Why bother with Savings Accounts?

LIB3RTY

With a real inflation rate of around 8% - 10% and accounts only paying an average of around 3% (from what I have seen) why bother? You are losing purchasing power.

I got out of that game back in 2009 and have seen gains as high as 660% playing the stock market and investing in hard assets. My worst performer was Gold which is only up 40%.

After the next huge crash (next year I am guessing since this year is a US election year) I will be going all in on Precious Metals and Mining Stocks. I would rather risk high losses for high gains than accpet a constant guaranteed loss to Inflation.

You don't need a Masters Degree or PHD to play the markets, anyone can do it. I spent 8 months studying about an hour per day before I took my first plunge and I have never looked back. Once you get your head around the jargon it's not too hard. Simply study several sectors, find something you think is undervalued and go for it.

CLAPTON

I agree

that's why you never see a finance person on tele over the age of 25 as they are all on their boats in the med

Voiren

LIB3RTY wrote: »

I would rather risk high losses for high gains than accpet a constant guaranteed loss to Inflation.

And I wouldn't, which I think answers the question! :rotfl:

I also have other things to research in my 8 months of an hour a day and no interest in the stock market, so...

I don't think it's the kind of question that'll get you very interesting replies, tbh. People have varying attitudes to risk and savings accounts are simple and do what you expect them to do.

LIB3RTY

Look at how much the Pound has been devalued. A British Sovereign used to be equivocal to £1. Now a Sovereign is around £260. The Pound has lost 25,900% of it's purchasing value.

Why the heck would I save in something that is a proven loser over time? The pound is just a currency now, it is not money as it does not conform to the rules of money. Money must hold it's value over time. Inflation (aka expansion of teh currency supply) destroys this quality, therefor it is not for saving.

LIB3RTY

Voiren wrote: »

And I wouldn't, which I think answers the question! :rotfl:

I also have other things to research in my 8 months of an hour a day and no interest in the stock market, so...

I don't think it's the kind of question that'll get you very interesting replies, tbh. People have varying attitudes to risk and savings accounts are simple and do what you expect them to do.

Savings accounts just provide banks more base capital to expand the currency supply, thus destroying the value of your savings, unless the return (interest) can keep up with or outperform inflation.

sorcerer

Not everybody will have your attitude to risk, especially when they are older, you might find losing the capital is too much of a risk. But I understand your point of view.

atush

1, because putting it under your mattress means you could lose 100% of spending power

2, because if you wait til After the next crash (as you mentionned) to move to gold/metals you will be buying expensive not cheap ( I buy gold when everyone is selling not buying)

3 have you heard of equities?

Onawingandaprayer

Well bully for you. Do keep us posted on how successful you are. zzzzz

ffacoffipawb

LIB3RTY wrote: »

Look at how much the Pound has been devalued. A British Sovereign used to be equivocal to £1. Now a Sovereign is around £260. The Pound has lost 25,900% of it's purchasing value.

It cannot lose more than 100% of its value. It has lost 99.6% of its value in this case.

atush

But the soverign example does not take into acct inflation of other assets/values.

In which case you would find that equities outperformed the price of gold over the last 100+ years for instance.

Noviceinvestor

Totally agree with your posts. I started a similar thread the other day - 'what's the point of ISAs' - for all the same reasons.