The money I saved as a child would buy one picogram of gold today • Hacker News Board

Re: The money I saved as a child would buy one picogram of gold today

#131

Post by MarkusWandel » Sun, Apr 17, 2022, 8:22 PM UTC

The point missed in most save/invest vs. spend arguments is this:

If you've been raised to be a saver, you are well trained at living cheaper/less frivolously. Note that this presupposes that you make enough money to live reasonably and save; I'm not talking about the extreme poverty cases where immediately spending the rare windfall actually makes sense.

By cheaper, I mean one car instead of two, simpler vacations, less eating out, less fancy house, "using up" quality consumer goods instead of constantly replacing them with the latest fashionable stuff (e.g. second complete kitchen makeover in 15 years).

Suppose person A makes X and spends X and saves nothing. Person B makes the same, but spends 0.5X and saves 0.5X. Now suppose an economic disaster where all those savings are wiped out and A and B additionally end up taking a 50% pay cut. Who will continue to live in comfort, albeit with misgivings about not being able to save up again?

Re: The money I saved as a child would buy one picogram of gold today

#132

Post by albntomat0 » Sun, Apr 17, 2022, 8:25 PM UTC

datadata wrote: post #76

UncleMeat wrote: post #34

Earlier quoted context omitted.

That would be true if the only way to create a failed currency was to print it to death. But we've observed cryptocurrencies with mining caps collapse to $0 in the same way as a fiat currency.

Fair to say bitcoin fixes this particular large and important class of currency failure, by taking away the power to print it to death?

That it does, but I understand that Bitcoin's deflationary by default nature has also been criticized.

Bitcoin also adds new failure cases such as irreparably losing money through address typos and lost/failed hard drives, not to mention the numerous & exciting failures in DeFi.

Re: The money I saved as a child would buy one picogram of gold today

#133

Post by dukeofdoom » Sun, Apr 17, 2022, 8:25 PM UTC

Saving and buying collector edition video games might be a good purchase for a kid that might pay off later. A corvette might be a good investment too, if they stop making gasoline cars in the near future.

Re: The money I saved as a child would buy one picogram of gold today

#134

Post by UncleMeat » Sun, Apr 17, 2022, 8:26 PM UTC

datadata wrote: post #76

UncleMeat wrote: post #34

Earlier quoted context omitted.

That would be true if the only way to create a failed currency was to print it to death. But we've observed cryptocurrencies with mining caps collapse to $0 in the same way as a fiat currency.

Fair to say bitcoin fixes this particular large and important class of currency failure, by taking away the power to print it to death?

Yes, while introducing a host of other very serious problems.

Re: The money I saved as a child would buy one picogram of gold today

#135

Post by plandis » Sun, Apr 17, 2022, 8:27 PM UTC

epgui wrote: post #33

Taek wrote: post #12

Earlier quoted context omitted.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

> If you want to win at life, you “save money” by purchasing non-cash assets like stocks

Just be born wealthy enough to have free money to invest as a child!

Re: The money I saved as a child would buy one picogram of gold today

#136

Post by foobarian » Sun, Apr 17, 2022, 8:28 PM UTC

Taek wrote: post #12

Certhas wrote: post #8

Earlier quoted context omitted.

As a childhood lesson you don't need crazy inflation for this to hold true though. Anything that takes more than a few of months to save up to just doesn't make sense as a kid. Your disposable income goes up by factors of ten every few years. You have 2$ to spend at 5, 20$ at 10, 200$ at 15. Then it slows down but you might still get to 2000$ at 25. Saving as a kid really never seemed worth it to me.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

Perhaps we're getting a lot of that lesson from games like Royale High in Roblox. I was amazed at what a detailed budget/spending plan the kid wrote up in her journal for all the things she was hoping to buy for the in-game currency. And how many days it would take her to save up for it. Oh well, at least the inflation or opportunity loss from not investing is not as much of a factor there.

Re: The money I saved as a child would buy one picogram of gold today

#137

Post by cat_plus_plus » Sun, Apr 17, 2022, 8:28 PM UTC

epgui wrote: post #33

Taek wrote: post #12

Earlier quoted context omitted.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

Depends how much money and for how long. Saving dollar bills for a coffee maker rather than buying a cup of Starbucks is a good start if that's your current station in life. If the market takes a dive and you don't have cash equivalents, you have to sell at a loss to cover your living expenses and can't buy more stock to capitalize on eventual recovery. Maybe a credit union checking account that pays a little interest is not so bad for someone with limited time / knowledge to manage too many types of assets?

Re: The money I saved as a child would buy one picogram of gold today

#138

Post by rileymat2 » Sun, Apr 17, 2022, 8:31 PM UTC

JumpCrisscross wrote: post #125

epgui wrote: post #33

Earlier quoted context omitted.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

> you “save money” by purchasing non-cash assets like stocks Bonds aren’t great for building wealth. But they’re fine for preserving it. Saving money via a mix of inflation-indexed and fixed-yield debt will generally preserve your purchasing power over long time intervals.

There should be a giant disclaimer, this somewhat true for inflation indexed bonds, if you can hold bonds to the maturity date. If not, all bets are off.

Re: The money I saved as a child would buy one picogram of gold today

#139

Post by Sebguer » Sun, Apr 17, 2022, 8:31 PM UTC

ghaff wrote: post #106

MerelyMortal wrote: post #101

Earlier quoted context omitted.

On reddit, I'm seeing people hoard coins because they believe the metal it is made of is more valueable than the currency it represents.

In some cases, that may be technically true but I suspect that the costs of turning bags of pennies into cash that is > than the face value of the pennies is iffy at best.

It's also illegal to melt down pennies or nickels, which are the coins where the margins are closest: https://www.federalregister.gov/documents/2007/04/16/E7-7088...

Re: The money I saved as a child would buy one picogram of gold today

#140

Post by ozim » Sun, Apr 17, 2022, 8:31 PM UTC

epgui wrote: post #33

Taek wrote: post #12

Earlier quoted context omitted.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

Because most of people can only do that. So saving small amounts of money to build up some buffer.

When you have a buffer only then you can start buying assets.

Until web brokers started I did not even know how to buy stocks. I think most people still don't know how to buy stocks unless they are from really well-off family.

My parents were also not "financially literate" so I had to figure out all kind of stuff on my own.

Downside was for example that I got supper shitty "investment product" so I did not loos much money but if I knew better I would put my money in a better place.

Fortunately I did not get outright scammed but for a lot of people that have to learn as they go it is a real risk so "just saving" and losing some value to inflation might be best option for many.