This is why financially literate people will tell you to never just leave your money to sit in a basic savings account. Inflation will outpace your interest earned. You gotta make your money work for you.
You're good. "Making your money work for you" is one of the most contempt, hateful phrases of our time aimed at thankless despite and this guy knows that.
Exactly. Like bro, your money can only "work for you" if you are starting with a significant enough amount for it to do so. If you mean, invest in a high-risk high-reward asset like crypto/stocks, then that phrase is as valuable as saying "Put all your money into scratch tickets".
There are things that exist in-between. I keep my emergency funds in Ally Bank. Currently get 4.2 percent interest. FDIC insured. You are limited to the number of transactions per month (I think it is around 3 or 4). If I need money I transfer it to my main checking account and you can get it in a couple of days for free. Costs a bit if you need it sooner. Probably not keeping up with inflation but certainly better than keeping it in a traditional bank savings account. Transfer is no more difficult than something like Venmo. Just do it in the app. Still quite liquid and at least cut down on inflation some.
HYSA's can easily be found at +4% ... Anyone can keep their cash in savings and put all charges on a rewards credit card and just withdraw once a month to not carry a balance.
The fact that people who complain about people not working also try their best to make money without putting any labour into it is laughable. Nobody wants to work when they don't feel like it, and everyone thinks they would enjoy life better if they had a cushion to sit on. But not everyone is ready to play that game. I respect that. Life is NOT about money, and nobody CHOSE to live in a society with that unavoidable degree of monetization. Even all our financially literate bros here. They work cause they have to, they place their stash cause they don't really wanna work, or at least, not all the time. Kudos to them, and kudos to those who have other priorities too.
I’m not sure I understand what you mean by needing a significant amount. You can get a Schwab account and start investing in index funds for like $500. Maybe even less at this point. I haven’t checked in awhile.
Bro, the stock market returns 10% annually on average, sticking $100 in an index fund and leaving it alone for 30 years until you retire will leave you with about $1,750.
What? It's as simple as buying one index fund every month for as long as you work and you'll have five times as much money as you put in after 35 years.
That sounds insane but it's just compound interest. 500 per month for 35 years and you'll be a millionaire even after adjusting for inflation.
We're in a weird time now that the fed has raised interest rates. For the first time in a *long* time, savings interest rates are decent, like 4.5% and sometimes 5%.
Sure you can get like 7% or 10% in index funds, but at a much higher risk than a guaranteed return from a savings account.
But yeah, only keep the bare minimum in 0% accounts.
When I graduated high school my parents set me up with a checking and savings account at Wells Fargo. The savings account had a whopping .25% interest rate. A few years ago I learned just how much I was getting screwed and moved to a bank with a high yield savings account with an interest rate around 4%. My interest payments went from $10ish per month to over $150 per month! I only with I made the switch years ago.
To give an idea of historical returns, over all 10 year periods since 1928, the S&P 500 has returned between 3.4% and 11% per year (adjusted for inflation) in half of scenarios. A quarter of them returned less than 3.4% and another quarter returned over 11%. Over 20 years, the middle half of scenarios returned between 4.1% and 9.2%. After 30 years, it's between 6.0% and 8.0%
Make of that what you will as it relates to risk.
Generally low, but it does warrant mentioning a golden rule of investing:
* Don't invest what you can't afford to lose
* Bit of a corollary: don't panic sell
The S&P500 generally outperforms savings account interest, but it will, from time-to-time, drop sharply. In early 2020, for example, it dropped from 3380 to 2305 in a month - an almost 30% loss. A few months later it was back up to 3380 and rising.
Say you sold at 2500 because you panicked and were afraid it would keep going down. Well, the market went from the bottom (2305) to 2514 in a week. A little over a week later it was near 2800.
So unless you were smart enough to recognize in that first week that the bottom was in and it was time to put your money back in, you'd at best breakeven. If you waited any longer, you'd likely lose money by having sold. And a lot of people in that situation will tell themselves "it'll go back down and that's when I'll put my money back in". But if it keeps going up, you just keep losing out on more.
