Recent Headline in the Daily Mail – “What IS the Point of Saving?”August 5, 2021
As the Daily Mail headline shouted – “What is the point of Saving”- let’s take a closer look at what the fuss was all about in all the papers recently, and what can be done to create a more fair and rewarding playing field for savers. Bear in mind I am no qualified investment person, but I do have experience in making money out of Forex Trading, and back in 2006, saw the massive opportunity to use gold bullion price changes, to make a lot of money.
If you look at the NS&I web site, you will see that they advertise this as being “A Piece of Cake”, and “Open Your Account with just £1, Enjoy Easy Access to your Savings”, but let’s look at some cold hard facts.
If you are a saver who regularly saves say £100 per month in this scheme, with an annual return of 1.5%, for every £1,000 invested over 12 months, you will get paid interest of £15.
But, with inflation eating into the spending value of your money at around 2% per annum, your £1,000 in savings will actually lose around £20 of its spending power, so your “savings plan” in reality made a loss of £5.
Looking into this in more detail, we know from The Telegraph recently, that there are millions of savers in this scheme, so let’s assume that there are at least 100,000 subscribers who also save £1,000 or more per annum crypto watch. I make that around £100 million.
At Government level that sum could easily be traded on the Currency markets, and I understand there are some such Trades that could pay out up to 100% every 90 days. (See above on my own rewarding Forex experience, and that was using just a few hundred pounds as my stake money).
The trouble with virtually any savings scheme that is based on any “FIAT” currency, is that its value is based on nothing other than promises from the Government that issued it (such as The Pound, Dollar Euro etc) and as such, is constantly being devalued due to constant inflation.
However, if you were to exchange some of your FIAT currency for Gold Bullion on a regular basis, I believe that would paint a totally different picture. Look at some figures below, which shows what happened to gold bullion prices between 2000 and 2020.
Between the beginning and end of 2006, Gold went up in value from £9.78 per gram, to £10.17 which was when I first started getting involved in Forex Trading and made a KILLING trading in Gold, unlike my disastrous property investment activities at that time, due to all btl mortgages becoming deregulated.