Negative Interest Rates.

[ba_si]

Hello everyone,

This is my first post here, and I wanted to ask everyone a question that really gets to the heart of saving money.

If the interest rate is lower than the inflation rate, what is the point of saving money? Even though you might be earning Dollars, you are actually losing wealth.

I wanted to post some pictures and links, but since I'm new I'll have to wait. Your thoughts?

[snafu]

It is true that buying power is being eroded by inflation. Individuals who fear risk seem unaware that their retirement savings will be insufficient by the triple whammy of tax, inflation and devaluation of the dollar.

If you are willing to take measured, moderate risk, there are investment segments which at present have the likelihood of increasing in value over time. Try to avoid spending significant funds on items that experience confirms will loose value to depreciation.

[disneysteve]

Originally Posted by ba_si

If the interest rate is lower than the inflation rate, what is the point of saving money?

I would much rather put away $1,000 today even if it will only be worth $980 a year from now than to go out and frivolously spend $1,000 today and have nothing a year from now.

The point of saving money is to prepare for future needs. Yes, inflation chips away at the value of that money, but not nearly as much as not saving it at all.

[greenskeeper]

Originally Posted by ba_si

If the interest rate is lower than the inflation rate, what is the point of saving money? Even though you might be earning Dollars, you are actually losing wealth.

physical gold and silver

[Shewillbemine]

As someone else pointed out, what is your other option if you are NOT saving your money? One would think the opposite of saving money is NOT saving money, which means spending it.

Spending money means no more money. And you know where no more money leads you.