Saving for rainy days or for investing

Saving for rainy days or for investing:

Future is full of uncertainties and being financially secure is one of the targets that people should pursue. Saving money for rainy days is an expression often quoted to stress the necessity to save. Emergency fund created for extra occasions or for retirement is the usual means of saving. It is really important and any extra income should be set aside for saving purposes. However, another important target for saving money is often neglected when discussing purposes of saving and that is saving for investing. In our view, it may be even more important than any other financial target due to the reasons we are going to discuss in this post. Let’s go on a quest to find out the benefits of saving for rainy days and for investing. 

The benefits of saving for rainy days

Available money for emergencies

There are plenty of expenses that may arise due to unforeseen circumstances: medical expenses that are necessary to cover medical bills, loss of job (income), repair of your property (car, house). The money put aside for these emergencies will allow you to deal with the issues immediately instead of having to borrow to solve the issues. 

Extra funds for retirement 

When you quit your regular job and retire your income from work will stop coming, and you will need to have extra money to live on (apart from retirement funds). Your savings stored up for that purpose will come in handy then. They will substitute the income you used to get from your job and you will be able to maintain the lifestyle you are used to. 

Extra cash to pay for education or starting a business

Getting education becomes more expensive every year and if you do not want to take a loan to cover the expenses for studying you should consider saving. The same is true if you intend to start a business. You will need extra funds to do that. Start-up costs may eat up quite a chunk of your savings before your business starts running successfully. 

Inflation may erode all of your savings

If you do not find how to increase your savings and they grow just by means of you contributing regular amounts you will lose a significant value of your savings (and the benefits savings create) in the long run. Why? Inflation will erode some (or even big part) of it. Money loses value over the time even in such low inflationary geographical areas as Europe and in such high inflationary zones as Venezuela or Zimbabwe, not only money, but all of your savings become worthless. 

Below is the world map of inflation (from IMF – International Monetary Fund) in various geographical areas. Check out what percentage of value money loses each year in the region you live in. 


While inflation in Europe is just 2.2%, it would mean that all goods should double in price every 31 years. From practice, we know it happens faster for the most commonly used goods (particularly food). Under normal circumstances, prices double every 28 years. However, various factors make inflation in different regions jump up and down (despite the fact Central banks implement their monetary policy to keep inflation under 2%). The table below is a reference of how fast prices would double in various geographical regions if inflation there stays at the current levels. 

Despite the fact, Europe and North America are able to contain inflation, there always are periods of high inflation in each generation and every region/country due to systematic changes, geopolitical/financial uncertainties, crises and many more. In 1946, Germany experienced hyperinflation of 41.9 quadrillion percent (prices doubled every 15.3 hours), Argentina – 59% in 2019 (May), Ukraine – 47% in 2015, Turkey – 25% in 2018, the United States – 20% in 1917. This proves that prices for goods may double faster than is shown in the table above. Thus, savings may lose value faster than you can imagine. How to protect the value of your money and savings?

Saving to invest is the solution

Regular saving and investing are one of the best ways to preserve your capital from being eaten away by inflation. Savings accounts, unfortunately, do not serve well fighting against inflation. Even in low inflationary regions such as EU or North America, keeping money in savings accounts in the commercial banks will keep you losing money to inflation. In both the US and EU the rates for savings accounts stayed at 0.20-0.30% from 2009 to 2018. In the US, after the FED started raising rates in 2018, it gave a small boost to the rates for savings accounts, but the average rates merely keep up with the current inflation of 2.2%. In the EU, after the ECB introduced a negative interest rate investing in savings accounts remains highly unattractive (currently at 0.37%) and surely loses to inflation.

Most popular investment options in relation to inflation

Average inflation in the world is at 4.9% now and of the selected investment options only SP500 and assets on Debitum Network help you to beat inflation and preserve your capital. Other options leave you in a deplorable position as your money and savings keep losing value every year. SP500, by the way, falls within the risk category of medium to high, which means that potential offered returns, in the long run, are good. However, prices and values of the securities or funds may fluctuate significantly and cause big swings in your portfolio, which not every investor can handle well. On the other hand, investing in Debitum Network assets falls within low to medium risk category meaning the quality of investments are higher and they provide better guarantees and capital protection than stocks or similar kind of securities. And the returns are higher than for more volatile investments in the most popular stock index in the world!

Overcome inflation investing in the assets on Debitum Network platform

The average interest rate paid to investors on Debitum Network platform is at 9.88%. This annual return will help you to stay way ahead of annual inflation in Europe and globally. Extra safety measures such as reliable risk assessing and a buyback guarantee make the investment in the assets quite a safe choice. The minimum deposit amount is just 50 EUR and the investment amount just 10 EUR. Register and start earning interest right away. We have selected an asset of the week to help you choose where to invest. Check it out.

Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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