Why Under-the-Mattress Savings are Risky
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There are many things you can do with your savings—store them in a bank account, buy gold or silver, or invest in mutual funds. However, that’s not what most Americans have in mind. According to a survey carried out by the American Express, a whopping 53% of adults are hoarding cash and storing it under mattresses, fridges, or some other hiding spot.
While the survey doesn’t go on to explain exactly why people do such things, the banking crisis of 2008 might be to blame as it dramatically decreased trust in traditional banking institutions.
Whatever the reason, in this blog, we’re going to list a couple of reasons why under-the-mattress savings are risky.
You’ll Miss Out on Making More Money
Money that’s in your pocket, under the mattress, or safely tucked under the drawer loses value with time. Even extremely low-interest rates are better than earning nothing. Inflation rises at around 3% on average each year and decreases the value of your savings.
Not investing in retirement plans or mutual funds means that ten or thirty years down the road, you won’t be able to purchase as much as you can today. Storing cash at home also increases the risk of miscalculations and leads to tax complications.
Your Money Isn’t Safe
As many have tried to guess, safety is one of the primary reasons why more than half of Americans store money under the mattress. The reality; however, is different. Storing cash at home makes it vulnerable. You could fall prey to a pest infestation that eats all the paper money, you could get robbed, there could be a flood or fire or a family member could stumble upon the cash and use it for their use.
On the other hand, money stored in a 401(k) savings or an individual retirement account secures your capital and multiplies it over time. The only time it’s acceptable to have money at your home instead of the bank is when you have absolutely nothing saved and need cash to make daily payments.
The safest way to store your money without risking its value is by purchasing gold and silver bullions. Gold is a great store of value that protects your savings against the effects of inflation and economic crisis. Orion Metal Exchange provides gold IRA investing opportunities and enables clients to buy gold and silver bullions. Contact us today for more information.
