Less than half of Australians are aware that cash is the safest place to invest money, with 22 per cent believing property is still a safer option, new research has revealed.
Another 20 per cent believe a fixed income option is a safer place to invest money, while 10 per cent think equities is safer, the research commissioned by Raiz Invest has found today.
Raiz Invest managing director George Lucas said Australians are also unaware of how to maximise the power of savings.
“Many Australians are completely unaware of the best options to protect and grow their income and think they’re getting 2-3 per cent on their savings accounts when, depending on the bank, it’s often less than 1 per cent,” he said.
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“This is due to the way savings accounts are advertised with introductory offers. At this interest rate, if Australians are using their savings accounts to save money, with inflation, the opposite is happening and they’re actually going backwards.
“That’s why it’s important to ensure we’re educating consumers now on how to look after their money if they’re to become more financially stable in the future.”
The Raiz research coincides with fresh warnings over Australians’ lack of savings.
More than one in two, or 11 million Australians, don’t have enough money to cover a $5,000 emergency, a Finder survey has found.
That means one in four Australians would ask their friends and family for help, while 13 per cent would reach for a personal loan. Another 12 per cent would use a credit card.
“We’ve all been there. Whether it’s an unexpected visit to the dentist or a little fender bender, a single unplanned expense could derail millions of Australian households,” Finder’s personal finance expert, Kate Browne said.
But that doesn’t mean starting savings habits is impossible.
“Saving is no easy task and if you think you’ll find it hard to manually pop some money away, set up a savings account with automatic transfers.
“Start by cutting your expenses and seeking a better financial deal. You’d be surprised by just how much you’ll have left in your pocket simply by switching providers.”
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