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  • FIRST POST
    • lluzers
    • By lluzers 9th Oct 17, 3:45 PM
    • 116Posts
    • 13Thanks
    lluzers
    losing the value of cash savings
    • #1
    • 9th Oct 17, 3:45 PM
    losing the value of cash savings 9th Oct 17 at 3:45 PM
    Most people here suffer from the "Dunning Kruger effect"

    The people putting their monies in cash , think they are smart and earning a profit , they don't know that their 0.5 % interest income has been losing buying power for the last 45 years .45 years ago the printing presses for money printing started , same home you bought for £15,000 in 1972 , you will pay £1m for it .The buying power of your money is going down.

    Pensioners have been screwed by governments for last 45 years , nowadays they borrow from pensioners via gilts at 0.25 %???.The buying power of your cash will keep going down.

    £100k invested in cash today will be worth £15k buying power in 20 years.
    Last edited by lluzers; 09-10-2017 at 4:21 PM.
Page 1
    • steampowered
    • By steampowered 9th Oct 17, 3:56 PM
    • 1,791 Posts
    • 1,693 Thanks
    steampowered
    • #2
    • 9th Oct 17, 3:56 PM
    • #2
    • 9th Oct 17, 3:56 PM
    Pensioners have been screwed by governments for last 45 years
    Originally posted by lluzers
    I strongly object to this insinuation.

    It shouldn't be the job of government to act as an investment bank. It certainly shouldn't be the job of government to subsidise people's savings.

    People are perfectly capable of making their own investments.
    • teddysmum
    • By teddysmum 9th Oct 17, 4:01 PM
    • 8,347 Posts
    • 4,965 Thanks
    teddysmum
    • #3
    • 9th Oct 17, 4:01 PM
    • #3
    • 9th Oct 17, 4:01 PM
    I think people are quite aware that their money is losing value as you could buy a bag of chips or make a phone call for 4d in the 1950s/60s and in the 1920,my mum told me she used to buy a 'poke bag' (about 4oz) of sweets for a farthing (quarter of an old penny) and a large loaf of bread for 1d.


    Houses are much dearer now, but not as dear when you consider that incomes were much much lower in the 1970s. I earned about £100 a week as a teacher and this was huge compared to the £12 I earned as an unqualified teacher three years previously.


    Is your post meant to make people miserable or to imply that you know of better ways of dealing with money ?
    • lluzers
    • By lluzers 9th Oct 17, 4:03 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    • #4
    • 9th Oct 17, 4:03 PM
    • #4
    • 9th Oct 17, 4:03 PM
    I strongly object to this insinuation.

    It shouldn't be the job of government to act as an investment bank. It certainly shouldn't be the job of government to subsidise people's savings.

    People are perfectly capable of making their own investments.
    Originally posted by steampowered
    Governments control interest rates , they borrow from savers , cash savers like pensioners have their money in cash.If savers really have a level playing field and controlled the interest rates , I would agree in a free market.

    The governments use borrowings to pay off past debts , with new debts , the past debts at today's buying power of the cash borrowed, is another tax on cash savers.
    • eskbanker
    • By eskbanker 9th Oct 17, 4:07 PM
    • 5,568 Posts
    • 5,412 Thanks
    eskbanker
    • #5
    • 9th Oct 17, 4:07 PM
    • #5
    • 9th Oct 17, 4:07 PM
    Is your post meant to make people miserable or to imply that you know of better ways of dealing with money ?
    Originally posted by teddysmum
    Seems to me that OP's posts are, intentionally or not, textbook examples of the Dunning-Kruger effect in action....
    • lluzers
    • By lluzers 9th Oct 17, 4:07 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    • #6
    • 9th Oct 17, 4:07 PM
    • #6
    • 9th Oct 17, 4:07 PM


    Houses are much dearer now, but not as dear when you consider that incomes were much much lower in the 1970s. I earned about £100 a week as a teacher and this was huge compared to the £12 I earned as an unqualified teacher three years previously.

    Originally posted by teddysmum
    In 1979 affordability was 7 times house prices for me , today's it is 20 times .
    • bigadaj
    • By bigadaj 9th Oct 17, 4:27 PM
    • 10,291 Posts
    • 6,604 Thanks
    bigadaj
    • #7
    • 9th Oct 17, 4:27 PM
    • #7
    • 9th Oct 17, 4:27 PM
    In 1979 affordability was 7 times house prices for me , today's it is 20 times .
    Originally posted by lluzers
    Exactly, the government has made many of those poor pensioners millionaires simply by buying an average priced property and waiting a few decades.
    • lluzers
    • By lluzers 9th Oct 17, 4:30 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    • #8
    • 9th Oct 17, 4:30 PM
    • #8
    • 9th Oct 17, 4:30 PM
    Exactly, the government has made many of those poor pensioners millionaires simply by buying an average priced property and waiting a few decades.
    Originally posted by bigadaj
    The early pensioners lived in council houses and had cash in the building society earning 4 to 8 % a year.
    • aroominyork
    • By aroominyork 9th Oct 17, 4:31 PM
    • 229 Posts
    • 43 Thanks
    aroominyork
    • #9
    • 9th Oct 17, 4:31 PM
    • #9
    • 9th Oct 17, 4:31 PM
    Exactly, the government has made many of those poor pensioners millionaires simply by buying an average priced property and waiting a few decades.
    Originally posted by bigadaj
    Conclusion: a prime sector to invest in is companies specialising in equity release.
    • lluzers
    • By lluzers 9th Oct 17, 4:33 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    Conclusion: a prime sector to invest in is companies specialising in equity release.
    Originally posted by aroominyork
    Agreed

