Due to global political and economic crises, the turmoil caused by the spread of the Corona epidemic, the outbreak of wars and other crises, many are facing challenges in preserving the value of their money.
People can think about investing their money safely and effectively, and the suggestion of buying gold or the dollar may come to mind, and in this article we will answer this question and explain how to save money better in this context.
The importance of saving money right now
Currently, the world is witnessing massive economic fluctuations, which raises people's anxiety and makes them uncertain about the future. This is particularly due to high inflation rates and the ongoing increase in the prices of goods and services, which causes a negative impact on wages and reduces the purchasing power of currencies.
These difficult circumstances require additional expenses, which are usually difficult to cover without a secure financial reserve, hence the crucial need to retain and save money for future use.
Advantages and disadvantages of saving money
To preserve money and save, you will have many benefits in the long term, and we will mention the most important of these benefits:
1. The ability to face emergencies: Saving money serves as an effective way to confront challenges and emergency circumstances in your life. Regardless of your financial situation, you may encounter unexpected situations, and this makes saving a way to secure yourself during those difficult times.
2. Controlling expenses: Saving money encourages rational thinking before making financial decisions. It may help you get rid of bad consumer habits such as extravagance, setting priorities, and avoiding unnecessary expenses.
3. Self-development: Saving and saving money can enable you to invest your money in learning and acquiring new skills to develop yourself. You can obtain new certificates or join training courses that increase your chances of creating additional wealth in the long term.
4. Achieving personal goals: Saving can help you achieve your personal goals, such as: buying a house or a new car, traveling, securing your children’s future by providing them with education, or planning for retirement.
5. Achieving financial balance: It is encouraged not to rely completely on the monthly salary, as the purchasing value of money can decline with high inflation rates. Therefore, monthly savings can cover the financial shortage and help avoid debt.
However, it should be noted that saving money does not generate additional financial returns on its own and cannot increase your money the way active investing or trading can do. Therefore, it is important to balance saving and investing based on your financial goals and personal circumstances.
Which is better for saving money, gold or the dollar?
There is a question about which is better for investing, the dollar or gold. However, we must understand that answering this question is not an easy matter. This depends on a group of variable factors. Below we will explain the advantages and disadvantages of both gold and the dollar to help you make the most appropriate decision according to your personal circumstances:
Advantages of saving gold
Many people usually prefer to invest in gold during periods of economic instability, such as high inflation rates and economic problems, as gold is considered a safe haven that protects against the risk of financial market collapse, and there are many advantages that make gold investment preferable to many:
- Ease of investment: Gold is available in a variety of weights, from pieces as small as 2 grams to bars weighing 1 kilogram, allowing all individuals and budgets to invest in it.
- Stability of value: Gold is considered a means of preserving the value of money in the long term, as it has relative stability and the ability to maintain value in the face of inflation and economic fluctuations.
- Quick conversion into cash: Thanks to the high liquidity of gold, the investor can quickly convert his investment into cash when needed.
- Scarcity of resources: Gold is considered a rare metal, and the demand for it is increasing significantly in industry and in the jewelry and electronics industries, which enhances its value based on the principle of supply and demand.
Despite these advantages, gold investing should be done with care and guidance by a qualified financial advisor, as it does not provide the same investment return as other assets such as stocks and can be vulnerable to price fluctuations.
Disadvantages of saving gold
The price of gold is strongly affected by the movement of global stock markets, and therefore, its value changes dramatically, especially when the US dollar is rising.
Although gold is considered a good way to preserve wealth, it does not generate a regular monthly or annual income for its owner. There are also fears of gold being stolen, which makes some people wary of keeping large amounts of gold in their homes.
Advantages of saving the dollar
For many individuals, saving US dollars is a favorable option due to the dollar's leading role as a global reserve currency. Here are some of the advantages of the US dollar:
- Economic stability: The US dollar is considered one of the most stable foreign currencies in the world. This is due to the great economic power that the United States enjoys and therefore, it can be considered a reliable means of maintaining financial value in the long term.
- Global acceptance: The US dollar is considered a widely accepted currency around the world, allowing individuals to deal with it in any country that reads the currencies.
- Protection from fluctuations: Holding US dollars can be a good way to protect money from sudden fluctuations, especially in countries experiencing economic turmoil and fluctuations in the value of their local currency.
In short, the US dollar can be a good option for keeping money and transacting globally easily, but keeping money in fiat currency and investing in other assets should also be balanced according to personal investment goals and financial circumstances.
Disadvantages of saving the dollar
Despite the great stability enjoyed by the US dollar, its value is susceptible to fluctuations in global markets and various economic and political factors. We must note that there may be a deterioration in the purchasing power of the dollar over time and this could lead to a decline in the real value of the saved money.
Why is trading a good investment option?
After we learned about the advantages and disadvantages of gold and the dollar as means of saving money, we come here to talk about how to trade through the best online trading platforms.
Trading has now become the focus of attention of most people who are looking for ways to obtain large financial returns in exchange for investing their money. There are several reasons that make trading a good option for saving money, and we talked about them in the topic: Explanation of stock trading: your guide to stock trading