Quote:
Originally Posted by retiredguy123
Wrong question. Most wealthy people don't keep money in banks. That is one of the worst places to store your wealth.
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The day I retired, I calculated how much money I would have saved if I'd just left it in a government-insured passbook savings account, making the same 4.25% that all banks paid for the 100 years preceding the housing crash, when the government nationalized the banks and ended saving account returns. It came out to twice as much as I spent following Buffett's advice of buy-and-hold, on stocks that seemed to be undervalued by 20%.
For instance, I had Sun Trust during the housing crises, and sat on it for a year, as it slowly imploded (along with Phillip-Morris, Enron, etc, etc). I stupidly believed their balance sheet, which said they had enough cash in the vault to cover all those high-risk mortgages. I don't know if they did or not -- I suspect all balance sheets are just the lies for the rubes. But in the end it made no difference.
The day I opened my 401K and realized that I no longer had enough money left to pay off my own mortgage, the scales fell from my eyes. I went to cash, increased my savings rate to 20%, and retired a millionaire 10 years later, just from the money I DIDN'T lose in the Wall Street Casino.
If anybody actually knew how to make money in the stock market, you would be able to buy an annuity from the "experts" at any 100-year-old insurance company (having survived countless recessions), that would guarantee the stock market's average 10% return, in exchange for a cut of whatever you have left when you die.
Know anybody offering that deal? Me neither.
Some folks can make a living in a casino. They're not called "winners", they're called "dealers".