💡 A refrigerator that stops for even one moment puts all the food inside at risk.
Saving that works is the same thing: the moment it stops, it's easy to forget about it completely.
For example:If you deposit money into savings only sometimes, whenever you remember - it's easy to stop without even noticing.
But if the deposit happens automatically every week, it just keeps happening in the background, even without you thinking about it.
That means it never stops, and we're constantly moving money into our savings account without thinking about it.
That's how Israel's "Savings for Every Child" program works. The moment you were born, the government sent your parents a letter asking them to choose where they wanted to save on your behalf.
Your parents chose the company or bank where the money would be saved, and also chose whether to add an extra sum from the "child allowance" the National Insurance Institute (a government body) pays them every month to the amount it transfers there.
So it works out that the National Insurance Institute transfers 58 ₪ every month, and the parents (those who chose to authorize it with the National Insurance Institute) also transfer 58 ₪ every month,
and together the savings amount comes to 116 ₪ every month, automatically.
The goal is that by age 18, every child in Israel will have a savings plan that lets them start their adult life with a sum of money that opens up new opportunities for them.
Parents can choose the type of savings, the company that will manage the funds for them, and the financial plan.
At a bank, you can choose a savings plan with interest that's known in advance, according to the savings track chosen, and that guarantees you'll get back at least the deposited funds credited to you.
At the various insurance companies, the savings plan is called an investment provident fund, and it's a financial tool that lets you invest the money in the capital market, according to the investment policy of the managing company and according to the type the parents chose.
*Investment provident fund - a tool that lets you save money through it, or invest money in a liquid way (liquid means the money can be withdrawn at any moment) in the capital market, through an institutional financial body (investment houses or insurance companies - professionals who understand better than most of us how to invest money), which invests it according to the track you chose.
*The capital market - this is a market (like the one where you buy fruit, vegetables, and clothes) but where people buy and sell financial assets, or in other words, exchange money or all kinds of instruments that have monetary value.
For example, shares (a share is a unit of ownership in a company; when you buy a share, you basically become a kind of partner in the company and benefit from the return if its value rises, or if the company distributes its profits - that's called a dividend)
or bonds (a bond is a certificate of debt (money that belongs to us) through which we lend (let someone else hold onto our money) money to a certain body (a company or a government) in exchange for repayment of the money plus interest agreed on in advance).
This "market" lets companies grow and fund their activity through investors (individuals or companies) who buy their shares or bonds and pay them in order to get a part of their company. When a company's value rises, the value of its share or bond rises too, and then whoever holds it can choose to keep it or sell it and profit from the return.
Savings that never stop keep growing even when we're not paying any attention to them at all.