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You can't now due to inflation (and inflation is higher than the gamed CPI). Those dollars you earn at the beginning will be worth pennies when you go to spend

You can't now due to inflation (and inflation is higher than the gamed CPI). Those dollars you earn at the beginning will be worth pennies when you go to spend them. If you had a home you can offset this, but younger people aren't getting on the property ladder anymore due to, you guessed it, inflation. Our money isn't a durable store of value since the gold standard was abandoned, you used to be able to make up for it by investing but the line can't go up forever.

alkonaut 3y ago
> Our money isn't a durable store of value since the gold standard was abandoned Few that save for retirement keep their savings in cash. Most would save in some sort of instrument that would expose them to the stock market, money market, real estate etc. You might not always beat inflation but you also aren't seeing your savings eaten at the rate of inflation. > the line can't go up forever Central banks normally have an inflation goal of 2% meaning they literally want everything to slowly go up, forever. The problems usually occur when it's faster and slower than that...
- willcipriano 3y ago
  > Most would save in some sort of instrument that would expose them to the stock market, money market, real estate etc. The historical returns are a aberration from a high growth world, populations are falling. They won't look like that in the coming decades. > Central banks normally have an inflation goal of 2% 2% CPI. CPI is a political measure first and a scientific measure second, from hedonic quality adjustment, owner imputed rent and the simple fact that most households don't have teams of economists planning their budget in order to maximally limit inflation means its far from a accurate barometer for the experiences of real people in the economy. The single income households of yore had a higher percentage of discretionary income than two income households today. CPI was unable to capture this change and finds those households are wealthier somehow.
  - alkonaut 3y ago
    > high growth world, populations are falling. Apart from some countries with curious and massive drops in fertility coupled with low or no immigratoin, are there any signs that global population is falling rapidly? If anything it seems it's entering a pretty stagnant phase (for example in the US). Of course stagnation might still mean an aging population, which is a problem in some cases especially when it comes to pension systems, but it doesn't magically make the economy stop growing. GDP growth isn't merely population growth.
    - willcipriano 3y ago
      If you look back historically as industrialization took place birth rates plummeted. So far this as been true in every culture that has industrialized. The industrial revolution is ongoing and much of the world will be "modern" within a few decades. Not only that, there is evidence birth rates fell when regions were conquered or captured by the Romans and Greeks. Birth rates fell during the end of golden ages in China, I believe birth rates fell during the renaissance. I believe there is some limiting factor in humans. We paradoxically make more children during bad times and stop producing them when times are good. We wouldn't be alone, crickets have genes that respond to cricket population levels, changing behavior, I think we have something similar. Also lots of environmental stuff is messing with fertility, plastics, etc.
trashtester 3y ago
Bank deposits have had terrible yields over the last generation or so. But even if you place your money at 0% real interest rate, if you spend only 60% of your net income, you will still have enough after 50 years of savign to live another 25-30 years at the same standard of living. And if you put your money in something like global index funds, it would take something like large scale war for it to not give a positive real yield. Even just a 2-3 real interest becomes quite significant if left ot accrue over 50 years.

alkonaut 3y ago

> Our money isn't a durable store of value since the gold standard was abandoned Few that save for retirement keep their savings in cash. Most would save in some sort of instrument that would expose them to the stock market, money market, real estate etc. You might not always beat inflation but you also aren't seeing your savings eaten at the rate of inflation. > the line can't go up forever Central banks normally have an inflation goal of 2% meaning they literally want everything to slowly go up, forever. The problems usually occur when it's faster and slower than that...

willcipriano 3y ago
> Most would save in some sort of instrument that would expose them to the stock market, money market, real estate etc. The historical returns are a aberration from a high growth world, populations are falling. They won't look like that in the coming decades. > Central banks normally have an inflation goal of 2% 2% CPI. CPI is a political measure first and a scientific measure second, from hedonic quality adjustment, owner imputed rent and the simple fact that most households don't have teams of economists planning their budget in order to maximally limit inflation means its far from a accurate barometer for the experiences of real people in the economy. The single income households of yore had a higher percentage of discretionary income than two income households today. CPI was unable to capture this change and finds those households are wealthier somehow.
- alkonaut 3y ago
  > high growth world, populations are falling. Apart from some countries with curious and massive drops in fertility coupled with low or no immigratoin, are there any signs that global population is falling rapidly? If anything it seems it's entering a pretty stagnant phase (for example in the US). Of course stagnation might still mean an aging population, which is a problem in some cases especially when it comes to pension systems, but it doesn't magically make the economy stop growing. GDP growth isn't merely population growth.
  - willcipriano 3y ago
    If you look back historically as industrialization took place birth rates plummeted. So far this as been true in every culture that has industrialized. The industrial revolution is ongoing and much of the world will be "modern" within a few decades. Not only that, there is evidence birth rates fell when regions were conquered or captured by the Romans and Greeks. Birth rates fell during the end of golden ages in China, I believe birth rates fell during the renaissance. I believe there is some limiting factor in humans. We paradoxically make more children during bad times and stop producing them when times are good. We wouldn't be alone, crickets have genes that respond to cricket population levels, changing behavior, I think we have something similar. Also lots of environmental stuff is messing with fertility, plastics, etc.

trashtester 3y ago

Bank deposits have had terrible yields over the last generation or so. But even if you place your money at 0% real interest rate, if you spend only 60% of your net income, you will still have enough after 50 years of savign to live another 25-30 years at the same standard of living. And if you put your money in something like global index funds, it would take something like large scale war for it to not give a positive real yield. Even just a 2-3 real interest becomes quite significant if left ot accrue over 50 years.