Let’s talk CASH as an investment

We will be discussing
– cash
– equities
– bonds
– real estate and
-alternative investments.

Cash and short term savings are cash flow and are definitely needed to fund day to day expenses and things like house deposits, businesses and holidays etc. But Cash is NOT investing and if your current interest rate is lower than inflation, then you are LOSING money.

So what is INFLATION? The Inflation rate is the rate at which the cost of a typical basket of household goods and services changes over time. So if the inflation rate in a certain country was say 1% in 2019, it means the prices of the goods and services you used (bread, fuel, car tax, fruit, taxi fares) have gone up an average of 1% during that year. So if you were saving cash and were earning 0.4% on it, it means at the end of the year you will be WORSE OFF by 0.6% when you take the money out to pay for something ie inflation is 1% less your interest 0.4% = 0.6% loss in the year. So holding cash can LOSE you money versus investing.

So although you need cash for day to day and short term expenses, you should NOT be holding large amounts of it when it could be invested and beating inflation.

At this point you should also review your RISK tolerance. Riskier investments (like say emerging market equities or leveraged portfolios – more on that later) may yield higher levels of return but at a higher level of risk/potential loss. What level of risk are you willing to take? We will touch on risk with each asset class. Cash is low risk but as you can see, it yields low to negative returns versus inflation.

So take ACTION – are you sitting in cash that won’t be needed for ten years? If so you need to invest it. Can you put away an amount each month and invest it rather than leave it in cash or spend it?

#cash #womeninbusiness #moneymanagement #cashruleseverythingaroundme #investingtips

#investment #femaleentrepreneurs #femaleempowerment #womensupportingwomen #budgeting

#savingsgoals #savingsaccount #save #irishmum #irishmammy #andsosimple