This is a favourite saying by Robert Kiyosaki and it’s the unfortunate truth today. If you have your savings in cash you need to be aware that you have a very risky investment.

Governments are massively over-indebted because they shut down the economy and want to bail everyone out. This debt will never be repaid, instead it will be inflated away through the creation of ever more money. The US alone increased money supply by 30% last year, too bad if you were saving in cash. The International Monetary Fund wants governments to keep spending, to try and prop up markets. This will in time lead to inflation. Real costs will keep rising, like groceries, council rates and power.

NZ is also in the process of creating money out of thin air – which is why asset prices are rising so quickly. It’s not because of foreign buyers or property investors or first home buyers. The reason for rapidly rising house prices, gold, shares, classic cars, collectible paintings, and any other asset with real tangible value is that these cannot be stolen by the state through the creation of new money.

Would you rather own a share of Port of Tauranga or have money in the bank, with more money being created every day?

In a nutshell:

• Inflation is eating away at your cash savings
• You pay tax on your interest, there are no deductibles
• There is no capital gain on cash, unlike a business, property or shares
• There is no leverage on a cash investment

I’m not an investment advisor, just someone who takes a very keen interest in what’s going on in the world. The value of money is reducing rapidly. The fastest way to reduce your wealth is to hold cash in the bank.

John Kenel
Assured Property

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