• shortwavesurfer@monero.town
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    6 months ago

    Gold… Okay, well technically it inflates by 1.8% per year, but at least that’s steady and predictable. Where some years the dollar inflates by 3% a year and some years it inflates by 10%.

    • Please_Do_Not@lemm.ee
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      6 months ago

      So the solution to 401k inequity is employer-sponsored gold reserves? I think just returning to a pension system probably works…

      (Nor are any of the issues with 401ks mentioned in the article related to inflation)

      • shortwavesurfer@monero.town
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        6 months ago

        I don’t know if a pension system would work as it seems like pensions were primarily for people who stayed for 20 years at one single job and nobody really does that anymore. But employers giving their employees gold wouldn’t be a bad thing. The article did not mention inflation, but it is a serious downside to a 401k. As an example, in 40 years, any money you save now will be worth 20% of what it currently is worth. If you save $100 at age 20 in a 401k, then by the time you are 65, that $100 would be worth something like $10 in today’s purchasing power. That’s an incredibly dumb thing to save in.

        • Please_Do_Not@lemm.ee
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          6 months ago

          Except that 401ks are invested. By default they tend to be invested in a relatively stable, diverse portfolio along the standard long-term investment guidelines of ~60/40 balance of stocks and fixed or cash holdings. Mine made 15% last year invested even more conservatively than that, and it’s a no-name 401k provides by my small employer. I would have made significantly less with gold.

          If you think people’s 401ks are just sitting there in a low-interest checking account, I don’t think you understand how they’re actually structured.

          • shortwavesurfer@monero.town
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            6 months ago

            Oh, I understand. I get that the money is invested in things that will grow over time, but you’re still having to take risk in order to get that return. Otherwise, what happens is you lose your money to inflation. At least with gold, it’s a steady rise and will not fluctuate a whole lot. Gold holds your purchasing power with very little risk at all.

            • Please_Do_Not@lemm.ee
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              6 months ago

              You’d find very few financial advisors or experts who would recommend putting your retirement portfolio entirely in gold.

    • TranscendentalEmpire@lemm.ee
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      6 months ago

      Okay, well technically it inflates by 1.8% per year, but at least that’s steady and predictable.

      Where are you getting that info from? The price and value of gold is insanely volatile, its value often changes based on people’s confidence in fiat currency.

      Gold doesn’t have an inherent value, and is just as easily manipulated by governments as fiat currency. FDR changed the value of gold to print more money to sustain the recovery after the depression.

    • sugar_in_your_tea
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      6 months ago

      That’s… just not true. Gold fluctuates quite a bit. Check out this site and put it at 15 years, you’ll see a period from 2013 to 2016 where it consistently lost value relative to the US dollar. It’s a speculative investment.

      If you want something that doesn’t lose value to inflation, look at treasuries. I-bonds are the “best” here because they match exactly the government’s inflation number, but they’re limited to $10k/SSN/year. Or you can get t-bills, which aren’t guaranteed to match inflation, but they are usually somewhat close. Or get TIPS, which track inflation, but work a bit differently.

      But that’s solving the wrong problem. For retirement, you want growth, not value protection. Check out this graph of the S&P 500 vs gold value. Play with the numbers, and you’ll see that, over any interesting term, stocks outperform gold. So don’t but gold, buy a diversified portfolio of stocks (e.g. an S&P 500 fund is a good option). Stocks will fluctuate more than gold (in most cases), so you may want to buy a more stable investment to help level out the growth. Most people use bonds for this, but if you like gold, you can have a little gold of you like as well. If you’re risk averse (i.e. you’re likely to sell if your portfolio drops significantly in value), so something like 60% S&P 500, 30% bond fund, and 10% gold (again, if you like gold, otherwise just increase the bond position).