5 ms·

Do you consider loosing half your long term savings within 24-36 years modest and stable?

lotsofpulp 2y ago
Long term savings shouldn’t be in cash. Throw it in VT, VTI, VOO, or even a target date fund, and you’ll keep up with inflation.
- lurking15 2y ago
  they shouldn't be in the market either, they should be on a non-productive store of wealth that people could depend on and isn't hitched to Congress's penchant for debasing money and arbitrarily manipulating the economy through fueling consumerism
toomuchtodo 2y ago
I don't lose it because I invest my savings in assets that grow at a rate faster than inflation. Inflation encourages investment, vs hoarding cash with an expectation that paper is going to hold value into the future. It's just paper, it has no productive value. Currency transfers value, assets hold value. TLDR Accumulate assets at favorable prices to invest for your future. https://academic.oup.com/qje/article/134/3/1225/5435538 https://academic.oup.com/qje/article/134/3/1225/5435538
dsr_ 2y ago
What interest rate are you assuming on savings and investments, and why is it less than the historical average?
deleted 2y ago
[deleted]
ajross 2y ago
Your "long term" savings is in cash? Because if it's not, it's in assets of some form or another, and assets inflate along with the rest of the economy.
- lostmsu 2y ago
  Inflation does not imply economic growth in real terms.
dbdidksanaidbd 2y ago
All the sibling comments snarkily asking why you don’t invest your money is mind blowing to me. Are we all so conditioned that we can’t see the insanity behind being forced to invest the results of your labor or you’re poor? It is a tax on living that does not need to exist, and the end result is it disproportionately benefits the capital class. Incredible how the elites have conditioned us to encourage systems that impoverish us.
- Balgair 2y ago
  The way I have heard it explained is that a general low level inflation is more aimed at the rich than the poor. In that, if you look at the total money supply, most of it is in the hands of the rich, almost by definition. So, if you have no inflation, or even deflation, then the rich just sit on their gold like dragons. It stays with them and doesn't circulate. The only change is really for gambling debts and having kids. It's not actually useful as a method of exchanging goods and services. But if you inflate away the dragon's gold, then these rich asshats are pretty much forced to find ways to beat that inflation, just to stay stable. So, they go out and invest the money in gold mines and dunny roll companies. The rich then find out that they can actually make their gold piles larger than the inflation rate, sometimes. That investment ends up being good for the poor as the rich have to give them jobs and these jobs pay wages and then you get the consumer economy of Henry Ford paying workers enough to buy the cars they are making (likely apocryphal). So, money then is flowing and not just sitting there. Which is kinda the point of money in the first place. In general, inflation is about the rich. It just so happens that a side effect of inflation happens to mostly be good for the poor too. A very very rare win-win situation. Or so the rich asshat tell me.
  - lotsofpulp 2y ago
    Your whole comment shows the goal is to maintain the socioeconomic order of those with assets (regardless of how they were obtained) maintaining greater purchasing power over those with fewer assets, even though simply hoarding assets provides zero utility to society, whereas having fewer assets but actually working provides utility to society. A simple power law land value tax would limit the dragon from hoarding gold and incentivize working rather than hoarding. Instead, we have the exact opposite. We tax working via earned income taxes, and have lower capital gains tax rates. And we bail out asset owners time and time again, but when wages don’t keep up, it’s crickets. In a way, it is also a way for old people to maintain their power, after their physical power declines. Things are hunky dory as long as economic growth is achieved, but if population dynamics are changing, then we’re in for some drama. The battle lines are not just rich v poor, but old v young, especially in democracies. See the most recent proposal to court votes by removing income tax from social security income.
deleted 2y ago
[deleted]

Long term savings shouldn’t be in cash. Throw it in VT, VTI, VOO, or even a target date fund, and you’ll keep up with inflation.

lurking15 2y ago
they shouldn't be in the market either, they should be on a non-productive store of wealth that people could depend on and isn't hitched to Congress's penchant for debasing money and arbitrarily manipulating the economy through fueling consumerism

toomuchtodo 2y ago

I don't lose it because I invest my savings in assets that grow at a rate faster than inflation. Inflation encourages investment, vs hoarding cash with an expectation that paper is going to hold value into the future. It's just paper, it has no productive value. Currency transfers value, assets hold value. TLDR Accumulate assets at favorable prices to invest for your future. https://academic.oup.com/qje/article/134/3/1225/5435538 https://academic.oup.com/qje/article/134/3/1225/5435538

dsr_ 2y ago

What interest rate are you assuming on savings and investments, and why is it less than the historical average?

deleted 2y ago

[deleted]

ajross 2y ago

Your "long term" savings is in cash? Because if it's not, it's in assets of some form or another, and assets inflate along with the rest of the economy.

lostmsu 2y ago
Inflation does not imply economic growth in real terms.

dbdidksanaidbd 2y ago

All the sibling comments snarkily asking why you don’t invest your money is mind blowing to me. Are we all so conditioned that we can’t see the insanity behind being forced to invest the results of your labor or you’re poor? It is a tax on living that does not need to exist, and the end result is it disproportionately benefits the capital class. Incredible how the elites have conditioned us to encourage systems that impoverish us.

Balgair 2y ago
The way I have heard it explained is that a general low level inflation is more aimed at the rich than the poor. In that, if you look at the total money supply, most of it is in the hands of the rich, almost by definition. So, if you have no inflation, or even deflation, then the rich just sit on their gold like dragons. It stays with them and doesn't circulate. The only change is really for gambling debts and having kids. It's not actually useful as a method of exchanging goods and services. But if you inflate away the dragon's gold, then these rich asshats are pretty much forced to find ways to beat that inflation, just to stay stable. So, they go out and invest the money in gold mines and dunny roll companies. The rich then find out that they can actually make their gold piles larger than the inflation rate, sometimes. That investment ends up being good for the poor as the rich have to give them jobs and these jobs pay wages and then you get the consumer economy of Henry Ford paying workers enough to buy the cars they are making (likely apocryphal). So, money then is flowing and not just sitting there. Which is kinda the point of money in the first place. In general, inflation is about the rich. It just so happens that a side effect of inflation happens to mostly be good for the poor too. A very very rare win-win situation. Or so the rich asshat tell me.
- lotsofpulp 2y ago
  Your whole comment shows the goal is to maintain the socioeconomic order of those with assets (regardless of how they were obtained) maintaining greater purchasing power over those with fewer assets, even though simply hoarding assets provides zero utility to society, whereas having fewer assets but actually working provides utility to society. A simple power law land value tax would limit the dragon from hoarding gold and incentivize working rather than hoarding. Instead, we have the exact opposite. We tax working via earned income taxes, and have lower capital gains tax rates. And we bail out asset owners time and time again, but when wages don’t keep up, it’s crickets. In a way, it is also a way for old people to maintain their power, after their physical power declines. Things are hunky dory as long as economic growth is achieved, but if population dynamics are changing, then we’re in for some drama. The battle lines are not just rich v poor, but old v young, especially in democracies. See the most recent proposal to court votes by removing income tax from social security income.

deleted 2y ago

[deleted]