I remember stepping into the “National Bank” as a young kid with my father. I loved the smiling ladies at the counters, which were within eye shot of the door and in the middle of a sprawling, beaituflly tiled floor. The echoes made no sense but looking up made you forget about that.
My dad took me in the back vault, with its drawers and cramped quarters. Someone would open the room and leave us to it. It wasnt as sneaky as what Breaking Bad or Total Recall, there were no ill gotten gains or fragments of memories in there, there were only safe bets.
My father had certificates of deposit (CDs). They had yields of somewhere between 5-10%. Yes, this was ages ago. Probably bought when Carter was president but at least when Reagan was around. These were the safe bets for the future, what you were supposed to do with your money. (Paying for college, mortage, etc).
We were told to save our money, put it in something with low risk. If it wasnt a CD, it was some treasury device, or a 401k for some. But my father didn’t see twenty years down the road.
The truth was that I had to work harder for a 5% yield. It was surprising what I had to do in my 401K to get 5%. (I would get slammed one year and do well the next). Most treasury investments aren’t a good idea, the govt isn’t a trustworthy entity considering they spend like drunken sailors and do their “darndest” to water down the value of our money.
I wouldn’t have ever imagined that the last time we walked out of that vault that the preferred investments wouldn’t be worth our time when I would become the person considered about future finances.
Fast forward a bit, I mention to my father the brutal truth. I have to take on a hell of a lot more risk to get paid for my time and money use. I had decent luck “playing the ponies” but logistically don’t have a chance to do it more often. My father was flabbergasted when I mentioned how many people make money off of speculative investments (like certain crypto). He thought it sounded silly.
But I also had mentioned to him that no one can make money loaning out money. I talked about big gambles like ForEx and short term stock “plays”. I mentioned that people with some semblance of logic could make either “hobby” money or additional income out of these.
I struggled with this, considering I was told that a four year degree and a honorable discharge were supposed to set me up for success. The reality is that it didn’t. It made a frugal lifestyle survivable but it wasn’t the Irish gift it was supposed to be.
I ended a conversation with my father with this circular logic gem:
I can actually lose money playing it safe but earn 5%-15% with educated gambles. Why am I being rewarded for what the evangelicals bemoan? Why must I gamble to play it safe?