Financial markets around the world reeled following President Donald Trump’s latest and most severe set of tariffs, and the U.S. stock market took the worst of it.
It’s still basically most people’s only hope for retirement. And represents a large portion of the compensation they are literally working for day after day.
What’s the better alternative? I’d certainly take a 401k over the current system in Germany where the current working population pays for the pensions of those currently retired. Which is obviously unsustainable if you take a single look at the demographic changes ahead.
Stocks will eventually go up again and at least for my global all world ETF the current drop means we are only back to where we were in September 24. Trump is certainly destroying a lot of wealth with his actions, but I think this would be true regardless of how you invest.
And anyone in hot waters right now because of the current drops should have probably been invested more diversified and maybe reduced risk a bit more.
I have to admit, I don’t know that it’s the best option, but all my funds are currently in a HYSA.
Not as high return as the market under normal circumstances, but it’s liquid, and it’s been relatively safe at between 3.5% and 4.25% the last several years, and the times we live in are anything but normal.
Your funds might be in a HYSA but the bank holding them probably has them in stocks and bonds.
So if the stocks fall enough you won’t have your money anyways.
Now you could say you want to hold onto cash instead, but the only fix for the banks not having money is to print money which makes cash worth less.
Okay but what if you held gold or other minerals. Well the value of those comes from the perception that they could be used to trade when other things fail, but even if milk is $500 a gallon no grocery store is going to take gold as it isn’t able to be insured and tracked. So the value of gold also will drop as it can’t actually be used for goods and services.
So basically you can’t isolate yourself and protect yourself from societies stupidity. Its all a gamble and maybe your option works out or maybe it doesn’t but there isn’t a clear way to avoid the problem.
It’s good to have 3 months to a year of expenses saved in an HYSA to start with as a rainy day fund you can use in an emergency (i.e. lose your job/house, etc.). I think there are some studies that a huge portion of the population doesn’t have savings to cover even a surprise $1000 expense.
That’s more important than putting money in the stock market to start with but after you have that you can put your savings into an IRA or something preferably in a diversified fund. (Vanguard has a few tgat are specifically targeted for retirement at particular years).
Have you actually looked at it? The sort of index fund that people put their retirement money in (if they invest in stocks rather than bonds) has doubled its value in the last 7 years. Quadrupled in the last 13.
I mean, anyone with a 401K is in the stock market.
Which is why 401k is a scam.
It’s still basically most people’s only hope for retirement. And represents a large portion of the compensation they are literally working for day after day.
Especially with the history of constant cuts, and current gutting of, social security.
What’s the better alternative? I’d certainly take a 401k over the current system in Germany where the current working population pays for the pensions of those currently retired. Which is obviously unsustainable if you take a single look at the demographic changes ahead.
Stocks will eventually go up again and at least for my global all world ETF the current drop means we are only back to where we were in September 24. Trump is certainly destroying a lot of wealth with his actions, but I think this would be true regardless of how you invest.
And anyone in hot waters right now because of the current drops should have probably been invested more diversified and maybe reduced risk a bit more.
In Canada the CPP is paying into an annuity you get after retirement.
You’re not just paying in for the current seniors, you get out based on what you put in (up to a cap)
I have to admit, I don’t know that it’s the best option, but all my funds are currently in a HYSA.
Not as high return as the market under normal circumstances, but it’s liquid, and it’s been relatively safe at between 3.5% and 4.25% the last several years, and the times we live in are anything but normal.
Your funds might be in a HYSA but the bank holding them probably has them in stocks and bonds.
So if the stocks fall enough you won’t have your money anyways.
Now you could say you want to hold onto cash instead, but the only fix for the banks not having money is to print money which makes cash worth less.
Okay but what if you held gold or other minerals. Well the value of those comes from the perception that they could be used to trade when other things fail, but even if milk is $500 a gallon no grocery store is going to take gold as it isn’t able to be insured and tracked. So the value of gold also will drop as it can’t actually be used for goods and services.
So basically you can’t isolate yourself and protect yourself from societies stupidity. Its all a gamble and maybe your option works out or maybe it doesn’t but there isn’t a clear way to avoid the problem.
It’s good to have 3 months to a year of expenses saved in an HYSA to start with as a rainy day fund you can use in an emergency (i.e. lose your job/house, etc.). I think there are some studies that a huge portion of the population doesn’t have savings to cover even a surprise $1000 expense.
That’s more important than putting money in the stock market to start with but after you have that you can put your savings into an IRA or something preferably in a diversified fund. (Vanguard has a few tgat are specifically targeted for retirement at particular years).
My life experience has given me no reason to believe it was ever going to pay out anyway. Let the motherfucker burn.
Have you actually looked at it? The sort of index fund that people put their retirement money in (if they invest in stocks rather than bonds) has doubled its value in the last 7 years. Quadrupled in the last 13.
Allow me to introduce you to the concept of a global depression, a situation far worse than anything we’ve seen in the last 100 years or so