3 Assets Better Than Cash | Investment Tips
The once steadfast belief in “Cash is King” is fading, making room for more resilient and adaptable financial strategies. In a era marked by meager bank interest rates and economic uncertainties, relying solely on a bank account might not be the wisest approach for wealth preservation and growth. The key to sustainable financial health often lies not in the bank vault but in a diversified portfolio of assets that offer better potential returns and safety than traditional cash savings. This article delight offers insights into 3 Assets Better Than Cash that have a track record of being safer and offering better returns compared to keeping money in cash savings.
Why To Invest 3 Assets Better Than Cash
Holding or saving cash in the long run, can prove to be a liability, since the saving accounts and the low interest rates are not adjusted for inflation. Thus, your money’s value only depreciates over time and so does its power of purchasing.
Suppose you have INR 100 in a savings account with an annual interest rate of 1%. At the end of the year, you’ll earn INR 1 in interest, making your total savings INR 101.Now, if inflation is 3%, the prices of goods and services go up by that amount. So, the things you want to buy now cost 3% more. If an item that was INR 103 last year due to inflation, even with the interest earned, your INR 101 can’t cover the increased cost. This means that despite the interest from the savings account, your money’s purchasing power still decreases in the face of inflation. So, the longer you keep cash , the less you can buy with that money over time.
3 Assets Better Than Cash
Safe Haven Currencies
In volatile times , whether due to war, pandemic or economic downturn, those with wealth want to keep it safe. When it comes to currencies, investors turn to one of a very few ‘safe haven’ currencies. Swiss Franc, dollar etc are generally considered safe havens for the economy behind it is stable. Able to withstand turbulent times and unexpected (‘black swan’) events such as the Covid-19 pandemic. The country holding large amounts of foreign currency itself, helps, as it can sell it to buy back its own currency when require. While not everyone can access these directly, currency ETFs and Forex Brokers provide smaller investors with exposure to stable currencies with minimal capital requirements.
Precious Metals (Gold, Silver, Platinum)
Investing in precious metals like gold, silver, and platinum is a safer and more valuable option than keeping cash in the bank due to their scarcity and rising value during inflation. They are highly sought-after precious metals that historically have proven to retain and increase their value during times of high inflation. Prices of these precious metals only grow over time, given the demand and supply curve.
Bonds
Bonds are debt securities that pay periodic interest to the holder and return the principal amount at maturity. They are issued by a government or corporation as a promise to pay back money borrowed to finance specific projects and Activities. Corporate and government bonds are the most common types, with government bonds being considered less risky. Buying a bond is effectively giving the issuer a loan for a set duration; the issuer pays a predetermined interest rate at set intervals until the bond matures.
To learn all about investing in bonds ; visit https://www.icicibank.com/blogs/investment/ways-of-investing-in-bonds
Final Takeaway | 3 Assets Better Than Cash
While retreating to cash might provide some comfort especially during turbulent times, holding on to too much cash could actually be bad for your long-term financial health. However, cash can potentially start to lose value over long periods of time if the interest rate you’re receiving is lower than the rate of inflation. The above 3 Assets Better Than Cash stand out as superior alternatives to keeping your money in cash. Exploring and investing in these potentially protect your money from the erosion of value caused by inflation.
For further insights, read The Proven Way to Beat the “Pros” and Take Control of Your Financial Future https://amzn.eu/d/cHnXXv7
Read also : 5 Timeless Money Lessons from Morgan Housel | Wealth Building Wisdom https://thebrightdelights.com/5-timeless-money-lessons-from-morgan-housel-wealth-building-wisdom/