'Saving' is a losing strategy..
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@johncarlson6472 • 1 hour ago
While many folks poopoo saving, it helps to remember the past. When WWII hit and the Gov needed $$$ to fund the war, where did they get the the money? The Citizens. That's right. The Gov knew that after the Great Depression, everyone saved. EVERYONE...and sold them war bonds. Following the great market crash, citizens learned the hard way it was important to not go "all-in" on risk investing and have a healthy liquid savings as well...and saw the small loss against inflation they were taking as a "risk premium" thety paid for preace of mind. So while that measley 4% one gets on savings may not completely offset inflation, having that savings when that big, fat, black swan flies overhead and takes it's inevitable steaming dump on the markets and other risk-on asset classes, you'll be glad you had that risk-free liquidity to ride out the storm and snatch up the deals.
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@Lifebeyondthesea
what has changed from then to now is that Obama passed into law legislation (the Dodd-Frank Act) that now allows banks to do a Bail In (not a bail out). many people don't know this.
with a bailout, the usa govt saved the banks in the past from the banks mismanagement of funds. however, with a Bail In... the banks saves itself by forcefully taking a percentage of depositor's money, and gives them essentially worthless stocks in the same mismanaged bank.
so, having a big savings balance ends up getting raided by the same bank you're trusting to keep it safe.
and this is aside from the fact that the rate of inflation is higher than the interest rate on a savings account. which means as time moves forward, that savings balance is losing purchasing power.
LifeBeyondTheSea - Philippines Podcast
'Saving' is a losing strategy..
-------------------------------------
@johncarlson6472 • 1 hour ago
While many folks poopoo saving, it helps to remember the past. When WWII hit and the Gov needed $$$ to fund the war, where did they get the the money? The Citizens. That's right. The Gov knew that after the Great Depression, everyone saved. EVERYONE...and sold them war bonds. Following the great market crash, citizens learned the hard way it was important to not go "all-in" on risk investing and have a healthy liquid savings as well...and saw the small loss against inflation they were taking as a "risk premium" thety paid for preace of mind. So while that measley 4% one gets on savings may not completely offset inflation, having that savings when that big, fat, black swan flies overhead and takes it's inevitable steaming dump on the markets and other risk-on asset classes, you'll be glad you had that risk-free liquidity to ride out the storm and snatch up the deals.
.
@Lifebeyondthesea
what has changed from then to now is that Obama passed into law legislation (the Dodd-Frank Act) that now allows banks to do a Bail In (not a bail out). many people don't know this.
with a bailout, the usa govt saved the banks in the past from the banks mismanagement of funds. however, with a Bail In... the banks saves itself by forcefully taking a percentage of depositor's money, and gives them essentially worthless stocks in the same mismanaged bank.
so, having a big savings balance ends up getting raided by the same bank you're trusting to keep it safe.
and this is aside from the fact that the rate of inflation is higher than the interest rate on a savings account. which means as time moves forward, that savings balance is losing purchasing power.
www.investopedia.com/articles/markets-economy/0907…
2 weeks ago | [YT] | 34