    But this sector makes money by screwing the pensioners with property , leaving their homes in the hands of these sector.
    • stoozie1
    • By stoozie1 9th Oct 17, 4:38 PM
    • 339 Posts
    • 185 Thanks
    stoozie1
    lluzers, are you a pensioner with cash savings which are reducing due to inflation?

    This site and the wise people on here can give you some excellent pointers if so.
    • lluzers
    • By lluzers 9th Oct 17, 4:42 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    lluzers, are you a pensioner with cash savings which are reducing due to inflation?

    This site and the wise people on here can give you some excellent pointers if so.
    Originally posted by stoozie1
    Yes
    I am a pensioner with £100k cash.I am looking for inflation adjusted returns , I don't mean governments manipulated inflation figures.
    • aroominyork
    • By aroominyork 9th Oct 17, 4:42 PM
    • 229 Posts
    • 43 Thanks
    aroominyork
    Agreed

    But this sector makes money by screwing the pensioners with property , leaving their homes in the hands of these sector.
    Originally posted by lluzers
    So do you only invest in rigorously screened ethical funds, or are you in BAT/Philip Morris etc. and happy to profit from people dying of lung cancer?
    • lluzers
    • By lluzers 9th Oct 17, 4:48 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    So do you only invest in rigorously screened ethical funds, or are you in BAT/Philip Morris etc. and happy to profit from people dying of lung cancer?
    Originally posted by aroominyork
    ethical funds paying good dividends and maintaining margins.
    • aroominyork
    • By aroominyork 9th Oct 17, 4:59 PM
    • 229 Posts
    • 43 Thanks
    aroominyork
    ethical funds paying good dividends and maintaining margins.
    Originally posted by lluzers
    Are you saying you are only invested in ethical funds and that they are all paying you good dividends, or that you would only invest in ethical funds if they paid you good dividends?
    • lluzers
    • By lluzers 9th Oct 17, 5:07 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    Are you saying you are only invested in ethical funds and that they are all paying you good dividends, or that you would only invest in ethical funds if they paid you good dividends?
    Originally posted by aroominyork
    only invest in ethical funds paying good dividends.
    • ChesterDog
    • By ChesterDog 9th Oct 17, 5:11 PM
    • 783 Posts
    • 1,365 Thanks
    ChesterDog
    Most people here suffer from the "Dunning Kruger effect"
    Originally posted by lluzers
    Where is your evidence for this?

    Do you mean the Savings and Investments Forum or the MSE forums in general?

    The site as a whole covers the whole spectrum from unfortunate individuals some of whom are in desperate circumstances financially (many of them through no fault of their own) and those who have (and have made) multiple millions of pounds through astute decisions and/or good fortune.

    I don't think you can make a blanket statement like yours.

    That is, unless Eskbanker has been very perceptive.
    I am one of the "Dogs of the Index".
    • aroominyork
    • By aroominyork 9th Oct 17, 5:11 PM
    • 229 Posts
    • 43 Thanks
    aroominyork
    only invest in ethical funds paying good dividends.
    Originally posted by lluzers
    Then I hope you will not criticise people who invest in equity release firms.

    That said, I sympathise with your situation of you being a pensioner who cannot take long term investment risk and is seeing the value of your capital being eroded in inflation.
    • lluzers
    • By lluzers 9th Oct 17, 5:29 PM
    • 116 Posts
    • 13 Thanks
    lluzers
    Where is your evidence for this?

    Do you mean the Savings and Investments Forum or the MSE forums in general?
    Originally posted by ChesterDog
    I can see the evidence in the Savings and Investments Forum , where people talk about receiving interest incomes and house prices going up , when their cash real returns are negative and house prices are not going up but the value of their money has been going down.
    • jimjames
    • By jimjames 9th Oct 17, 5:54 PM
    • 12,088 Posts
    • 10,532 Thanks
    jimjames
    Is your post meant to make people miserable or to imply that you know of better ways of dealing with money ?
    Originally posted by teddysmum
    I've no idea what the OP is going to suggest but I can safely say there are a large number of posters here that certainly know of better ways of dealing with money than leaving it all in cash.

    I can see the evidence in the Savings and Investments Forum , where people talk about receiving interest incomes and house prices going up , when their cash real returns are negative and house prices are not going up but the value of their money has been going down.
    Originally posted by lluzers
    You seem to be ignoring all the posts about investments not cash savings. It is after all the Savings AND Investment forum.
    Last edited by jimjames; 09-10-2017 at 5:56 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
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