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Get Sorted: Why KiwiSaver balances go up... and down

Wednesday 17 May 17 2:50pm
New Zealand Herald: Quick question: what's the difference between a savings account and a KiwiSaver account?
Short answer: when you put money in, the first always goes up, but the other goes up and down. That's no small thing.

 

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11855341

And while we personal finance folks like to go on about the magic of compounding for both saving and investment, sometimes we'd be better off pointing out how different the two are.

The one caveat to saying that a savings account always goes up is inflation. Savings can actually roll backwards as well, when you bring inflation into the picture. You're adding money, but its real value and how much it can buy gradually becomes less and less. This is why we need investing. More>


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