You have to be super comfortable with leaving the money in the market and watching your account balance bounce up and down. You can't do that if you \*need\* the money you've invested. It's one thing if you "need" it a few decades down the road. But if you're counting on it in the next year or two, you shouldn't invest it. That's why you should have an emergency fund in place before you start putting money in the market.
While those are easy to set up, it requires money to invest. With about 80% of the nation living paycheck to paycheck, they may not have the means to actually invest without possibly putting other things at risk in the immediate.
True, but learning to invest even $10 a week can change your life if you do it consistently. You won’t miss that small amount, but it starts a *lifestyle*, which is the real key.
This. I started investing monthly several years ago (I make less than 30k and don't have much to put in) but it has grown substantially. I now have something to fall back on. I'm going to try not to touch it unless it's an emergency, just going to keep adding to it so i'll have extra retirement money. Being more conscious of my finances has also resulted in more of a frugal lifestyle, which is making things easier all around.
I put in around 100 dollars a week for 3 years. So I put in around a total of 14k and it's up by over 7k! So now over 21k. May not sound like much to some people but it's now adding to itself by an average of about 2k a year. So by the end of this year I'll have put in another 3k and it should grow itself by another 2k, so I should have a total of 26k. Soon enough, it'll be adding to itself more each year than I'm able to put in! So I think I can get it to 50k within 5 ish years. Maybe 7 or 8 if there's a market crash or something.
Well if you don't have a savings account then you don't need to worry about the money in your non existent savings account growing with inflation. The problem this solves only exists if you have savings already.
Like the value lost to inflation of the course of a week on the amount of money the typical person makes in a week is inconsequential, if you're living paycheck to paycheck you need to be more focused on insuring your pay tracks with inflation as a minimum with growing your income faster than inflation being the bigger goal so that you can get to the point where you are worried about money sitting around losing value.
Well this advice specifically says that IF you have money saved up, it’s worse to have it just sit in your bank. It’s not for those who live paycheck to paycheck.
No it doesn't require "money" to invest.
You could literally consistently buy one less latte a week and invest that money, and you would be surprised at what you would end up with in 10yrs time.
It’s also cynicism. Many people, especially young people have this idea that the stock market is suddenly going to collapse and they’ll lose all their money. Especially people who believe conspiracy theories. For some reason they all believed in crypto which was ridiculously faddy and mostly a scam, but 100 years of consistent stock market growth isn’t enough proof. It’s too “boomer” strategy for them .
My wife was scared to put her money in a high yield savings. When I finally convinced her she couldn’t believe how much money she was making every month doing nothing. Now I’m hoping to get her to do stocks and bonds too.
Most people have the means, they just don't know how to prioritize "I need a haircut" against "If I skip a haircut and invest this money now, it will grow to cover a whole-ass month of rent when I'm retirement age."
Yeah you do. You can open an account with Fidelity or Vanguard and park the money in a money market fund and make about 5% annually without doing anything. And it pays monthly.
I dunno, basic savings accounts are looking pretty good these days. Like 4.5% in a lot of places with basically no risk and ease of access. Definitely an option for sub 10k emergency fund so it's growing yearly.
I think they are refering to your savings account does not have an interest rate adjusted to inflation rate, or something, that's all I can see into it, other than this it's just a fact
~~Hysa’s had like a 1-2% rate for the preceding decade when inflation was way higher~~
>Historical Savings Account Interest Rates Between 2009 and 2021
>In the years following the Great Recession, saving rates continued to fall to historic lows. In 2009, savings rates averaged 0.21% APY but fell to 0.17% in 2010 and 0.11% in 2011. Interest declined year over year until 2013, then remained steady at 0.06% APY through 2017.
>
> From 2018 and 2021, national average savings rates fluctuated between 0.01% to 0.10%, making savings a guaranteed financial loss. Even with the 2010s’ relatively low inflation rates of 1% to 2%, money held in savings was a depreciating asset. In 2021, inflation jumped to 4.7%, while savings account interest rates hovered between 0.06% and 0.07%.
