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Originally Posted by GGG
I think the idea of saving because of high interest rates isn’t a thing anymore. No one should have significant amounts of savings in cash anymore. Essentially just money to be used in the next 5 years. The bulk of savings is in the market which lower rates tend to bolster
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Quote:
Originally Posted by blankall
The last few years has been an awful time to be a saver. Returns have been extremely low across the board, but inflation has been sky high. If you saved and invested $20k a few years ago, it's probably lost value, relative to buying power anyways.
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Good points. I think what I really mean to go with is "financial prudence". Maybe that's not even the right word. In low interest environments, we had people taking on all kinds of personal debt. While that can be smart if it's to allow you to invest more, for a lot of people it was a way to boost their lifestyle, taking on the risk that if interest rates skyrocketed they'd be screwed.
A high interest rate environment rewarded people who were more conservative on that front. At least I perceive it be that way. Now all you smart guys can tell my why I'm wrong yet again haha.
One example - poor market returns and high interest rates actually made it appealing to pay down your mortgage for more than emotional reasons for once.