Why Saving is for Suckers
articles.moneycentral.msn.com
Why Saving is for Suckers
1–10 of 43 posts
Re: Why Saving is for Suckers
#2I was totally expecting this to be something about automatically-persisting document interfaces.
Re: Why Saving is for Suckers
#3I agree with the math in the article as well as the fact that interest paid on liquid accounts is rather low. The author suggests that higher interest can be returned by investing in a domestic stock index.
The author ignores one very important concept faced by individuals: risk. It would be just plain stupid for most people to keep an emergency fund in the stock market. At the same time, it would also be stupid for a person to keep long term investments in a low interest savings account.
It would be a mistake to conflate these two goals while ignoring risk.
Re: Why Saving is for Suckers
#4author of article is kind of an idiot. you too can buy us bonds (the 4% he refers to) you just are locked in for 30 years. banks give you less yield because you can get your money out quickly.
what he should say is that the us govt programs to support the market are really used to prop up bank earnings through the yield curve instead of a direct recapitalization. an individuals choice not to save does nothing to "screw the man."
Re: Why Saving is for Suckers
#5To say that savings is for suckers is to downplay the role that banks have played in making savings such a bad thing nowadays. Why save your money when you can invest in a mutual fund, right? Then the banks can trade away your money, misspend it, lose it, and get bailed out, while you're left with nothing to show for it.
You hear all this noise about companies going bankrupt, people going broke, and living paycheck to paycheck. If financial regulations made saving a little more attractive, instead of encouraging everyone to channel their money (borrowed or not) into risky investments - or even investments that seem stable, but end up being part of some larger fraud - maybe we wouldn't be in as bad a mess as we've been through.
Re: Why Saving is for Suckers
#6I agree with the math in the article as well as the fact that interest paid on liquid accounts is rather low. The author suggests that higher interest can be returned by investing in a domestic stock index. The author ignores one very important concept faced by individuals: risk. It would be just plain stupid for most people to keep an emergency fund in the stock market. At the same time, it would also be stupid for…
A pure cash investing strategy (money market, CD, T-Bill/Bond) now has a track record as good as the US stock market over 30 year periods. Except the much lower volatility of cash makes it superior.
Plowing money into stock indexes is for suckers. To get any decent returns one is forced to analyze macro economic conditions and allocate accordingly between cash, equities, and inflation/currency hedges. The article makes this point in different words.
Re: Why Saving is for Suckers
#7I agree with the math in the article as well as the fact that interest paid on liquid accounts is rather low. The author suggests that higher interest can be returned by investing in a domestic stock index. The author ignores one very important concept faced by individuals: risk. It would be just plain stupid for most people to keep an emergency fund in the stock market. At the same time, it would also be stupid for…
Right. Putting all your eggs in one basket is for suckers.
Keep some of your eggs in the fridge. They won't hatch many chickens, but they're unlikely to get eaten by foxes, either.
Nothing to see here. Move along.
Re: Why Saving is for Suckers
#8author of article is kind of an idiot. you too can buy us bonds (the 4% he refers to) you just are locked in for 30 years. banks give you less yield because you can get your money out quickly. what he should say is that the us govt programs to support the market are really used to prop up bank earnings through the yield curve instead of a direct recapitalization. an individuals choice not to save does nothing to "scr…
What's worse is that point--that banks profit off spreads--doesn't actually do harm to consumers. It's the long-term lending, short-term borrowing structure of banks that enables them to offer higher interest rates than the market short-term interest rates. That's how banks came about: people got higher interest by pooling their money with money-lenders than they did lending money themselves. Both the consumers and the bankers capture some surplus. Welcome to free trade.
You don't have to take my word for it. Compare the rates on short to medium-term CDs with the rates offered by Treasuries. Both of these have the same risk to the consumer, but which offer higher interest?
(Some CDs have excessive withdrawal penalties. Go to a bank that doesn't have this, or use brokered CDs.)
Re: Why Saving is for Suckers
#9I agree with the math in the article as well as the fact that interest paid on liquid accounts is rather low. The author suggests that higher interest can be returned by investing in a domestic stock index. The author ignores one very important concept faced by individuals: risk. It would be just plain stupid for most people to keep an emergency fund in the stock market. At the same time, it would also be stupid for…
Right. Putting all your eggs in one basket is for suckers. Keep some of your eggs in the fridge. They won't hatch many chickens, but they're unlikely to get eaten by foxes, either. Nothing to see here. Move along.
That's not what the article says. It says you have to deliberately move your eggs around according to the business cycle.
Re: Why Saving is for Suckers
#10Right, because the SUCKERS like me who spend far less than they earn and keep their money in a savings account with the highest interest rate they can find (at essentially NO risk) were hurt so badly last time the economy crashed. Right?