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> As much as everyone likes to discredit traditional values, such savings and thrift, they win out in the long run. Are those 'traditional values' still releva

by Aaargh20318 5y ago

> As much as everyone likes to discredit traditional values, such savings and thrift, they win out in the long run. Are those 'traditional values' still relevant in today's economy ? For example: > taking advantage of compounding interest. In my savings account, interest is set at 0.01% for accounts with less than €100k in them, and for accounts with more than €100k the interest is -0.5%. Yes, that's negative interest. So if you're saving up each year, you start losing money, not making it.

lixtra 5y ago
Did you miss the reference to John Boggle? Did he recommended to put the majority of your assets in a savings account?
- Aaargh20318 5y ago
  Returns on my investments (through both my mortgage and pension) are negligible as well, and considerably more risky.
  - zhdc1 5y ago
    Most pensions aren’t going to give you more than 1-2% over the risk free rate. You’re better off aiming to save another x% more of your after tax income and investing through your pillar 3 equivalent (IRA in the states) and, once your tax advantaged plans are maxed, through your own account.
  - horrified 5y ago
    MSCI world hat positive returns in all but three years since 2007: https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be... Granted the -40% in 2008 were brutal, but even that would have been compensated in a few years.
sokoloff 5y ago
If you’re saving for some purpose more than five years out, putting the money into a productive asset (most commonly stock of one or more companies) will beat inflation handily over time. It’s still using the power of compound interest; it’s just not using a passbook savings account.
smcameron 5y ago
Use the stock market, not the bank.
zhdc1 5y ago
Don’t put your money in low interest savings accounts. You can average 7.5-10.5% a year by investing in low fee index funds. Even with the market as inflated as it is, you should still see returns significantly higher than what you will get from a bank.

lixtra 5y ago

Did you miss the reference to John Boggle? Did he recommended to put the majority of your assets in a savings account?

Aaargh20318 5y ago
Returns on my investments (through both my mortgage and pension) are negligible as well, and considerably more risky.
- zhdc1 5y ago
  Most pensions aren’t going to give you more than 1-2% over the risk free rate. You’re better off aiming to save another x% more of your after tax income and investing through your pillar 3 equivalent (IRA in the states) and, once your tax advantaged plans are maxed, through your own account.
- horrified 5y ago
  MSCI world hat positive returns in all but three years since 2007: https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be... Granted the -40% in 2008 were brutal, but even that would have been compensated in a few years.

sokoloff 5y ago

If you’re saving for some purpose more than five years out, putting the money into a productive asset (most commonly stock of one or more companies) will beat inflation handily over time. It’s still using the power of compound interest; it’s just not using a passbook savings account.

smcameron 5y ago

Use the stock market, not the bank.

zhdc1 5y ago

Don’t put your money in low interest savings accounts. You can average 7.5-10.5% a year by investing in low fee index funds. Even with the market as inflated as it is, you should still see returns significantly higher than what you will get from a bank.