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Comment by cheeseomlit | Hacker News Reader

What if I want to save? Certainly seems kinda bad when my savings keeps losing value

> What if I want to save?

Buy Treasuries. Or shares of stock. This is the point of inflation: it forces savers to invest time into productively allocating capital.

Why not save shares of the S&P 500 index? You just sell some when you want to buy something like a car.

This right here, literally how it’s supposed to work. “Money becomes worth less over time, what should I do?” “Invest in productive assets” “OHHHHHHHHH”

There, we just saved you from having to go to an Econ class :P

So if I have a $2000 how much of that do lose in fees when I buy shares? Sure it makes sense if I am saving $1000 or more a month but it doesn't work when I'm saving $50 to $100 a month for my kids college education, fees eat that up the same way that inflation does, but both make hardly any difference to the person saving $1000 or more a month.

Robinhood charges $0 in fees, so nothing. The trend in ETFs is reducing fees, there’s now zero fee ETFs too. Even if you use a discount brokerage that charges 3-4$ per trade the break even point is quite low, so store it as cash until you’re happy with the fee ratio.

How much do you lose in fees when you buy crypto? 1-2%? Plus insane volatility. If you’re low income that volatility is crippling.

The thing is, this assumes a shortage of capital for productive enterprises. Historically, that's been normal, but not so much since 2008. Banks have been hoarding cash well in excess of reserve requirements [1], despite ~zero interest for most of that time [2].

[1] https://fred.stlouisfed.org/series/WRESBAL

[2] https://fred.stlouisfed.org/series/FEDFUNDS

Unless the market happens to be down the week your old car dies?

Are you holding cash? The S&P500 is up something like 200% since 2008 so it's hard to understand how anyone's savings could have lost value in the past decade.

What you're talking about is investing+speculating, not saving. By the same logic investing in the S&P500 over the 1999-2009 decade would have been worse than cash. You save money, you invest/speculate to earn a return -- which requires taking on downside risk.

If you are saving by stashing dollars under your mattress then that's on you. Don't save by holding currency.

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