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> This is disingenuous advice considering all financial vehicles for savers have been gutted. When you say "all financial vehicles for savers", you're really j

> This is disingenuous advice considering all financial vehicles for savers have been gutted. When you say "all financial vehicles for savers", you're really just referring to liquid savings products tied to the federal funds rate, right? Of course when the government stops handing out money to savings account holders, savings account holders will no longer be making money. Corporate bonds are an alternative way to earn some interest in a low-rate environment without owning stocks. Also, REITs are an affordable way to gain exposure to real estate without a minimum buy-in. For people who need real estate exposure but can't afford to buy a whole building, they are really underrated. Finally, the market is pricing in several rate hikes this year, so your savings account interest rate may actually be revived soon anyways.

discardedrefuse 5y ago
Yes, I am kinda referring to liquid savings products. But it doesn't have to be just that. I think people need simple products that aren't tied to all the shenanigans that go down on wall street. Which is really nothing right now; not even real estate. Someone mentioned TIPS below, but its kinda complicated and not very liquid (5 year maturity, secondary market). I've been watching the rate hikes. The cynic in me says borrowing rates will rise, but consumer savings rates will not rise in step, nor will housing prices fall accordingly. But I guess we'll see.
- everfree 5y ago
  US savings accounts is a very competitive industry that's traditionally been very responsive to underlying rates changes. All it takes is for a single bank to decide to raise their consumer rates in response to the rates they're turning around and getting from the fed (more accurately the inter-bank lending rates, but the fed has tight control over that market). I agree that it would be great to add more simple savings products, but you have to ask the question of where the yield will come from. If yields don't come from the fed (dictating inter-bank lending rates), and they don't come from the private sector (wall st), then where else can yields come from? What novel yield stream could a new savings product be built on? At the end of the day, people wake up and go to their jobs to produce things, and every penny you earn in value in a savings account (past inflation) has to ultimately come from them, but not until it filters through the wall st machine.

discardedrefuse 5y ago

Yes, I am kinda referring to liquid savings products. But it doesn't have to be just that. I think people need simple products that aren't tied to all the shenanigans that go down on wall street. Which is really nothing right now; not even real estate. Someone mentioned TIPS below, but its kinda complicated and not very liquid (5 year maturity, secondary market). I've been watching the rate hikes. The cynic in me says borrowing rates will rise, but consumer savings rates will not rise in step, nor will housing prices fall accordingly. But I guess we'll see.

everfree 5y ago
US savings accounts is a very competitive industry that's traditionally been very responsive to underlying rates changes. All it takes is for a single bank to decide to raise their consumer rates in response to the rates they're turning around and getting from the fed (more accurately the inter-bank lending rates, but the fed has tight control over that market). I agree that it would be great to add more simple savings products, but you have to ask the question of where the yield will come from. If yields don't come from the fed (dictating inter-bank lending rates), and they don't come from the private sector (wall st), then where else can yields come from? What novel yield stream could a new savings product be built on? At the end of the day, people wake up and go to their jobs to produce things, and every penny you earn in value in a savings account (past inflation) has to ultimately come from them, but not until it filters through the wall st machine.