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

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

#161

Post by Nasrudith »

shadowgovt wrote: post #41
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.

But it's a lesson in the same category as "You'd better learn how to do equations on paper and long form because you won't always have a calculator with you." If the underpinning is obvious bunk, it does nothing to reinforce the desired behavior and can in fact be counterproductive. The reason to do long form math on paper is to get a feeling for the mechanics of math so that you can extrapolate it to more complicate…

Really saving makes sense then in a contextual way of keeping some in case there is something you want. It gets across ideas of opportunity cost.

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

#162

Post by UncleMeat »

nurettin wrote: post #98
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.

While generally true, there's the problem of what to buy and when. Then there's the problem of hindsight and the problem of that one stock everyone thought was going to the moon crashing and burning away your life savings. Then there are strategies and strategies that decide which strategy to apply and when, then you realize it isn't as easy as "just buy stonks".

It is more complicated, but the rule of "if you are more than 10 years from retirement, buy VTI when you have available money" works well for an absolutely huge number of people. You can optimize things, but there are effective strategies that fit on note cards.

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

#163

Post by jjeaff »

kingcharles wrote: post #46
t43562 wrote: post #3

I remember my dad encouraging me to save my dollars and not spend them on choc-99 double ice-creams ($2.13). These were soft whip ice-creams with 2 cadbury's flake chocolates stuck in the side and they seemed like the closest thing to heaven on earth to me. What my dad said seemed logical though and I saved. When I was 16 I had a holiday job that earned me many ice-cream-worths but I kept it - didn't buy a bicycle or…

Funny side note: the State of Illinois spent a decent amount of public funds trying to decide whether to charge me with $100 trillion in currency fraud. The state crime lab said the currency I owned was the "most sophisticated piece of currency forgery" they had ever encountered. It was a single (real) $100 trillion bill from Zimbabwe that I carried in my wallet for fun. I assume they thought for some reason it was U…

That sounds insane. Did no one just do a quick Google search and see that you can buy them all day long all over the internet? I think we need some more details on why they were going through your wallet and how and why they even considered a charge in this case.

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

#164

Post by JumpCrisscross »

markvdb wrote: post #159
JumpCrisscross wrote: post #125

Earlier quoted context omitted.

> 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.

While that has been true for the US the past ~250 years, the US are to some extent an anomaly. Most of the world has seen bond owners get eaten almost completely really. Almost all of Africa, large swathes of Asia, much of Europe including Germany and Russia, most of South America...

> all of Africa, large swathes of Asia, much of Europe including Germany and Russia, most of South America

Were any of these seen, contemporaneously, as low-risk?

The backfire sovereigns in the last 100 years were limited to Austria-Hungary and the Dutch, trading economies derailed by war. The others aren’t trading nations, or were well-established basket cases when they issued their debt.

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

#165

Post by mjochim »

epgui wrote: post #153
capableweb wrote: post #149

Earlier quoted context omitted.

> If you want to win at life, you “save money” by purchasing non-cash assets like stocks. "Win at life" == "save money" == "owning stocks" ??? Winning at life is about everything that is not about money. Winning at life is being able to be happy no matter how much or how little money you have. Sure, up until one point, more money can help you get happier, but if you don't have the baseline happiness, you will never b…

I believe you’re doing what is called an equivocation? (edit: not sure exactly what it’s called, but you’re arguing against something I did not say or mean) We’re talking about money, in a thread about money, on a post about money. At no point did I suggest that money makes unhappy people happy.

It's called a strawman argument.

And I think you did not mean "win at life" in as broad a sense as the other person interpreted it. Either that or you two have very different ideas of what "winning at life" could mean.

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

#166

Post by UncleMeat »

anonporridge wrote: post #108
shadowgovt wrote: post #43

Earlier quoted context omitted.

I hope this works out for you in the long term; BTC isn't the most stable platform, but it could certainly be more stable than some national currencies.

Bitcoin is an unbelievably stable platform with an uptime of 99.98% with only 13 years to draw from. It's been sticking with it's algorithmically defined inflation rate with perfect predictability, unlike any other currency or scarce asset like gold, which depends heavily on incentives to mine and accessible reserves. Don't mistake the volatility of the USD price of bitcoin (which is based on the erratic, unpredictab…

The mathematical certainty of the issuance of BTC won't really mean much if nobody wants to trade it for goods. BTC's volatility is not just volatility w.r.t. USD.

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

#167

Post by PheonixPharts »

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.

> even though the utility function doesn't make a ton of sense.

What if it never makes sense?

One thing I didn't realize until embarrassingly too late in life is that savings should only function as a buffer for emergencies. Anything else is just burning your money since there haven't been savings accounts that consistently beat inflation even in the US.

I was fed these same myths as a kid, and earnestly believed that part of success in life was to have a huge savings account one day. I remember well all those "power of compound interest" talks in grade school, about how working hard and saving was the path to wealth. But that's all a complete myth.

The real irony is that anyone who has built themselves serious amounts of wealth typically does so by making high risk/high reward choices. Teaching kids to play it safe and building saves, different desires to the future etc. doesn't make any sense in the world we live in. It's ultimately bad advice. No one I know who ended up very successful did so by living conservatively and within they're means. They're people who aggressively pursued improving their conditions, often times because they were forced too precisely because they didn't have a savings.

The lesson of "save money, life within your means and make conservative choices" sounds nice, but in the world we live in today this is a recipe for short terms austerity and long term decline.

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

#168

Post by ip26 »

MarkusWandel wrote: post #131

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,…

It's protective against downside, but can constrain your upside. I was raised a saver, and it's been very hard to hire out simple tasks & let go of trifles, which in turn constrains how much time & energy you have to focus on increasing your earnings. As a low earner, it's better to focus on efficiency & DIY, but as a high earner it's irrational to spend an hour getting bent out of shape over a few dollars.

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

#169

Post by markdestouches »

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.

Well, if you are not a professional investor, you'd better stick to savings accounts or invest in a index but not in individual assets. Investing as a non-professional is akin to doing surgery on you own body while not being a surgeon.

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

#170

Post by tmn »

epgui wrote: post #116
logifail wrote: post #114

Earlier quoted context omitted.

> And you definitely don't hold cash. Holding cash has a lot of risk as well (Sorry, genuine questions) risk of what and compared to what?

Risk of loss, theft or physical degradation. Then there’s the costs of holding cash, which are known to give you a negative yield due to inflation (nevermind bank fees or insurance costs, etc)

You hold cash for short or mid term optionality. If you want long term stable store of value buy gold or treasury bills
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