brip blap - Latest Comments in the perils of saving

Re: the perils of saving

deepali — Wed, 20 Aug 2008 12:02:23 -0000

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.

Re: the perils of saving

FFB — Wed, 20 Aug 2008 11:58:21 -0000

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?

Re: the perils of saving

Curmudgeon — Wed, 20 Aug 2008 11:58:07 -0000

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.