The Stupidest Thing You Can Do With Your Money

Not to me. Spell it out?

 

I like part of my investment to be safe. SS provides that totally safe monthly income that can cover fro my monthly fixed expenses. Bonds have interest rate risk and can go down in a riding interest rate environment.

Another advantage of SS is the "forced savings" aspect. Keeps the behavioral problem of attempting to market time or contribute less than necessary out of the equation.

 

Ben Bernanke has said that the FED can only set interest rates different from market rates for short time periods.

The reason why interest rates have been low to almost negative for so long is that creditors were running out of qualified borrowers. With no demand for the money, obviously interest rates were low. This is courtesy of the wealth inequality driven by supply side economics of the past decades.

Note that this also resulted in blowing up of real estate and stock bubbles. In the absence of interest returns from safe investments, investors had to go into more risky assets. It is all free market forces, though (and some tax policy) but the FED had little to do with it.

 

What AtsamattaU is alluding to is that a gold-backed currency is by nature deflationary. Deflationary currencies are poisonous in a modern macroeconomy. That's why the gold standard was abolished, not so spite gold bugs, as some may assume.

 

Really good post!

 

They aren't running out of borrowers though. The reason they ran low on "qualified borrowers" is because they changed the qualifications and a lot of people just stopped borrowing because they heard banks won't lend money even though those people could have qualified.

 

Social Security is NOT an investment!

It is INSURANCE!

 

As do all companies with 401k's when they compute what you will retire with. With the way SS is going you may only get 75% of SS without changes.

I am planning to work to 70 and if it gets cut, puts my SS back to full retirement age.

 

Insurance can be part of an investment strategy. I don't carry a million bucks plus in life insurance because I think it will ever pay off for me, just that it will pay off.

 

The US gov't sells insurance?

 

The only time I allowed a financial advisor to manage a portion of my portfolio I lost money. At least I was smart enough not to allow them to get their hands on all of it.

The bulk of my retirement is in Roth's and inside of that there is a mix of cash, stocks, treasury bonds and index funds for the sake of diversity. However the majority is in index funds and as soon as the market drops into the next recession all of the cash will go into an S&P index fund as that is the quickest and safest means to double it in about 2 years.

Outside of the Roths I do have regular stocks and funds. Of all of the stocks I have owned only two have performed in a way that made me any real money. The best performer ended up earning 17 times the original investment over a period of 20 years. That was definitely the exception and did not represent the bulk of my portfolio.

The best investment that I have ever made, and that is responsible for my ability to retire, was in property. A rental apartment purchased in a good location 30 years ago has not only provided an income for that period but also a very nice lump sum that I used to purchase my retirement home where I am now. It enabled me to achieve the goal of retiring without a mortgage or a car payment or any other kind of debt.

So yes, stay away from financial advisors and stocks because you have to get lucky in order to beat the market if you are individual investor. Take advantage of company matching contributions into Roth's because that will give you at least 100% return on your contributions after you wait the required 5 years before withdrawal tax free. No financial advisor can do that for you.

 

Insurance tends to have it's own risks so I am leery of them myself. It isn't that I don't have any just that I don't believe the claims so I don't count on them to deliver on the "projections" but only on the defined payouts.

 

Read and learn!

https://en.wikipedia.org/wiki/Social_Security_Administration

 

Constantly reinvesting money with a price was called churning [maybe it still is]. This led to a play on a well-known commercial:

At Smith Barney, we make money the old-fashioned way. We churn it.

 

Those death benefits still $255? What good are are spouse / survivor benefits to persons who don't marry, or procreate? Lousy policy options ... like Obamacare. Maybe privatization is a good idea after all.

 

Churning has made a lot of folk easy money.

 

Also, according to one source, the absolute dumbest thing you can do with you money is buy a time share.

 

Asinine nitpicking because you can't come up with any valid response after being proven wrong about SS being insurance?

 

No. Pointing out that FDR packaged his socialist pyramid scheme as "insurance" in order to IMPOSE it on taxpayers ... Just like ACA was IMPOSED on taxpayers by Obama.

 

Well, the 100s of millions of Americans who could and still can count on their monthly SS check, many of whom were prevented of being destitute in old age, would probably disagree that this was "imposed" on tax payers.

I tell you, though, who is licking their chops if SS is privatized: The financial management industry. In the absence of fiduciary rules, they can part retirees from their money with impunity. Plus, they'll get a lot more money to work with. I don't know why anyone would want to shuffle so much more money into an industry that basically adds no value, as shown in the link in the OP.

 

I thought that was called Trump University. So confused.

 

I invest very little due to the fact that that i trust the market about as much as i would trust an Al Qaeda barber shop.

 

Depends on how long you live

 

Moving the goal posts?

 

I can lead a horse to water, but I cannot make it drink. I'm sorry if you're thirsty...

Think: especially during and after "The Great Recession", demand for money was enormous... and yet the Fed deliberately flooded the world with imaginary dollars and brutally suppressed interest rates -- defying every law of a free-market economy. Gold and silver have "intrinsic" value, yet these values, too, were suppressed, and instead we saw the Fed belching out one "quantitative-easing" after another, along with "Operation Twist".

Today, the Fed has a balance-sheet full of nearly FIVE TRILLION DOLLARS worth of toxic, near-worthless trash that it bought to bail out and rescue those 'insiders' who were considered to be "too big to fail".

And you still don't see it...?!