Post
Topic
Board Economics
Re: Why we should prioritize investment over saving
by
LesterD
on 11/02/2024, 11:31:25 UTC
Why we should patronize investment over savings is that investmet provides more profit than savings. Let's take for example you save money in bank for 3 years, instead of making profit your money would be gradually deducted bit by bit for maintenance,  transfer or SMS fee. But in investment like Bitcoin, volatility in Bitcoin will make it to increase, except the volatility is a negative volatile instead of positive volatility.

There is a misconception here. Leaving money in the bank account is also an investment, namely in the bank's liquidity. The bank pays you interest for this. This interest is not paid because the bank is charitable, but because it needs the money to build up its own equity and to issue loans. If the bank goes bust, the money is usually (partly or completely) gone. It is therefore also an investment to leave your money with the bank, albeit less risky (at least with stable institutions).
Keeping your money in a bank account is not the same as investing, it is called Savings. If you choose to leave your money in the bank, you may earn a very small amount of interest each year. However, this may not be a very profitable approach that's why you cannot call it an investment. The bank is the only one that benefits from using your money, not you. Therefore, keeping your money in the bank is not an investment.