: yeah totally. I ... By: freezazoid. on 16 Aug 10, 17:58:12 : yeah totally. I haven't properly researched the recent interest rates but i'm guessing the last few years has been about 5 or 6 percent. The figures the government claims is generally lower than the actual inflation rate. Seems like ten years ago I could buy a can of soda for about 50 or 60 cents...? now it costs about a buck. you do the math.
If the interest ... By: savingandinvesting. on 15 Aug 10, 23:53:31 If the interest rate is 3%? then that is the nominal interest rate - i.e. the one that you would see and speak about. Inflation could be 1% or 2% or any other percentage - if inflation were 3% then the real interest rate would be 0%, i.e. in real terms you would not be getting richer. This example is just about present and future values and these are all in nominal terms - it does not make any assumptions regarding interest rates. I hope that helps, Michael.
Well its because " ... By: NicosMind. on 15 Aug 10, 18:46:09 Well its because "This video basically took a long time to say: 100 dollars now is the same as 100 dollars plus interest a year from? now" is why i asked about inflation. Cause thats what he was getting at. That if you buy a bond with 3% interest all youve done is saved your purchasing power... Well almost preserves your purchasing power.
Plus i never trust government stats on inflation. Its always? higher.
: No. He didn't ... By: freezazoid. on 14 Aug 10, 19:50:28 : No. He didn't get into? inflation at all but the concept that he's talking about can be applied to inflation but in an inverse way: inflation hovers around 5 percent per year. So you should take that into account when making long term investments.
This video basically took a long time to say: 100 dollars now is the same as 100 dollars plus interest a year from now.
Sounds like youre ... By: NicosMind. on 12 Aug 10, 22:24:16 Sounds like youre saying if the interest rate? is 3% then inflation is 3%. Is that right?
Latest comments made on this video:
By: freezazoid. on 16 Aug 10, 17:58:12
: yeah totally. I haven't properly researched the recent interest rates but i'm guessing the last few years has been about 5 or 6 percent. The figures the government claims is generally lower than the actual inflation rate. Seems like ten years ago I could buy a can of soda for about 50 or 60 cents...? now it costs about a buck. you do the math.
By: savingandinvesting. on 15 Aug 10, 23:53:31
If the interest rate is 3%? then that is the nominal interest rate - i.e. the one that you would see and speak about. Inflation could be 1% or 2% or any other percentage - if inflation were 3% then the real interest rate would be 0%, i.e. in real terms you would not be getting richer. This example is just about present and future values and these are all in nominal terms - it does not make any assumptions regarding interest rates. I hope that helps, Michael.
By: NicosMind. on 15 Aug 10, 18:46:09
Well its because "This video basically took a long time to say: 100 dollars now is the same as 100 dollars plus interest a year from? now" is why i asked about inflation. Cause thats what he was getting at. That if you buy a bond with 3% interest all youve done is saved your purchasing power... Well almost preserves your purchasing power. Plus i never trust government stats on inflation. Its always? higher.
By: freezazoid. on 14 Aug 10, 19:50:28
: No. He didn't get into? inflation at all but the concept that he's talking about can be applied to inflation but in an inverse way: inflation hovers around 5 percent per year. So you should take that into account when making long term investments. This video basically took a long time to say: 100 dollars now is the same as 100 dollars plus interest a year from now.
By: NicosMind. on 12 Aug 10, 22:24:16
Sounds like youre saying if the interest rate? is 3% then inflation is 3%. Is that right?