Ask Paul: My son says I'm wasting money keeping it in the bank
Thank you for your recent offer to answer cost-of-living questions.
I am a pensioner and have saved up a few thousand dollars for a rainy day.
My son keeps telling me to invest it, but I am happier keeping it in the bank.
I am managing okay with my bills. But I like knowing I have this for unexpected expenses.
He says it's wasted just sitting in the bank. Am I really doing the wrong thing here? Is there a way to compromise? - Leanne
You know, Leanne, there is no compromise here. This is your money and your decision.
You are a pensioner. Your son is not doing the wrong thing - he wants the best for you and wants you to earn higher returns. I applaud that.
But he is incorrect.
He sees risk through the eyes of a youngster, which is great for him. If he makes a poor investment decision, so be it. He can easily re-earn that money.
But I agree with you completely. You see risk through the eyes of a retiree who cannot work to replace lost money.
What I would do is to thank your son for his advice, but let him know that the security of your money is really important to you.
With rising interest rates, you should also be able to get more than 4% on your money in a bank with effectively no risk. This is a terrific return for little risk.
You can tell him you are being both secure and earning great returns.
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