Why I wouldn’t store money in the bank for High Interest Rates again.

Today, I wanted to reflect on a quote by Peter Schiff about the potential pitfalls of shifting from stocks to long-term cash holdings. The lurking danger? Inflation diminishing the value of that cash over time.

This takes me back to February 2005. While pursuing my PhD, I received a bursary of 4,000 pounds. Being financially stable from side gigs at the university, this was extra cash for me. My initial intention? To buy Amazon stocks, which the Financial Times had pegged as the "next big thing."

However, a bank manager swayed my decision. Without giving direct investment advice, he touted the allure of a 6% fixed interest rate, framing it as risk-free growth. Unfortunately, I took the bait. A year later, I spent the matured amount on a new Xbox and a top-of-the-line 1080p screen.

Now, let's consider an alternate reality. Had I invested in Amazon, by 2010, my 4,000 pounds would have grown to 16,000. By 2015? 77,000 pounds. And by 2020? A staggering 365,000 pounds. I shudder to think what it'd be worth today in 2023.

This tale underscores the unparalleled power of asset growth versus holding cash long term. No matter the interest rate, cash simply doesn't provide the growth potential of a well-chosen asset.

That's my lesson for today. Hope this story resonates with you. Thanks for listening.
@veedstudio