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Saving Your Money Can Cause Economy Downturn!

Very weird topic huh?!  Well as you all know start from day 1 we born in the world. Our parents always advise us to save money. The same goes when we enter school, university and it will continue until you sign pension form. Saving..saving...and saving your money.

Circulation of money is a part of economy pulse.

So, what you should do? Means that once you got your wages you have to spend 100%? No, it's not that way. Totally wrong. Now,I'm sure once you got your earnings every month, you already separate some portions for savings right? There are 2 types of savings:

i) Active saving

ii)Passive saving

What is active saving? Active savings is where you put your money in investment fund, saving account provided by bank, in Unit Trust, Amanah Saham, EPF and generally where you put your money in Financial Institutions certified by government agencies. The role of Financial Institution is to invest the money where they create the products such as Personal Loan, Housing Loan, Bond, and etc. Then, the borrower will use the bank's money to increase their money. Let say, the borrower take Personal Loan RM100k for 10 years to run a dobi business. And the borrower will get some profit from the business, and from the profit he/she will buy a house, buy a nasi lemak, service his/her car at the workshop and so on. And his/her money will keep circulating around and around. So, the money from your savings actually is a part of economy activity!

What is passive saving? Passive savings is where you put your money below the pillow, inside your cupboard, 'tabung' and generally where you put your money inside the static fund. This type of savings is not good for company but  only benefit to you maybe when emergency happens. (But nowadays you can use your credit card what?) This type of savings which is good if only you reserve some percentage probably the percentage of passive saving lesser than active savings. But it is bad to economy when people reserve their money too much in passive savings. When too much passive savings you have, the money is not circulating and it is not meaningful to the economy because the economy is not generated. You 'hold' the money means you 'hold' the economy activity. Financial Institution dont get your money, when they dont get your money they cannot create a finance product. When no finance product, people cannot borrow money from bank. When people canot borrow money form bank they cannot run the business because they have no money. When people no money, no activity will generated. When no activity generated the economy will collapse....

So, whether you are doctor, graphic designer, lorry driver, technician, CEO of GLC company, please make sure your active saving is much more than passive savings

Circulation of money is a part of economy pulse.