Saving has no point without yield!
Dump that savings account
Ok, this title is maybe a little over the top, but I am trying to make a statement here. As an insurance broker, and portfolio manager for customers, I have seen hundreds maybe thousands of people with hundreds of thousands of dollars in savings accounts that have a yield of just over 0 % per year. Some of them I have been able to convince that that is not the way to make money with their money. But most of them are just not convinceble. They are getting poorer by the minute, and just don't realise it, or don't have the financial education to know any better.
So, to most of them I say, "Dump that savings account", to wake them up. They act very surprised when I say that to them, but in fact the only that needs to be on a savings account is just enough to survive 6 to 12 months without wage. More is really not necessary in my opinion. All the rest of the cash should be going into assets that have yield. And that can be anything. From real estate, over stocks, bonds, to crypto. But without yield, saving really makes very little sense. Especially in the debt based system we are in, where inflation will always be part of the puzzle. Some years higher than others.
Search a puzzle that fits you
So, in what assets should you invest? That is very personal. And is something that isn't figured out in a few minutes. First of all, people should set their expectations of "yield". For instance, if someone expects 10 % yield per year. They will have to go and search for a mix of assets which together have yielded 10 % over the last 10 to 20 years. If you can find that mix, you will most likely be very close to that in the next decade too. Of course this has to fit into the risk tolerance of the person too. If they can't stand dropdowns of 25 % per year, the yield expectation needs to be lowered, and another mix has to be made.
For most of my clients I make a mix of ETFs, and other funds, that have real estate, bonds, dividend stocks, and growth stocks. The mix is for everyone different. But in the end it always fits the client.
I also tell them to stop watching their funds daily. This has no purpose at all. The horizon is always at least 5 years, otherwise investing has no point.
I hope I have inspired some people with this, and they will make this assessment for theirselves too.
Sincerely,
Pele23
Earn 50 $ or more per month by sharing your bandwidth with Honeygain
Posted Using LeoFinance Beta
Unless it is a hedge. I can see holding some things for the speculation/hedging nature in case of massive market moves or economic catastrophe.
However, we need to focus upon return. The fixed income market is huge for Hive and Leofinance.
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In case of economic catastrophe the chances are pretty high that savings will be worth squat when it happens. For speculation, there are very little people in the world that truely can predict the market, history has proven that being in the market is 99. % of the time the best choice in the long run…
Some people don't understand the difference between savings and investments.
Although it seems less riskier than investments, the potential reward is not that huge. With inflation, saving for long periods of time (in most cases) also comes with a loss in purchasing power or value of the asset.
I think HBD savings is the only savings that really makes sense these days.
Posted Using LeoFinance Beta
During this hyperinflation period, saving with no yield must be not reasonable and must be mindlessness.
By the way, I thanked you for your support in my last post.
The number one asset in human history is HEX, it pays 40% APY if you stake for 15 years. On top of that you will earn HEDRON and if you stake that (when ICOSA launch) you will earn both HEDRON and ICOSA.
This is the most spectacular tokenomics in human history.
I disregard anything related to fiat money as BS.
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