Interestingly, the current administration proposed to index capital gains taxes to inflation to address that very paradox. Unsurprisingly, their proposal would have just been a giveaway to the wealthy.[0]
[0] https://itep.org/why-trump-administrations-plan-to-index-cap...
US tax system is MUCH more complicated, than UK's... and UK's system is fairly complex.
It's not risk free, there is nothing that stops government from creating inflation so they can pay off the debt for in inflated dollars.
Today, central bank alone doesn't have power to make create money out of thin air. Government guaranteeing loans from banks to corporate players and projects is creating inflation. It's good for politicians as they can pay off their expensive mistakes in cheap money.
Isn't the bank meant to be using your money in a "managed fund" like manner? IE leverage it to make profits.
Here in Australia the banks make quite decent profits, and yet a savings account can't break even, before tax?!?
I haven't done the sums but I am curious if it is better to own shares in the bank than put money in the bank.
I am also inclined to ensure my son does get financial knowledge. It is hard to play a game you know only limited rules of.
Savings. Generally advertised as helping your money grow. It isn't advertised as a "Slow draining of value" account.
It is crazy that for a standard "Savings" account: - interest earned is less than inflation. - I pay tax on that interest earned. "Saving" money in a common savings bank account pisses away value.
Many people are not capable of more financial management capability.
The middle class is often locked into a mortgage - I am too! - and is barely one step up. But it is one step up.
Ultimately, poor people don't own things that make money. They are not "rent seekers". They don't own stocks or real estate or anything else where the simple act of ownership makes money.