How to beat the 2.5% savings interest rate
What alternatives do you have for beating the low interest rate you get from your bank on your savings account? Let’s start looking at what you actually get now. Do you know what the interest rate is that you are getting on your savings account in 2010? Have you checked? If not, do that now.
My bank has lowered the interest rate I am getting on my savings account in 2010. I am now getting only a miserable 2.5%. For a Stock Trend Investor, that is not enough. For nobody, that should be enough. What are the alternatives?
Bad news for buy and hold
One alternative is to put down your money for longer fixed period. My bank offers me 3.25% if I put my money down for a fixed 5 years and 4.1% if I put it down for a fixed 10 years. 10 years! To get 4.1% annually! That is an awful long time and a ridiculous low interest percentage for such a long time.
Buying and holding stocks in another alternative. But if you compare how the stock markets closed in December 2009 compared to December 1999, you can see that we had a pretty awful decade. The broad S&P 500 for instance, closed 24% lower now than 10 years ago. This is bad news for those investors who buy and hold. Ten years later and your investments have a 24% lower value.
Proven system
There are, however, lots of other investors who made good money during the last 10 years. They made much more than an annual average of 4.1% and they definitely did not lose money. How? Successful investors in general follow a solid and proven system of investing that fits them as a person.
Some people have an expert system for trading on the stock market every day, or even every hour. Other people, like the members of the community of Stock Trend Investors do not have the time to do that. They want to spend only one or two hours per month or so on our stock market investments and follow our system that enables them to evaluate only once per month if and what we shall change in our investments.
In general, we recommend everyone who wants to beat the interest rate on their savings account by investing in the stock market, to follow a proven system that fits their available time and expertise.
Check to see what interest rate you are getting now in 2010 on your savings account and sign up for our free newsletter to stay informed how to beat this.
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