What is better - money in the bank or investing in shares?
If you have five to seven years or longer; then you can start to invest in shares…Warren Ingram, Personal Financial Advisor - Galileo Capital
It's been stated on numerous occasions on The Money Show that investing in shares earns one compound interest. You even had an example of a young lady, I think it's Julia, who's saved millions and earns compound interest through shares. I've had an online share trading account for many years and have never seen any interest. I've been wondering if this is a fact. I called my online share services provider and I was told they are not allowed to discuss compound interest with me as they are non-advisory. When I asked why I do not see such credits in my account, I was told it’s because they don't offer such interest. Is it perhaps about a type of broker I'm using?The Money Show listener
Arabile Gumede (in for Whitfield) asked Galileo Capital personal finance expert Warren Ingram for an answer.
Compound interest vs compound growth
Money in the bank earns you interest.
Over time; the interest compounds (i.e. you earn interest on interest).
When you invest in shares; you reap the growth in value of those assets.
They may sound like the same thing, but they’re not.
Which one is better; money in the bank earning compound interest, or investing in shares?
It depends whether you’re playing a long or a short game, said Ingram.
For more detail, listen to the interview in the audio below (and scroll down for more quotes from it).
Don’t start thinking about investing if you have bad debt. Credit card debt, personal loans, overdrafts, microloans, store card debt…Warren Ingram, Personal Financial Advisor - Galileo Capital
You always need an emergency fund… About three to six months’ expenses… that you can keep in a money market account at a bank…Warren Ingram, Personal Financial Advisor - Galileo Capital
Investors are starting to think the stock market will never ever go up again… a common mistake investors make all around the world…Warren Ingram, Personal Financial Advisor - Galileo Capital
Our stock market consists of many companies that operate right around the world… It’s not a reflection only of our economy…Warren Ingram, Personal Financial Advisor - Galileo Capital
It’s not that I’ve been smoking some heavy stuff or drinking too much… what I do know is that patient investors… get the reward…Warren Ingram, Personal Financial Advisor - Galileo Capital
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