Piggy Bank: A Thing Of The Past

Are you someone who still save money on a piggy bank? Do you keep a specific amount each day or are you the one who just drops spare coins or bills when you have. How long have you been doing this? How much are you able to accumulate for that time?   If you are still doing this kind of saving money, think again. did the money grow over time in your piggy bank or did it just lose value due to inflation? You may also note that there is a possibility that saving money in piggy banks can be soon subject for crime. Piggy banks are things of the past. Today i will share some of the alternatives you can choose over piggy banks. These are basically financial products and services that can help you grow your money better than your piggy banks.   1. Savings account. Savings accounts are bank products you can use to save your money. Banks offers interest rates of 1-3 percent per year. it is better than your piggy bank since piggy banks doesn't earn interest no matter how long you keep your money there. This product is the most common of all and the most easiest to open.   2. Time deposit account. Time deposits are similar to savings account. However, you are not allowed to withdraw for a certain amount of time as compared to a savings account where you can withdraw as much as everyday. also, this earns more interest as compared with savings accounts. Choose this if you don't care when you cannot withdraw your money for several months up to several years.   3. Mutual fund. If you don't need to withdraw your money longer and wants to earn higher, then mutual funds can be your option. Mutual funds is a kind of pooled fund where all the money from everyone who joined is pooled and invested in stocks or equities, bonds and other investment. Mutual funds are managed by a fund manager who is responsible in deciding what investments are good choice so that the pooled money can grow.   4. Unit Investment Trust Fund (UITF). UITFs are very similar to mutual fund. It has also a fund manager who creates the strategy on where to allocate the funds. One difference of UITF from mutual fund is, UITFs are managed by banks.   5. Stocks investing. You can also try investing in stocks. When you invest in stocks, you become part owner of the company from where you buy your stocks from. If the performance of the company is good, it will reflect on the value of their stocks, thus, you will earn from it. Investing is a long-term option compared to trading. Most people invest in stocks for five, ten or even more than 20 years.   6. Treasury bills. If stocks is like lending money to the companies who are listed in the stock market, investing in treasury bills is like lending to the government. It is also a long-term investment vehicles. While stocks have high risks, most treasury bills are medium to low risks because no matter what happens to the economy, you are assured that the government will pay you back.   7. Money market funds. Also known as money market mutual funds, are investment vehicles that will also give you high returns. It is somewhat similar to bank savings account for its liquidity. However, it gives better returns as compared to bank savings account.   8. Variable Universal Life Insurance (VUL). If you want to have an investment at the same have an insurance, you might consider having a VUL. It is like having an insurance combined with a mutual funds.   9. Currency trading. Also known as foreign currency exchange or forex, it is somewhat similar to stocks trading but instead of trading stocks, you are trading currencies. You can trade euro to US dollars (vice-versa) or other partner currencies. You can earn from this due to the fluctuation of values of currencies. Let's say you bought 10,000 euros for 1.18 EUR/USD exchange for 11,800 USD. After a few weeks, the value of EUR became 1.25 EUR/USD and then you sell it for 12,500 dollars. Your profit would be 12,500 - 11,800 which is $700. Example taken from here.   10. Stocks trading. Stocks trading and stocks investing are two different ways to earn from stocks or equities. While investing takes several months to several years, stocks trading only take several days or even just hours within the schedule trading hours. Note that stocks trading is very risky, you can earn a lot within a short amount of time but you can also lose money within short period of time as well.   After reading this article, have you decided to forget saving on your piggy banks? Why not try savings account, mutual funds, UITF, stocks trading and investing, currency trading, VUL, money market fund or treasury bills? Piggy banks are really things of the past!

Mark Hugh Neri

Looking for financial planning workshop or for life and/or health insurance with investment options? Got questions related to personal finance? Feel free to message me at Money Gizmo (see link below)

Subscribe to Money Gizmo

Get the latest posts delivered right to your inbox.

or subscribe via RSS with Feedly!