money to generate money.  They borrow money to pay off a liability. They insist that they are wise.  Do you agree?

I do not. Those who understand money and the velocity of money are the winners!

Let us examine this fact.  When one person puts money into the bank for the purpose of earning interest (that is eaten away by taxes and inflation), another borrows it. The person who puts in the money, loses money. The bank makes money by lending other people’s money.  Businesses make money by borrowing from other people (via the bank or getting others to invest in Public offers). In other words, those you use other people’s money to make money are the gainers. They are also rewarded for it by way of tax incentives on interest/dividend paid on borrowed capital.

It appears, that there is good debt too! If you understand the dynamics of it, you may cease to be punished for your pains! You need to decide how much more punishment you are willing to take!  Get educated. Increase your financial IQ and get going!