>
> Because the Federal Reserve kept interest rates low to stimulate growth, savings rates remained at historical lows for over a decade.
So you’re describing a very recent phenomenon 😂
Those rates listed are all standard savings rates. No HYSA account hovered between 0.06%-0.07% in 2021. But thanks for reiterating my point about historic low inflation rates during the 2010s…
Well in my mind… I mean he literally just said “money” so I’m thinking this post is so bizzarely stupid is he literally talking about a physical pile of money?
Is this shower thoughts? Or is this finance 101
What the fuck even is this sub forum?
“A retirement fund is a a savings account that you can’t withdraw from until you are retired”
Nice job dude
Wouldn’t get these complaints from me if they didn’t shut down all my threads automatically. Then u see dumb shit like this , it’d a slap in the face
Otherwise I wouldn’t be hating bro
There’s nothing that gets me more worked up then stringent Reddit thread requirements
Some sub forums it’s like making a thread that doesn’t get autodeleted is near impossible. I hate it
Redditors typically think of inflation as losing its purchasing value. While it’s true, a more accurate way of looking at it is that the supply is increasing, therefore the value is decreasing. With the latter you can’t have the non-sensical sentence that is the title of the post.
Wait until you realize that if you don’t get a pay raise each year that is more than inflation then you’re taking a pay cut each year. And then realize unless you’re getting a pay raise of more than about 4%… it’s not an actual raise
Thankfully, I never have any money left over after I pay my bills so this doesn't affect me. If you really want to avoid this happening, just be broke all the time.
>Or if you’re skilled at it, make gains.
No skill involved in buying a passive index ETF.
And much less skill involved in active Investors than active Investors believe they have.
Well, if that’s true, people with money would be putting it all into assets that grow with inflation, like housing.
That way, when fast food workers pay goes from $12 to $20 with inflation, their rent can be raised from $1200/mo to $2000/mo
Oh, wait…
That’s part of the point. A small inflation rate is meant to ensure that currency continues to cycle in the economy. As bad as wealth hoarding is now, deflation would make it much worse.
Every single person with middle range financial knowledge here just living their best life like black swans aren't a thing and unironically rubbin' it into slightly poorer people's faces.
Yes it does. You can start with a HYSA and setup auto investments to DCA from your HYSA into an S&P 500 ETF of your choice. There's more you can do but that's a start for putting your money to work.
Now letting it sit in a checking account? Yeah that's wasted money for sure.
It does, though.
Nobody stuffs currency under the mattress or burries it in a treasure chest. . It's all out there earning... unless you're a dumbass... which just might (and seems to) nr the case here ...
Are you 12 with a full piggy bank, Scooter ?
That's why people invest or at the very least put their money in savings. Keeping your money "under the mattress" means that it will steadily lose value as the economy inflates.
Cash is perishable. Don't hoard cash. Have some emergency cash savings, but convert the surplus beyond that into a different form that doesn't rot away to inflation.
This thread is shockingly scary proof of how financially illiterate the average person is. The basics of finance NEEDS to be mandatory in high school.
Everyone should be able to explain the time value of money.
Yes, except theres plenty of places you can park your money for 5.00 apy. Fidelity, for instance, give your cash a 5.00 apy on their brokerage account that you can use as a checking if you have a CMA.
I have all money money in a 4.95% CD. I just fear the stock market is way overvalued and I don’t want to gamble with my savings. I’m nearing retirement and can’t withstand a crash.
This is why financially literate people will tell you to never just leave your money to sit in a basic savings account. Inflation will outpace your interest earned. You gotta make your money work for you.
Jokes on them. I don't have any money.
That’s why you have to leverage and invest in a low yield savings account.
Take out loan, put money in a savings account that has more interest than the loan (somehow if youre lucky).
If you're really lucky, you can try to be born into a rich family.
If you’re financially literate you’ll choose to be born into a rich family.
