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There's no such thing as 7% yearly interest without risk. It just doesn't exists. If you look at government bonds (a.k.a. TBills), they'll tell you exactly how
by orp 18y ago
There's no such thing as 7% yearly interest without risk. It just doesn't exists.
If you look at government bonds (a.k.a. TBills), they'll tell you exactly how much interest a truly risk free investment is worth (in yearly interest). Anything higher then that is risky, by definition.
On top of that, you have to factor in inflation.
In other words, it's good to save money, but managing saved money is hard. Be ready for that.
- wmorein 18y ago"If you look at government bonds (a.k.a. TBills), they'll tell you exactly how much interest a truly risk free investment is worth" That used to be true, but it isn't strictly true any more. The Credit Default Swaps for US Treasuries are priced to imply that you need to subtract around 1/10 of a percent (100 basis points) from the yield to get the real risk free rate. See http://www.fxstreet.com/fundamental/analysis-reports/sunrise-market-commentary/2009-02-26.html http://www.fxstreet.com/fundamental/analysis-reports/sunrise...