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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

#281

Post by eggsome »

MathYouF wrote: post #254
jmyeet wrote: post #250

So there is something to be said for keeping your savings in a stable currency or asset but that doesn't necessary protect you from negative government action. Some examples: 1. Many Russians held funds in currencies other than rubles. Faced with sanctions, Putin instituted forced conversion to rubles. So far the ruble hasn't been decimated but this could still go south; 2. Venezuela essentially prevents conversion o…

> So far the ruble hasn't been decimated but this could still go south The ruble was worth 0.14 dollars before the war and now is worth 0.12, which is just below a 0.014 reduction in its value, so it has quite literally and almost exactly been decimated, as it was done in roman tradition.

On one hand I really appreciate the original meaning, it always seemed 'neat' to me.

However the reality is that it's modern meaning has changed. See here:

https://www.merriam-webster.com/dictionary/decimated

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

#282

Post by bern4444 »

PragmaticPulp wrote: post #221
01100011 wrote: post #194

We're seeing more and more economic focused posts making it to the front page lately. We're all thinking about it due to high inflation and few options to protect our cash savings. That said, the quality of HN comments regarding economics tend to be, in my experience, quite low. I'd suggest anyone interested go seek out more qualified analysis beyond a weekend HN thread full of people like me regurgitating half under…

Inflation topics can be particularly misleading to new investors who haven’t yet realized that nobody actually “invests” in cash across decades like this example. At least not if they have basic financial education. It can also confuse new investors who might not realize that USD-denominated assets don’t lose value like USD itself. This may seem obvious to anyone who has studied Econ or investing, but it’s actually a…

To clarify - this isn't to say that non USD denominated assets don't lose value if compared to the currency its denominated right?

That is, I could replace 'USD' with any other currency in both occurrences in the phrase: `USD-denominated assets don’t lose value like USD itself.` and it would still be true, right?

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

#284

Post by kbenson »

kache_ wrote: post #105
logifail wrote: post #100

Earlier quoted context omitted.

> If you want to win at life, you “save money” by purchasing non-cash assets like stocks. Except when you don't. Between 1995 and 2000 I lived in a student house in the UK and one of my housemates (who was also a student, and from my recollection almost as broke as I was back then) was really into investing into the stock market during the dot-com boom. He bought both Lastminute.com (IPO March 2000 @ 380p/share[1], s…

Well, you don't buy individual stocks; you buy slices of slices of everything to dissipate your risk towards variance. And you definitely don't hold cash. Holding cash has a lot of risk as well

Ah, like slices of slices of mortgages. :/

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

#285

Post by zacherates »

ZoomZoomZoom wrote: post #240
zacherates wrote: post #88

1228 pesos in 1976 was worth about $4.50 in 1976 USD [1]. ... and if he'd bought into the S&P 500 (Vanguard launched the First Index Investment Trust now the Vanguard 500 Index Fund in 1976 [2]), it would be worth about about $190 in today's USD. Which you could sell to buy about 2.99g of gold today (3 trillion times as much as reported). While obvious you'd have to be extremely prescient to put your money in a compl…

And how could he have done it, being in Argentina in 1976? Not even asking about Vanguard. Just accessing s&p500 or NASDAQ is not easy even today, don't think it was much easier then.

If the thesis of the thread was "Gee, it sure sucked to grow up in Argentina in the 70s with no access to high-quality financial products." that would be extremely relevant... but the thesis is much more expansive than that ("Prepare for a fantastic lesson about the power of inflation." / "Takeaway: may the sign of the exponential be ever in your favor. Positive, you own the world. Negative, you get diluted into nanoparticles.").

The folks getting spooked about inflation right now and reading this thread (it is written in English after all), almost certainly can invest even very small amounts in high quality investment products. There's no need to get fatalistic about saving ("you get diluted into nanoparticles."), it has never been easier for normal people to put their money to work productively.

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

#286

Post by nikolay »

Same happened with my savings as a child in Bulgaria - my grandparents were putting into that savings account significant amount of money evety month, and when I tried to withdraw them later, all that savings were worth nothing! This should be a lesson to all of us - at least it was for me!

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

#287

Post by sytelus »

Fun fact: You will likely lose more money in divorce (about 50% probability in Western world) than all the money you had saved throughout all of the married combined by choosing cheaper vacations, forgoing hobbies, finding discounts, buying inexpensive cloths and cars.

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

#288

Post by sytelus »

OP describes investment strategy that is destined to fail (i.e. keep money in savings account). This is in fact great way to teach the children by inducing failure so they understand why they need to learn investing instead of saving. My mom always converted cash to gold instinctively because she did not trust government printed paper. In US, people tend to keep money in S&P 500 with rather poor return but still well protected against inflation. The problem is still that money earned over time increases at least linearly for most people. This means that whatever amount you saved up as kid isn’t going to amount much even if it was inflation protected. For instance, all the money I saved up as kid for 10 years and put in S&P 500 for inflation protection will still come bit short to match my one month income.

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

#289

Post by erik_seaberg »

ALittleLight wrote: post #214
dijit wrote: post #54

Earlier quoted context omitted.

I mean, liquid asset vs variable and tied up asset? I'll be the first to admit to being fiscally conservative: money I can't spend and that is sunk into something else does not guarantee that I get my money back. I'm losing money on the savings I have every year, which is why I put nearly all my savings into a fund, but then that fund dropped in value almost immediately by 30%, if I had done nothing with my money and…

I don't understand the mindset that losses aren't real until you convert them back into cash. If you had turned your money into casino chips and were sitting at a poker table, and had just lost 30% of your chips, would you consider that your losses weren't real until you cashed out your chips? Of course, you might win your money back, and if you were a good poker player who usually came up net-positive from situation…

The typical advice is that timing the market is so hard that we’re usually better off just riding out volatility. JP Morgan observed that about 40% of gains between 1995 and 2015 came on the market’s ten best days, many of which came within two weeks of the ten worst days.

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

#290

Post by manarth »

mattm wrote: post #118
zacherates wrote: post #88

1228 pesos in 1976 was worth about $4.50 in 1976 USD [1]. ... and if he'd bought into the S&P 500 (Vanguard launched the First Index Investment Trust now the Vanguard 500 Index Fund in 1976 [2]), it would be worth about about $190 in today's USD. Which you could sell to buy about 2.99g of gold today (3 trillion times as much as reported). While obvious you'd have to be extremely prescient to put your money in a compl…

For comparison if he bought gold directly - $4.50 would have bought about 1.13g of gold [1] https://sdbullion.com/gold-prices-1976

Which today would get you around US$72
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