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so if you invest in savings account 150 a month for 12 months it is 1800 dollars. lets say i do this for 40 years. 40 x 1800 is 72 grand. so you are saying i wouldnt see 72 grand after inflation? of course I would invest more than 150 as i get older and make more money but just in case i didnt i would do at least 150
Purchasing power of that 72k will be less in 40 years than it is today with almost certainty. If in 40 years that 72k only purchases 17k dollars worth of goods you have lost a lot of purchasing power. Fwiw 72k in 1976 40 years ago adjusted for inflation would need to be 302,000.00 today to maintain the same purchasing power
Purchasing power of that 72k will be less in 40 years than it is today with almost certainty. If in 40 years that 72k only purchases 17k dollars worth of goods you have lost a lot of purchasing power. Fwiw 72k in 1976 40 years ago adjusted for inflation would need to be 302,000.00 today to maintain the same purchasing power
well who says I cant reach into the 100 of thousands in savings?
well who says I cant reach into the 100 of thousands in savings?
I'm not sure if you understand the concept. If you manage to save 100k over the next 40 years in 2056 it will more than likely only have the purchasing power that 23,000.00 has today if inflation runs at the same rate for the next 40 years as it has the last 40
If the interest rate on the account is below the rate of inflation, you lose purchasing power*, even if you invest every month.
*By "lose", it is meant that the money you have at the end will buy less than the contributed sums would have (taken together) at the time the contributions were made.
The solution to this problem is to earn more than inflation. You can't do that in a savings account.
Long-term money should be invested in stocks and bonds.
but thats too much risk. there is no guarantee that revenue will generate in the companies that you invest stock in. lets say we go into a global recession, then even the fortune 500 will not be profitable. also people are losing jobs due to automation so if they can put money into these businesses then stocks and bonds cant make money
There is no risk free investment guaranteed to beat inflation every single time, except for a broad stock market fund held for 20-30 years at least, or maybe a diversified real estate portfolio held for a similarly long period, rental income included.
You don't seem to understand: EVERYTHING you do with your money involves risk! Stocks, bonds, real estate, CDs and savings accounts - none of these things are risk-free. If you are looking for a risk-free place to put your money, you might as well spend your time looking for unicorns or leprechauns, because you'll have about as much chance of success. (And at least in the incredibly unlikely event you DO catch a leprechaun, at least you'll get a pot of gold for your efforts!)
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there is no guarantee that revenue will generate in the companies that you invest stock in. lets say we go into a global recession, then even the fortune 500 will not be profitable. also people are losing jobs due to automation so if they can put money into these businesses then stocks and bonds cant make money
There are ALWAYS people making money in the marketplace, no matter what the economy is doing. And no recession lasts forever. A universally bad economy is every bit as much a fictional beast as a unicorn.
There is no risk free investment guaranteed to beat inflation every single time, except for a broad stock market fund held for 20-30 years at least, or maybe a diversified real estate portfolio held for a similarly long period, rental income included.
are there any stocks you recommend? i i hear good things about vanguard
are there any stocks you recommend? i i hear good things about vanguard
Vanguard sells primarily mutual funds and ETFs (for both stocks and bonds), not individual stocks (although they do have a brokerage). They have the lowest fund fees in the business, which is important, but before you start buying ANY stocks or bonds, you need to have some idea of what you investment goals are (especially how long you expect to be able to leave the money invested in the market) and what level of short-term volatility you can actually stomach.
Why not start by reading the Bogleheds' wiki? (https://www.bogleheads.org/wiki/Main_Page). It will give you a good overview of how the strategy of long-term passive investing in the market works, as well as a few portfolio suggestions you might wish to consider.
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