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the perils of saving

Started by Steve @ bripblap · 10 months ago

As I tend to do, I’m going to throw out a few statistics from memory and not back them up with links. As part of my 6-posts-in-one-day project, this is post #3.  Today one of my coworkers asked me about my high-yield savings account, since he was keeping his cash in one of ... Continue reading »

3 comments

  • Curmudgeon

    10 months ago

    You know, Steve, the inflation rate is a funny thing. The prototypical "basket of goods" used to calculate it fails to take into account choices we can freely make - switching brands, moving to generics, substituting, not buying an optional product, and things like that. We treat it like it's immutable, even though we have a good deal of control over our personal inflation rate. I never worry about "beating inflation" with investments, because there are so many other things I can do to mitigate its effects.

    Plus, if I have more money in savings/investments than I spend, my absolute gain can easily be greater than the percentage lost through inflation (you're a mathematician, Steve, you understand that). I still make out on absolute terms, which especially for the short term is arguably more important.
    reply
  • FFB

    10 months ago

    Are you saying it's not worth moving money to a high yield savings account from a low yield brick and mortar account? If your choices are between the two then the high yield is still better even with inflation. If the choice is a savings account versus a different investment that can exceed inflation then yeah, you can do better.

    Where would be better in today's economy to put emergency savings?
    reply
  • deepali

    10 months ago

    sooo... instead of losing money in the high-yield savings account, he's going to lose it in the low-yield account. :)

    inflation is tricky though, as curmdugeon noted. my "basket of goods" changes based on what I can buy for X amount of dollars. and X changes based on how much I want to spend.
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