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Are Your Savings Losing Value?

Where are people suppose to invest their savings? Where can they invest their money safely? Where can their money be secure?

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Are Your Savings Losing Value?

  1. 1. Are Your Savings Losing Value?
  2. 2. Where are people suppose to invest their savings?
  3. 3. Where can people invest their money safely?
  4. 4. Where can people’s money be secure?
  5. 5. “There aren’t many safe places to invest your money … if any.”
  6. 6. Contrary to popular thinking, there never really was a secure place to invest your money that pays a fairly decent return.
  7. 7. The only real safe investment is a Guaranteed Investment Certificate (GIC), and lately that type of investment has not been paying very much.
  8. 8. What about the people who are looking to save for their retirement but they aren’t there yet?
  9. 9. People are hoping to put their money in some type of registered account (RRSP, or TFSA) and invest it in a high yield investment.
  10. 10. If the investment is a GIC and it’s only paying 2%, there’s not a lot of wealth accumulation happening.
  11. 11. With that type of return, people are barely keeping ahead of inflation plus there are income taxes that have to be paid.
  12. 12. For example, let’s say John is able to put aside $500 a month in his RRSP and that money is invested into a GIC account at 2%.
  13. 13. After a year, each monthly contribution of $500 is only worth $510.
  14. 14. Even with compound interest, it’s going to take a long time to create wealth while earning only 2%, even if the tax is deferred.
  15. 15. Tax is deferred when interest is being earned inside a registered account.
  16. 16. If you are investing in a GIC outside of a registered account, the return is even worse.
  17. 17. So John continues to work hard, saves that $500 a month, cuts back on a lot of pleasures so he can reach his target savings only to find out he can’t retire because his return is so low.
  18. 18. John’s money is hardly increasing in value because of the cost of living.
  19. 19. “It’s important to make sure that you save smart and invest smart.”
  20. 20. There are lots of people working long hours, working double jobs, just so they can earn enough to make a living.
  21. 21. When people invest their money, they should also make sure they are investing wisely.
  22. 22. For the longest time, people have been told that mutual funds are safe. THIS IS NOT TRUE.
  23. 23. “There are much better ways to invest your money then in mutual funds or stocks and bonds.”
  24. 24. There are a lot of ways that you can invest in Real Estate that are safe and secure, if done properly.
  25. 25. “Wise investing doesn’t just mean being so risk adverse that your savings are actually losing money”
  26. 26. It’s time to take back control of your investments from the big financial institutions.
  27. 27. Now I’m not saying you can’t make better returns in the stock market.
  28. 28. Most people don’t want to take the time to invest in the stock market properly.
  29. 29. You have to have a good plan with a good broker and you need time to make money in the stock market.
  30. 30. Even if you do have a good plan and a good broker, you still don’t have control over your investment and you aren’t able to respond to any sudden changes in the economy that could grossly affect your investment.
  31. 31. Inflation could actually eat up your earnings.
  32. 32. The future value of $500 in the last 10 years, adjusted for inflation, is 3.67% x $500 =$18.35.
  33. 33. That’s not a lot to show for a 10 year return and for all the hard work it took to earn that $500 in the first place.
  34. 34. There were actually 3 years in the past 10 years where the investment of 2% didn’t make enough to keep up with inflation.
  35. 35. “You always have to think of the future value when looking at your investments, especially with such low rates of return.”
  36. 36. “An investment strategy based strictly on preservation of capital does not provide any growth at all.”
  37. 37. Because of inflation, $500 has really only increased by $18.35, even though the actual dollar value of the investment has risen to about $609.50.
  38. 38. The buying power of the investment is only worth $518.75 in today’s dollars.
  39. 39. People just look at the value of their investment and think it has risen by over $100, as is the case in this example.
  40. 40. This type of investment strategy is the equivalent of putting your money under your mattress.
  41. 41. I’m not sure which is more irresponsible … not investing your money or investing it into such a low yield investment.
  42. 42. “There is no difference between someone who can read and someone who cannot read.”
  43. 43. “If you are not taking responsibility for your investments and invest them into poor performing investments, you might as well not invest at all.”
  44. 44. People are so afraid of losing their money because of the high volatility and poor performance they have seen in the stock market lately.
  45. 45. There are certainly some considerations depending on your age and your accumulated savings thus far.
  46. 46. “The older you are and the higher amount of your savings to date … the more risk adverse you need to be.”
  47. 47. There’s a much easier way to make money outside of the stock market and it’s very passive.
  48. 48. You have to do your own due diligence as well.
  49. 49. “There are several ways to invest safely in real estate and yield much higher returns”
  50. 50. Check out my book for a Step by Step approach on how you can get started in Real Estate Investing. Real Estate Investing: The 7 Step Solution to Making Millions in Real Estate
  51. 51. Jim Pellerin has been investing in real estate for over 25 years. He is the author of Real Estate Investing: The 7 Step Solution to Making Millions in Real Estate Check out his blog at

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Where are people suppose to invest their savings? Where can they invest their money safely? Where can their money be secure?


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