Why is it better to invest than to save?

Investments: invest instead of saving

Why are there currently such low interest rates for savers?
Savers currently get little interest. This is partly because the European Central Bank is currently offering its money to the banks at very low interest rates. This also helps the states in the euro crisis to stimulate the economy. However, these low interest rates also mean that savers, for example, receive less than one percent interest on average on the overnight money account. With the inflation rate currently above one percent, money is actually losing value.

Where to invest
Anyone who invests in real assets such as stocks or real estate benefits from these real investments when they increase in value - especially in the long term. By buying a share, for example, investors participate in a company that is backed by real values ​​- such as machines or factory buildings. Those who save with investment funds also reduce their risk. Because funds distribute the money of the savers to many different securities or real estate. This offsets possible losses through profits elsewhere.

Why is one percentage point more so important in the long run?
In the long run, a percentage point goes a long way. For example, if you pay 100 euros a month for 20 years into an investment with a 1.5 percent return per year, you will end up with 28,000 euros, with a return of 5 percent the investor will be happy about 41,000 euros after 20 years. This is due to the so-called compound interest effect, which has a turbo effect ("interest on interest") on your investment. Reinvesting the generated income creates an additional increase in the value of a system.