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How to grow your savings? It is the dilemma of every saver, from those who have only a few tens of euros to those who have collected them in the millions. Notwithstanding the fact that the main road passes through one’s work and the correct management of hard-earned finances, there are, however, other measures that in the long run make the difference. For example, a secret to getting rich: cut costs like these. Let’s take concrete examples.
Cut your checking account costs
According to a study published by the Bank of Italy in 2020 on the previous year, the cost of managing a traditional account was € 79.4 (+ € 1.8 on 2016). How much does a similar current account cost but in the online version? On average zero or in any case very close to zero. Now, assuming an average gap of around € 65/75 per year, in the long run we are talking about substantial differences. For example, assuming that for a decade the economic distances between the two types of products remain identical, it would be around 650-750 euros the money for a free vacation. Visit https://valuenetworksandcollaboration.com/evergreen-wealth-formula-review/ to understand how to increase it.
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Active or passive portfolio management
Another sore point concerns the “active” management of the portfolio. The example par excellence is the comparison between an ETF and a traditional mutual fund. Now, with reference to the end of 2016, the total costs associated with the investment in an Italian harmonized open-end mutual fund were estimated on average at 1.74% (Bank of Italy data, using the “Total Shareholder Cost” method).
A philosophy to be applied at 360 °
Obviously, such a way of doing things must be extended to 360 ° to everything concerning the management of one’s assets. Think of the management costs of a life policy or the costs of maintaining and underwriting a PIP. Or how much it costs in a nutshell to buy a BTP at the counter or if done in home banking. And so on.
The importance of keeping costs at bay
Careful attention to costs (from car insurance to home loans, from gym membership to commissions for the purchase of a stock, etc) is of vital importance. Beyond the important fact that it is a secret to getting rich: it cuts costs like these, there is also another aspect to keep in mind.
The useless cost (or unfair, if compared to the same product-service) constitutes in 100% of cases the part of the money earned. Because then we could also discuss earnings, interest, returns, etc., but this does not always belong to the field of mathematical certainty. Example: € 10,000 on active management (mutual fund) could also yield more than a passive instrument, but the statistic says that most of them yield less than the reference benchmark. What is the difference? Simple, but decisive. The higher yield has to be demonstrated, and will be known afterwards. The lower cost is certain, and it is known in advance: this is why it is considered a sure gain.
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