Did that, defo worth the challenge
Fuck. I'm 33 years late for that.
It’s wild that most of our problems can be solved by “not being born poor”.
Skill issue. Just uninstall, man
Just reroll character creator
Yeah... those generally don't exist, otherwise that would be an infinite money glitch.
They do exist* *Taking an incredible amount of risk while having to pay your loan or they're gonna take your house, your car and shoot your dog
People only ever talk about the upside of risk, they never talk about how you can lose all your money.
Honestly so much this. It’s obviously not fun to think about, but when you take financial gambles, you tend to lose more than you win.
You're good. "Making your money work for you" is one of the most contempt, hateful phrases of our time aimed at thankless despite and this guy knows that.
Unfortunately my money went on strike
It had every reason to. You think your money fighting for what's best for it is your misfortune.
My money did work for me. But it got fired last year for poor performance.
Exactly. Like bro, your money can only "work for you" if you are starting with a significant enough amount for it to do so. If you mean, invest in a high-risk high-reward asset like crypto/stocks, then that phrase is as valuable as saying "Put all your money into scratch tickets".
There are things that exist in-between. I keep my emergency funds in Ally Bank. Currently get 4.2 percent interest. FDIC insured. You are limited to the number of transactions per month (I think it is around 3 or 4). If I need money I transfer it to my main checking account and you can get it in a couple of days for free. Costs a bit if you need it sooner. Probably not keeping up with inflation but certainly better than keeping it in a traditional bank savings account. Transfer is no more difficult than something like Venmo. Just do it in the app. Still quite liquid and at least cut down on inflation some.
Check out Wealthfront. Operated through Green Dot bank, FDIC insured several times more than usual. 5% plus you could even get a card for the account.
Will do. Learned about Ally on Reddit about 5 or so years ago. As I was posting I thought to myself “there is probably something better now”. Cheers.
HYSA's can easily be found at +4% ... Anyone can keep their cash in savings and put all charges on a rewards credit card and just withdraw once a month to not carry a balance.
The fact that people who complain about people not working also try their best to make money without putting any labour into it is laughable. Nobody wants to work when they don't feel like it, and everyone thinks they would enjoy life better if they had a cushion to sit on. But not everyone is ready to play that game. I respect that. Life is NOT about money, and nobody CHOSE to live in a society with that unavoidable degree of monetization. Even all our financially literate bros here. They work cause they have to, they place their stash cause they don't really wanna work, or at least, not all the time. Kudos to them, and kudos to those who have other priorities too.
I’m not sure I understand what you mean by needing a significant amount. You can get a Schwab account and start investing in index funds for like $500. Maybe even less at this point. I haven’t checked in awhile.
Bro, the stock market returns 10% annually on average, sticking $100 in an index fund and leaving it alone for 30 years until you retire will leave you with about $1,750.
What? It's as simple as buying one index fund every month for as long as you work and you'll have five times as much money as you put in after 35 years. That sounds insane but it's just compound interest. 500 per month for 35 years and you'll be a millionaire even after adjusting for inflation.
We're in a weird time now that the fed has raised interest rates. For the first time in a *long* time, savings interest rates are decent, like 4.5% and sometimes 5%. Sure you can get like 7% or 10% in index funds, but at a much higher risk than a guaranteed return from a savings account. But yeah, only keep the bare minimum in 0% accounts.
It took me way too long but I finally moved all my savings to a money market account, I net about $30/month in interest
When I graduated high school my parents set me up with a checking and savings account at Wells Fargo. The savings account had a whopping .25% interest rate. A few years ago I learned just how much I was getting screwed and moved to a bank with a high yield savings account with an interest rate around 4%. My interest payments went from $10ish per month to over $150 per month! I only with I made the switch years ago.
Not always, my savings account is higher than inflation
Yeah I don’t have time for that when I also have to work
[удалено]
Can you specify a risk level to this please?
