Damilola Esebame at TheStreet covered Robert Kiyosaki's latest warning that dollar savers are losers, with his usual fix of gold, silver, bitcoin and ethereum. TheStreet asked me what is actually happening to cash in a savings account. My answer: Kiyosaki is half right.
The problem he is pointing at is real and measurable. A dollar held in cash since January 2020 has lost about 22% of its purchasing power. The average savings account pays 0.61%. Inflation is still running above 3%, and gross federal debt crossed $39 trillion in March. That gap between what cash earns and what prices do is not safety. It is a slow leak.
The fix is where I part ways with him. Gold, silver and crypto swing far too much to hold money you might spend in the next year. Someone who moves their emergency fund into bitcoin to beat inflation has traded a 3% problem for a 50% problem.
The answer is not to dump every dollar into something volatile. It is to match the money to the timeline. What I told TheStreet: for cash you can leave untouched for six to twelve months, short-term Treasury bills are worth a serious look. They were yielding close to 4%, the interest is exempt from state and local tax, and the principal is as safe as it gets.
That is not exciting. It is not a headline. It is the difference between earning something and earning almost nothing while prices climb.
Read the full article at The Street →
