Where to save money in this time of financial turmoil is a very smart and usual question. What was once the champion of savings security, banks, today is very much in question. In a live chat, in all the media of Editorial Prensa Ibérica, in which I answered questions about personal finances, as the editorial director of iAhorro, this question has arisen : Where to save the savings? I doubt that I would say that all savers are formulating ourselves at the moment. Advancing that there are more questions than answers, in this type of question, I leave my answer in case it helps you, at least, to know what questions to ask.
The first thing is to section the question into several questions
- Where should I save the savings to me? That is, what kind of person I am, at what moment of my life I am, what is the current personal, family and economic situation and the predictable one in the future.
- In which financial institution or institution should I keep them? A bank, in a safe, in an insurer … The solvency, seriousness and professionalism of the custodian of our savings is vital. It always has been, but now it is clear.
- What financial product or asset should I invest in? From time deposits, through investment funds or gold, to name a few of the best known, there is an immense variety of savings and investment products to which our savings go. There are big differences, not only between different types of assets, but between the same assets. A term deposit of a bank that needs public money is not the same as that of a bank whose solvency is maximum. A deposit is not the same as a guaranteed investment fund. Not a guaranteed fund that invests in assets of the depository bank itself, than another that diversifies in assets outside its own balance sheet.
To answer the first question
Again we have new questions: Am I a person who is willing to take risks? Can I afford to lose money, without sleeping badly? Do I have little left to retire or, on the contrary, I have my whole life ahead of me? I have children who depend on me or I am single. My heritage is very high or I have to invest my only savings … Know yourself and know the enemy, who said Sun Tzu in ‘The Art of War’.
Regarding the second issue
The solvency of the financial entity (or other type of company) is key to assess whether we should invest in its products. Seeking the credit rating, the rating, of the bank in which we have our money, should be the first thing we do, before even considering what kind of asset to invest.