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Keeping all their money in savings accounts will cause it to lose out to inflation, so how do I convince my parents to take their money out of their savings accounts and invest wisely instead?
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Chin Guo Qiang (ITIL4 / CSPO / CSM)
05 Aug 2020
Assistant Vice President, IT Operations at Bank of China Limited
Convincing them is the best way to go upfront. I did show them the numbers for 3 to 5 years of saving up in the following accounts
P.S: Graphical charts will be an interesting approach here.
Sample savings sum - $10,000 (for illustration of my points here)
Normal Savings account (0.05% interest per year)
High-interest yield savings account (1 ~ 1.45% interest per year, ie. OCBC 360, SFL Vivid etc.)
Singapore Savings Bonds (assuming the peak of avg 2% per year)
Low-risk investments
Medium risk investments
Deficit scenario
Think I made my points there by this point.
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This question warrants us to navigate through the many controversial opinions we each have. Hence I do not think an absolute answer can be obtained. Personally, I would not interfere with the management of my parent's fund as we treasure them dearly to ourselves and the idea of volatility may not be well understood to them. I do not want my parents to feel uncomfortable.
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I personally feel that you can convince them showing there save account is lossing money showing them the cost of inflation of basic consumer good then showing them basic investment which does not have high ROI but safer. Remember this, investing is like a work out . There are many kinds of investing but it is still better then nothing
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j
01 Aug 2020
IT at Accounting firm
Perhaps a relatable way to share with your parents can be through examples of inflation in our daily...
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