[JimDiGritz]

Si1, on 20 February 2012 - 09:45 AM, said:

no they shouldn't, I agree, but even now on their incomes at this time in history they should not be either

they appear to have gone into shares when they were high, gold when it was high, and want to buy a house as soon as possible whislt prices are still high

in reality they are tactically avoiding opportunities and heading deliberately for the biggest pitfalls available

I think most people do this, so despite a lifetime of earning they end up with nothing

the boomers generation, outside the public sector, have very little as far as I can tell besides housing wealth, which they are holding onto and will lose as prices subside, for example, it is the way of things

it is something to do with the human condition

To be fair ZIRP has meant that savers are being forced into risky asset classes (shares) or safe havens (Gold). I remember 12 years ago getting over 5% in my ING savers account.

[Si1]

JimDiGritz, on 20 February 2012 - 10:01 AM, said:

To be fair ZIRP has meant that savers are being forced into risky asset classes (shares) or safe havens (Gold). I remember 12 years ago getting over 5% in my ING savers account.

you are confusing saving and investing

[JimDiGritz]

Si1, on 20 February 2012 - 10:04 AM, said:

you are confusing saving and investing

No, I'm pointing out that the lack of real saving vehicles means that people are having to speculate.

[Si1]

JimDiGritz, on 20 February 2012 - 10:05 AM, said:

No, I'm pointing out that the lack of real saving vehicles means that people are having to speculate.

nope, you are confusing saving and investing, I mean this nicely, i like your posts, but you really are confusing saving with investing

[JimDiGritz]

Si1, on 20 February 2012 - 10:07 AM, said:

nope, you are confusing saving and investing, I mean this nicely, i like your posts, but you really are confusing saving with investing

Then maybe I'm missing the obvious here... I'm making a distinction between saving and investing based purely on risk.

My point is simply that 20 years ago, to maintain the value of your money all you had to do was put it in a basic savings account. There was no need to take any risk, invest or speculate.

Today, with negative real returns for savers (especially top rate tax payers), to build up a deposit requires a switch into investing or speculating which has an inherent risk.

I agree that most people seem to be aimlessly piling into investments and speculation without a clear understanding of their objectives, however I guess I have just made a simple point badly.

[Si1]

JimDiGritz, on 20 February 2012 - 10:18 AM, said:

Then maybe I'm missing the obvious here... I'm making a distinction between saving and investing based purely on risk.

My point is simply that 20 years ago, to maintain the value of your money all you had to do was put it in a basic savings account. There was no need to take any risk, invest or speculate.

Today, with negative real returns for savers (especially top rate tax payers), to build up a deposit requires a switch into investing or speculating which has an inherent risk.

I agree that most people seem to be aimlessly piling into investments and speculation without a clear understanding of their objectives, however I guess I have just made a simple point badly.

yes, fair enough

i suspect people have simply become used to the idea that cash can give a good return

i think they have been lulled into this, and need to re-assess their saving/inveswtment balance accordingly, and then invest (if that is their decision) rationally instead of chasing fads

but yes, I suppose i don't disagree

[rantnrave]

JimDiGritz, on 20 February 2012 - 10:18 AM, said:

Today, with negative real returns for savers (especially top rate tax payers), to build up a deposit requires a switch into investing or speculating which has an inherent risk.

If you're building up a deposit, then the real rate of returns should be measured against house price inflation, not RPI. That is of course a regional issue, but, for example, I'm getting 3% with Santander (yes I know) in an area where the Land Reg says house prices are down 4% YoY.

I would much rather be in that sceanrio than earning 5% interest on my deposit in the bank whilst house prices around me are increasing 10% YoY.

Apols if this point is being over done on HPC at the mo...

[porca misèria]

Si1, on 20 February 2012 - 09:45 AM, said:

no they shouldn't, I agree, but even now on their incomes at this time in history they should not be either

There was a brief window of opportunity for something close to that in the 1990s. So of course that becomes a historic norm for whingers.

Quote

the boomers generation, outside the public sector, have very little as far as I can tell besides housing wealth, which they are holding onto and will lose as prices subside, for example, it is the way of things

The 'boomer generation' have had many years of life to separate savers from spendthrifts, winners from losers, etc. Those who've done well are sitting on lots of assets (less what they spend on their kiddies), those who've done less well are sitting on little or nothing, without much time to catch up.

A generation hence, it'll be another generation in that position.