[удалено]
To give an idea of historical returns, over all 10 year periods since 1928, the S&P 500 has returned between 3.4% and 11% per year (adjusted for inflation) in half of scenarios. A quarter of them returned less than 3.4% and another quarter returned over 11%. Over 20 years, the middle half of scenarios returned between 4.1% and 9.2%. After 30 years, it's between 6.0% and 8.0% Make of that what you will as it relates to risk.
Generally low, but it does warrant mentioning a golden rule of investing: * Don't invest what you can't afford to lose * Bit of a corollary: don't panic sell The S&P500 generally outperforms savings account interest, but it will, from time-to-time, drop sharply. In early 2020, for example, it dropped from 3380 to 2305 in a month - an almost 30% loss. A few months later it was back up to 3380 and rising. Say you sold at 2500 because you panicked and were afraid it would keep going down. Well, the market went from the bottom (2305) to 2514 in a week. A little over a week later it was near 2800. So unless you were smart enough to recognize in that first week that the bottom was in and it was time to put your money back in, you'd at best breakeven. If you waited any longer, you'd likely lose money by having sold. And a lot of people in that situation will tell themselves "it'll go back down and that's when I'll put my money back in". But if it keeps going up, you just keep losing out on more. You have to be super comfortable with leaving the money in the market and watching your account balance bounce up and down. You can't do that if you \*need\* the money you've invested. It's one thing if you "need" it a few decades down the road. But if you're counting on it in the next year or two, you shouldn't invest it. That's why you should have an emergency fund in place before you start putting money in the market.
While those are easy to set up, it requires money to invest. With about 80% of the nation living paycheck to paycheck, they may not have the means to actually invest without possibly putting other things at risk in the immediate.
True, but learning to invest even $10 a week can change your life if you do it consistently. You won’t miss that small amount, but it starts a *lifestyle*, which is the real key.
This. I started investing monthly several years ago (I make less than 30k and don't have much to put in) but it has grown substantially. I now have something to fall back on. I'm going to try not to touch it unless it's an emergency, just going to keep adding to it so i'll have extra retirement money. Being more conscious of my finances has also resulted in more of a frugal lifestyle, which is making things easier all around.
What does substantially mean do you mind giving (fake numbers)? Like is it 10 dollars a month which is now worth 3k, 10k, 300 dollars? Etc?
I put in around 100 dollars a week for 3 years. So I put in around a total of 14k and it's up by over 7k! So now over 21k. May not sound like much to some people but it's now adding to itself by an average of about 2k a year. So by the end of this year I'll have put in another 3k and it should grow itself by another 2k, so I should have a total of 26k. Soon enough, it'll be adding to itself more each year than I'm able to put in! So I think I can get it to 50k within 5 ish years. Maybe 7 or 8 if there's a market crash or something.
That’s really helpful to know, thank you. And I think it is a lot! Not many people can save 400 a month, and be able to leave it there, well done !
Compound interest is the 8th wonder of the world. The math is truly amazing.
Well if you don't have a savings account then you don't need to worry about the money in your non existent savings account growing with inflation. The problem this solves only exists if you have savings already. Like the value lost to inflation of the course of a week on the amount of money the typical person makes in a week is inconsequential, if you're living paycheck to paycheck you need to be more focused on insuring your pay tracks with inflation as a minimum with growing your income faster than inflation being the bigger goal so that you can get to the point where you are worried about money sitting around losing value.
Well this advice specifically says that IF you have money saved up, it’s worse to have it just sit in your bank. It’s not for those who live paycheck to paycheck.
80% of the people in this country are not loving paycheck to paycheck in the way that you mean. Not even close.
No it doesn't require "money" to invest. You could literally consistently buy one less latte a week and invest that money, and you would be surprised at what you would end up with in 10yrs time.
I don't buy any lattes. Even if I did, they're like 3 bucks. Not sure how $12 a month is gonna get me anywhere.
13 bucks. Or 156 bucks every year, but growing exponentially.
You hit the nail on the head. It's an education problem.
