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whether there is high or low interest rates, property is still (and probably always will be) unaffordable to me. but at least with high interest rates my savin
by 5350-uiop-1130 3y ago
whether there is high or low interest rates, property is still (and probably always will be) unaffordable to me.
but at least with high interest rates my savings seem to have more value.
- nightski 3y agoSince interest rates are usually used to fight inflation, and inflation often is higher than interest rates, no your savings account generally does not have more value.
- 5350-uiop-1130 3y agoso with zero interest rates my savings are worth more over time? isn't low/zero interest rates what got us into this high inflation problem in the first place? cheap loans makes it easier for the wealthy to take loans and buy up more property and so on.
- nightski 3y agoNo, your savings are only worth more over time if interest rates are greater than inflation. It doesn't matter if the are low or high in this case, just that they beat inflation. This is practically never the case, because the market would never hand out such arbitrage. I'm speaking about risk free interest rates in a traditional savings account (because that is what it sounded like you are referring to). The only way you can beat inflation is by taking on more risk such as investing in the stock market, or yes real estate (which is a risk, even for those wealthy people).