Price shocks in formative years scar consumption for life

Re:Price shocks in formative years scar consumption for life by happyopossum on Wednesday June 15, 2022 @04:50PM (#31759306)

> Inflation ate almost 9% of its value this past year. Granted stocks are down 20% this year,

yeah, so you're still ahead of the game if you had it saved.

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Re:Price shocks in formative years scar consumption for life by cableshaft on Wednesday June 15, 2022 @05:58PM (#31759973)

This year. Meanwhile it would have missed out on 27% in gains the previous year (and its associated dividends), if I kept it in a bank account.

Also that 20% loss will most likely recover in time. Inflation almost never reverses itself, it only slows down.

There's a reason rich people park most of their money in assets, and not in savings accounts. If they got more returns by keeping it in savings accounts, they would do that.

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Re:Price shocks in formative years scar consumption for life by happyopossum on Thursday June 16, 2022 @01:39PM (#31768807)

> rich people park most of their money in assets

6 months of basic living expenses isn't "most of their money" for rich people. Ideally it wouldn't be for the rest of us either.

You seem to be thinking I'm against investing altogether - I'm not, but there is a significant risk avoidance in having an emergency fund that is 100% liquid and not tied to market risks.

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