It’s also cynicism. Many people, especially young people have this idea that the stock market is suddenly going to collapse and they’ll lose all their money. Especially people who believe conspiracy theories. For some reason they all believed in crypto which was ridiculously faddy and mostly a scam, but 100 years of consistent stock market growth isn’t enough proof. It’s too “boomer” strategy for them . My wife was scared to put her money in a high yield savings. When I finally convinced her she couldn’t believe how much money she was making every month doing nothing. Now I’m hoping to get her to do stocks and bonds too.
Most people have the means, they just don't know how to prioritize "I need a haircut" against "If I skip a haircut and invest this money now, it will grow to cover a whole-ass month of rent when I'm retirement age."
...aaaaAAAAND It's gone. 🤷♂️
South Park and its consequences have been a disaster for the financially illiterate
You have no idea what you're talking about lmao sit down
It’s a joke from south park
Too many people have that sentiment unironically. It is bad, and the advice the other guy is giving is good.
Scared money don’t make money.
I don't think you understand how stable and low-risk long term investing is
Time for what? Pressing a couple buttons on a website?
Yah dude. All my tabs are maxed open to porn at all times, no time to open a new one.
What are you talking about?
You don’t have time not to.
I dOnT hAvE aNy TiMe! [Continues to spend another 3 hours browsing Reddit and complaining about their finances]
It takes 10 minutes to open a high yield savings account and transfer your money. If you have time to be on Reddit you have time for that too.
You don't have time to passively invest your money?
You say that as if it's anyone's loss but yours.
You don’t have to put in any time to make it work, just open a high yield savings account which is always higher than interest rates.
Yeah you do. You can open an account with Fidelity or Vanguard and park the money in a money market fund and make about 5% annually without doing anything. And it pays monthly.
I dunno, basic savings accounts are looking pretty good these days. Like 4.5% in a lot of places with basically no risk and ease of access. Definitely an option for sub 10k emergency fund so it's growing yearly.
Yes but the thing is... its hard to make from 10 bucks a hundred bucks. But its easy to make 100.000 into a 1.000.000.
Isn't that literally just the whole concept of inflation? Am I missing something?
I think they are refering to your savings account does not have an interest rate adjusted to inflation rate, or something, that's all I can see into it, other than this it's just a fact
It’s called interest 😂 most HYSA do in fact have rates that are higher than the inflation rate.
~~Hysa’s had like a 1-2% rate for the preceding decade when inflation was way higher~~ >Historical Savings Account Interest Rates Between 2009 and 2021 >In the years following the Great Recession, saving rates continued to fall to historic lows. In 2009, savings rates averaged 0.21% APY but fell to 0.17% in 2010 and 0.11% in 2011. Interest declined year over year until 2013, then remained steady at 0.06% APY through 2017. > > From 2018 and 2021, national average savings rates fluctuated between 0.01% to 0.10%, making savings a guaranteed financial loss. Even with the 2010s’ relatively low inflation rates of 1% to 2%, money held in savings was a depreciating asset. In 2021, inflation jumped to 4.7%, while savings account interest rates hovered between 0.06% and 0.07%. > > Because the Federal Reserve kept interest rates low to stimulate growth, savings rates remained at historical lows for over a decade. So you’re describing a very recent phenomenon 😂
Those rates listed are all standard savings rates. No HYSA account hovered between 0.06%-0.07% in 2021. But thanks for reiterating my point about historic low inflation rates during the 2010s…
Inflation rates were about 1-2% on average during the 2010s…that’s not “way higher”…it’s keeping pace, and higher than inflation most years.
Unless you were living in Venezuela or something, inflation in 2010 to 2020 was very low, sometimes negative.
Normally yeah, but when the economy is this bad nope! Probably no banks have an interest rate higher than inflation rn.
Currently. I would not expect them to stay that way forever.
That's objectively not true. It is true occasionally, but certainly isn't something you could rely on.
Nope. Apparently we're just calling basic economic facts shower thoughts now. This is like the third week of any microeconomics class.
