Money is omnipresent and influences many aspects of our lives. But much of what we think we know about money is based on outdated knowledge.
The financial world has changed, and with it, the rules for managing money successfully. This article will teach you some surprising truths about money that your parents and grandparents may not have taught you. Also, financial truths are always changing a little, and the world is changing – and so is the world of finance. Either way, the following insights could help you to be smarter with your money and make better financial decisions. Another good decision might be the new National Casino login.
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1. Money Does Stink
The saying “money doesn’t stink” is used to convince people that it’s okay to earn money in disreputable ways. The saying goes back to the Roman Emperor Vespasian, who ruled from 69 to 79 AD and who took over a debt-ridden state from Emperor Nero. In order to fill the coffers again, he invented all kinds of taxes – including one for toilets. When he was criticized for this, he is said to have offered the critic a coin to smell – to make it clear: Money itself doesn’t stink, no matter where it comes from.
Two thousand years later, many still act like the Roman emperor. That is also one reason for the problems and injustices in the world: money from environmentally harmful industries or exploitative working conditions causes massive ecological, societal, and social damage.
Money stinks, has oil and blood on it and is radioactive. In other words, it doesn’t matter where it comes from because it does matter whether we are unfair or destroy the environment. Sustainable management and a responsible approach to money are, therefore, becoming increasingly important for both private and professional investors.
Tip: Critically reflect on your own financial decisions and their ethical implications. Question the origin of your money and invest in ethically, socially, and ecologically sound projects.
It doesn’t have to stink: look at what money can do
2. Savings Accounts Are Money Pits
Traditional savings accounts are considered safe investments, especially by parents and grandparents. It is not uncommon for them to set up a savings account when their child or grandchild starts life. This is really well-intentioned. But in times of low interest rates, savings accounts can be real “money pits.” The money is safe, but it doesn’t multiply—on the contrary.
The reason: the meager interest rates on today’s savings accounts cannot compensate for inflation. Savings may grow in numerical terms, but in real terms, they lose purchasing power and, therefore, value. This doesn’t mean that it can’t be a good start for you to begin accumulating wealth with a basic amount from your savings account. However, savings accounts are inefficient for long-term saving and wealth accumulation.
Instead, you could consider alternative forms of investment, such as funds. These can offer better potential returns and, if selected appropriately, also invest specifically in companies that consider ecological and social aspects in their activities and thus achieve positive effects.
However, depending on the specific form of investment, such investments also entail risks, such as fluctuations in value.
Tip: Use diversified investments such as shares or funds to build up assets in the long term. See also the next tip.
Take a look at how you can invest your money and achieve a measurable, sustainable impact in the process
3. Diversification Makes You Resilient
Sustainable investment through diversification. We are increasingly recognizing diversification as an important characteristic in all areas of life. One example of this is ecosystems, where the greatest possible diversity of species and biodiversity increases the system’s stability and makes it more robust and resilient.
Diversity can also be useful when investing money: By spreading your money or assets across different asset classes, regions, or sectors, you reduce risks. A broadly diversified portfolio is simply less susceptible to individual market fluctuations and can benefit from different developments.
You can also diversify using the time factor. For example, by building up assets regularly and over the long term via a fund savings plan, you pay into a fund regardless of the ups and downs of the stock market – and in the end, the performance is also less dependent on fluctuations.
