Based on True Events 💯
Let me share a true story. I have a classmate who earned over 10 million dollars five years ago. Instead of buying a house, speculating in stocks, or investing in financial products, he deposited all his funds in a commercial bank and withdrew the interest annually to redeposit it.
When I heard this, I felt both amused and sad. Although this conservative investment method is stable, it might not keep up with inflation. With his 10 million dollars in the bank, even at a high annual interest rate of 3%, he would only earn 300,000 dollars a year in interest. Such income makes it difficult to achieve long-term appreciation of funds.
I advised him to invest part of his funds in the stock market or buy stock funds for higher returns. However, he admitted he had no knowledge or experience in investments and was worried about losing money. I suggested he could choose some historically stable blue-chip stocks for long-term investment or well-known stock funds to diversify risks. Despite this, he remained firm on not touching his principal.
I've tried my best to persuade him, but ultimately, it depends on his willingness to embrace new knowledge and concepts. Sometimes, being overly cautious can be self-limiting. His 10 million dollars may not reach its full potential due to his overly conservative approach.
What do you think? Is my perspective right or my friend's? Everyone has different understandings, so investment strategies vary. What's your opinion?
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