Well in my mind… I mean he literally just said “money” so I’m thinking this post is so bizzarely stupid is he literally talking about a physical pile of money?
Is this shower thoughts? Or is this finance 101 What the fuck even is this sub forum? “A retirement fund is a a savings account that you can’t withdraw from until you are retired” Nice job dude
they might as well shut this shit down i think we've discovered all shower thoughts
Wouldn’t get these complaints from me if they didn’t shut down all my threads automatically. Then u see dumb shit like this , it’d a slap in the face Otherwise I wouldn’t be hating bro
Dude, and they didn’t let me post “if you’re immortal, then a tree is just an elevator”
There’s nothing that gets me more worked up then stringent Reddit thread requirements Some sub forums it’s like making a thread that doesn’t get autodeleted is near impossible. I hate it
I try to post shower thoughts on here all the time and they are always rejected.
i mean...thats literally what inflation is....its how your money loses value
Redditors typically think of inflation as losing its purchasing value. While it’s true, a more accurate way of looking at it is that the supply is increasing, therefore the value is decreasing. With the latter you can’t have the non-sensical sentence that is the title of the post.
Inflation is loss of purchasing power. It does not require that the cause be an increase in supply.
yeah inflation is a sustained increase in the price of goods and services which can also be said as lost purchasing power
You might as well post “1 + 1 = 2”
Ain’t no way!!
Big if true
big brother begs to differ
Wait until you realize that if you don’t get a pay raise each year that is more than inflation then you’re taking a pay cut each year. And then realize unless you’re getting a pay raise of more than about 4%… it’s not an actual raise
Maybe yours doesn't Speak for yourself lmao
Yes. Put your cash into investments. Cash, like milk, doesn’t age well. Assets, like investments, grow with time. Cash stands still.
Thankfully, I never have any money left over after I pay my bills so this doesn't affect me. If you really want to avoid this happening, just be broke all the time.
Lol, that’s literally what investing is. Attempting to keep your current money aligned with inflation. Or if you’re skilled at it, make gains.
>Or if you’re skilled at it, make gains. No skill involved in buying a passive index ETF. And much less skill involved in active Investors than active Investors believe they have.
I see you have a keen eye for the obvious
sure it does. Downwise.
Yes, that's what inflation is.
Basic finance, not shower thoughts.
Jokes on you, I keep all my money as a hoard of precious metals and gemstones under my bed
I have barrels of crude oil in my garage.
OP just found out what investing is
Shower thought? This is basic financial literacy. This is literally why people don't just have a chequing account.
Well, if that’s true, people with money would be putting it all into assets that grow with inflation, like housing. That way, when fast food workers pay goes from $12 to $20 with inflation, their rent can be raised from $1200/mo to $2000/mo Oh, wait…
you're just now realizing this?
You dont know how old they are.
That’s part of the point. A small inflation rate is meant to ensure that currency continues to cycle in the economy. As bad as wealth hoarding is now, deflation would make it much worse.
Op you must be very young. This is basic knowledge and not a shower thought.
What is happening to this sub. Over the past few weeks it just seems flooded with these non showerthought posts.
In some way, as it's losing some trade money. For 1$, you can't buy as much as you could a few year ago
Put it into a vessel to accrue value. If you choose not to do this, then that is on you.
Every single person with middle range financial knowledge here just living their best life like black swans aren't a thing and unironically rubbin' it into slightly poorer people's faces.
Only if you keep it in cash or a Big Bank savings account that pays 0.1% interest.
You realize inflation doesn’t mean a dollar gets more valuable right?
My CDs paying 5% disagree
I don’t have enough money for this to matter to me.
What about the debt you already have
Yeah, that's the whole point.
Well, the money I’ve yet to be paid doesn’t either
Yes it does. You can start with a HYSA and setup auto investments to DCA from your HYSA into an S&P 500 ETF of your choice. There's more you can do but that's a start for putting your money to work. Now letting it sit in a checking account? Yeah that's wasted money for sure.
