5 ms·
What’s the best way to protect your money and your young kids savings account from inflation?
by Flatcircle 5y ago
What’s the best way to protect your money and your young kids savings account from inflation?
- ihsw 5y agoPut it in index funds. If possible, put it in tax-advantaged accounts.
- SavantIdiot 5y agoThis is the only correct answer. The only strategy that works though tough times is diversification and holding. With low-cost ETFs and municipal funds that pay tax free dividends, there is enough to be safe and smart. People recommending bonds, gold, penny stocks, and now crypto are the same armchair investors I've been hearing squwak useless tips from the sidelines for almost four decade.
- omilu 5y agoSo selling stocks in order to have more cash in anticipation of a market correction is the wrong strategy??
- omalleyt 5y agoYou don’t want cash during inflation. You want hard assets. Precious metals and real estate.
- Jommi 5y agoWhen do you know that the market correction has happened?
- SavantIdiot 5y ago> in anticipation of a market correction is the wrong strategy You still don't quite get it: you're playing the market with this statement. Unless you're a "Big Swinging Dick" (the Salomon Brother's term in Liar's Poker for people that did a million or more a day, which is peanuts today) or on the NYSE trade-floor it ain't gonna happen. The vast majority of people I've known who believed this failed to anticipate and should have just held. But don't let me stop you, go right ahead and gamble away.
- throw0101a 5y agoSitting on the sidelines is a good way to lose money: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... The (US) market goes up around 70% of the time, so by being in cash you're missing a rising tide. Every day/week/month/quarter you're not in the market is a time period that you'll have to Buy High/er (instead of Buy Low/er) eventually compared to jumping in and staying in earlier. If you want, you can perhaps hold 20% bonds to (a) reduce volatility and (b) have something you can liquidate generate cash to Buy Low on the dip.
- prepend 5y agoBuy a house? Or I suppose any appreciating assets.
- throwaway0a5e 5y agoHouses and land don't really appreciate unless there's some factor constraining supply in the face of stable high demand for example waterfront property within reasonable distance of major cities, land in a city that's full of morons who vote for regressive policies that limit development, the land has an industrial facility on it that couldn't be built today but is grandfathered in, etc. etc. Also, housing is highly inflated right now. By buying you're buying into a bubble and betting that the inflation will outrun the pop.
- heleninboodler 5y agoI think it's less "things that appreciate" than "things you buy at today's prices and pay for over the next 30 years" that makes real estate attractive when there's inflation.
- prepend 5y agoThey do during inflation. Inflation is just dollars being worth less so any asset with value (typically ones that appreciate) will increase roughly in track with inflation. So the value stays the same but the number of dollars go up. This is separate from housing prices being higher and in a bubble, etx
- heymijo 5y agoHousing is madness right now. I’m in a neighborhood under construction. It cost about $5xxk to build one a year and a half ago. One of those homes went on the market this weekend for $750k. One day bidding war and it sold for $820k. I have no idea what to make of this
- sjg007 5y agoI don't know who or how they have enough money.
- bopbeepboop 5y agoThere isn’t one. The government decided to loot the middle class and hand it to the elite, with trillions stolen in the past year. Your children’s future was destroyed using the COVID lockdown as a pretense for the theft. At this point, the only fix is wiping out a lot of current, ill-gotten wealth/debt.
- gnodar 5y agoI don't know about the best way, but one way to protect against inflation, without concerning yourself with outpacing it, is to purchase TIPS. https://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm https://www.treasurydirect.gov/indiv/products/prod_tips_glan...
- jldugger 5y agoBear in mind that TIPS can go negative too: https://www.thebalance.com/why-are-tips-yields-negative-416876 https://www.thebalance.com/why-are-tips-yields-negative-4168... This means you will still lose money relative to inflation, just with tigher bounds.
- throwaway0a5e 5y agoWhile it certainly provides some hedge inflation adjusted bonds don't seem that helpful when the government can pick and choose what's in the basket of goods the government uses to calculate inflation to get the number it wants.
- omalleyt 5y agoThat’s putting a lot of faith on the gov’t to correctly report CPI, when they have every incentive to underreport it. In fact, they’ve changed the CPI methodology twice in order to report lower average inflation (under the premise that the old measures “overstated” inflation).
- gruez 5y ago>In fact, they’ve changed the CPI methodology twice in order to report lower average inflation (under the premise that the old measures “overstated” inflation). Source?
- tylerjaywood 5y agoThere are numerous. Google search “hedonic adjustment CPI”
- rawtxapp 5y agoIt probably won't be popular here, but allocating a small % to Bitcoin. And assets, stocks, real estate.
- omalleyt 5y agoGold.
- arthurcolle 5y agobitcoin
- timbit42 5y agoHave you compared the change between Bitcoin and Ethereum in the past 12 months?
- arthurcolle 5y agoI actively trade these assets, what are you trying to say? Are you talking about relative outperformance?
- vonwoodson 5y ago[“As someone who made money off GameStop, Dogecoin, and a lottery ticket this year, the best financial advice I can give you is to just be a f-ing idiot.”](https://www.instagram.com/p/COdE0p1Lh6H/?utm_source=ig_embed&ig_mid=FB7AA8E1-1D14-4DF8-8302-915132DEDD27 https://www.instagram.com/p/COdE0p1Lh6H/?utm_source=ig_embed...)
- milkytron 5y agoIs there a non instagram link for this? I can't view it without being logged in.
- spoonjim 5y agoBuy the most expensive house/s you can get a mortgage for. Put the rest of your savings into a mix of equities.
- derekp7 5y agoWhat about keeping your primary residence's mortgage to something low enough that you could reasonably cover with an easily obtainable emergency fund. Then include unimproved (or improved) land with no buildings on them in your asset mix. The main thing that increases with housing is the land that the house sits on. With no house, you can hold the land without any maintenance costs. Unimproved land has lower taxes. Of course, in this case you are using land as a store of value. What is better is an asset that returns value without having to sell off pieces of it. So land with a rent-able building on it can be both a store of value and a true investment (that returns monthly dividends). But it also comes with upkeep costs and risk.
- spoonjim 5y agoAlmost impossible to get a mortgage for unimproved land.
- robjan 5y agoThis works until the interest rates rise resulting in falling house prices and possible negative equity.
- tylerjaywood 5y agoTo a point, stocks and other liquid dollar-denominated assets. After that point, who knows. Precious metals? Depends on how bad things get. The biggest winners in hyper-inflation are those holding the biggest debts
- briefcomment 5y agoDon't store wealth in USD. Store it in scarce things.
- deleted 5y ago[deleted]