How Losing Money May Be The Best Way To Invest
If ever you wanted something that seems like backward logic, here it is - losing money may be the best way to invest!
Of course that statement only makes sense with a bit of further explanation, so here we go...
A lot of people do nothing to invest their money. It's basically down
to pure laziness, they just can't be bothered to make the effort to
research the various options, pick what suits them and invest.
The most that some people will do is open a 'savings'
account with their bank. To be honest the bank will just laugh at how
they can get away with giving customers such poor saving rates and
still have customers lap it up!
- When people do look at financial investment, the majority won't consider things like art or property, thinking they are too risky. Some simply buy a savings bond.
Well if you have a balance on your credit cards, the quite simply best investment you can ever make is to cut your balance, and pay it off as soon as possible! You'll be earning more than that savings account or that savings bond (as long as you will not simply spend more on that credit card!).
High Interest Rates Add Up
Not only do credit card companies legally charge astronomical annual interest rates, they actually apply the rate in monthly amounts, which bumps it up even more when you factor in compound interest.
Compound interest works by adding the interest you owe to your balance as quickly as possible. Then when next month comes around, your interest rate is applied to your new balance, which includes the previous month's interest - so you are paying interest on the interest!
You can see why credit card companies fall over themselves to lend you money.
Spend Less On Fees
If you pay off your balance quicker, you turn this compounding factor in your favor. Your interest every month is less, meaning the interest on the interest the following month is less, and so on.
If you put any spare money you have towards paying off these balances, going for the one with the highest rate first, you will save yourself a staggering amount of money over the long run.
Apart from stocks and shares and property, there is *nothing* that comes close to bringing you that kind of return for your money.
So, although you may appear to be losing money, because you won't see your money in a savings account, you'll actually be making much better use of it by paying off your credit card balances.
It's the kind of knowledge they don't want you to have, so now that you have it, use it!
If you are good at paying credit cards bills on time, get the Get the Discover® Motiva Card and get your interest back! Apply Here! It is a very interesting program that rewards you for ontime payments.
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