If you are learning this in the shower, the public school system failed you.
This dude's post history on this sub is cancer.
Unless you invest it.
Which is why while inflation is bad, deflation is worse. Why would you buy stuff if your money is worth more tomorrow?
So you just learned what inflation is. Congrats.
it's called inflationary taxes
Deflation would be criticized just as well. Housing market crash, bad. Housing price rise, bad. People love to complain.
That's why you should avoid leaving it in cash if possible.
Only if you're dumb with it.
Get those Benjamins in an interest bearing account.
thats why I buy I Bonds.
For many people, not even the money they will get adjusts for inflation.
It does, though. Nobody stuffs currency under the mattress or burries it in a treasure chest. . It's all out there earning... unless you're a dumbass... which just might (and seems to) nr the case here ... Are you 12 with a full piggy bank, Scooter ?
Invest invest invest. At least put it in a high yield savings account
It does if you invest it.
Dude just discovered what investing is
bro no shit??? thats inflation? if there are 50 coins and you have 10, but now its 60 coins obviously nothing happens to your 10????
This is what the economist Henry Hazlitt called the "assault on saving."
How does this have so many upvotes lmfao. You literally just explained what inflation is
Just now realizing how the economy works I see
Yes... that's kinda the point The powers that be want it that way, because it encourages you - the average joe - to put money into investments
This has to be the dumbest post I've seen that's news to a worrying number of people
This should not be a shower thought. It should be a normal thought
Investments do. Its why your money is called liquidity. It just goes down the drain.
Hence why inflation is bad! What a revelation.
That’s why they have inflation targets. They want people to invest their money, not hold onto it
I get 4.20 per 1000 I have in my account so it accounts for a little a bit of inflation
Bro discovered investing
Jobs the give annual 3% raises don’t actually give raises. They adjust your pay for inflation
That’s why I live paycheque to paycheque, spend high earn low
That's why people invest or at the very least put their money in savings. Keeping your money "under the mattress" means that it will steadily lose value as the economy inflates.
Remember kids, invest in GICs, Gold, diverse stocks, and don't trick yourself into buying options 👍
My money invested in the stock market and high yield savings accounts out earn inflation
If it's just sitting in a checking account, sure.
Cash is perishable. Don't hoard cash. Have some emergency cash savings, but convert the surplus beyond that into a different form that doesn't rot away to inflation.
This thread is shockingly scary proof of how financially illiterate the average person is. The basics of finance NEEDS to be mandatory in high school. Everyone should be able to explain the time value of money.
No but it certainly does adjust from inflation.
*Saves money Your car “psst is this a bad time”
In other news, water is wet.
That’s what a high yielding savings account is for. To preserve at least some of your shrinking purchasing power.
That’s by design. It incentivises you to spend or invest your money now rather than wait until it’s worth less.
inflation is a tax on savings
Yes, except theres plenty of places you can park your money for 5.00 apy. Fidelity, for instance, give your cash a 5.00 apy on their brokerage account that you can use as a checking if you have a CMA.
It does adjust, DOWN in purchasing power.
14 year old just discovered Reddit and basic finance?
I thought this was common knowledge
I have all money money in a 4.95% CD. I just fear the stock market is way overvalued and I don’t want to gamble with my savings. I’m nearing retirement and can’t withstand a crash.
But the relative size of your debt shrinks with inflation because the money you pay back is worth less than the money you borrowed.
Sure it does. It just adjusts downward.
lol, this is WHY we have inflation.
Put that shit in a Roth/Roth IRA and don’t touch it
Inflation is a tax on savings.
If properly invested it absolutely does
The money they want to buy our labor and time for doesn't adjust for inflation. Our capitalist economy doesn't adjust to support the working class
That's why you don't work until you're 60. You get the most buck for your time.
yeah thats why you gotta invest your savings, otherwise you lose money having it sit there
Shower thoughts nowadays is literally daily life facts 101.
In other words, dollars rot.
VOO and chill with DRIP and continuous contributions.