I see loads of investors or financial advisors saying that “buy assets. Money in the bank will mean nothing”. I don’t understand how spending helps even if it is on assets. How can one take loan and buy a house? If one has savings to see them through in case they get out of budget isn’t that better? Or is poor-person mentality?
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When inflation happens, the value of the currency decreases. So $20 in 1980 had much more buying power than it does today.
Say, in 1980, you stored a $20 bill in a piggy bank. And you opened the piggy bank today. That 10 dollars is worth significantly less than it did in 1980.
Now if you used that money to buy stock in Apple. That $20 would be worth over $14,000 today.
So they are saying if you leave money in the bank, your money will depreciate and you will “lose” money. If you invest smartly, there’s a chance your money could increase.
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