The big debate in the coming months will be whether something historically unusual can be achieved: a soft landing of high interest rates and control of inflation without causing a recession causing a sharp rise in unemployment. The familiarity with which we have normalized it as something easy to manipulate makes us disdain history. It took Paul Volcker, chairman of the Federal Reserve from 1979 to 1987, nearly a decade to bring the CPI down from 11.8% to 4.3%, a level that would still double the goals of current monetary policy, but was reasonable for the time.
The only positive lesson is that, without a doubt, what we have experienced with the very sharp rise in prices has taught a whole generation, because Margaret Thatcher said that “the invisible thief of those who have saved is inflation”. In four years, leaving our money still or in a piggy bank has made 20% of what we had evaporate.
To ensure that inflation does not become a losing battle against savings, long-term investment and periodic contributions are the only rules to follow. Even the long term would be enough if life were longer. I like to say that investing is tattooing an annualized rate of 7% to double our savings every decade, thanks to what Albert Einstein described as the most powerful force in the world: compound interest. Reaching 7% annualized to double investment every decade is not an empty statement. This is why the Eco30 was born, the diversified index for selecting quality stocks, which In almost twelve and a half years, it has accumulated a profitability of 150%and which became an investment fund with Tressis Eco30 Walletwhich has achieved an analyzed profitability of 7.5% since its creation in October 2018.
Aiming for 7% should be the first commandment of our investment religion, because anyone tattoo Live each day as if it were your last; fall seven times, get up eight; do it or don’t do it, but don’t try, as Master Yoda said. If we respect our first commandment as an investor, let’s imagine that on the day we were born, someone gave us a thousand euros. Do you know how much money we would get if we collected that amount at age 80 to cover our last needs? More than a quarter of a million. The systematic practice of using this simple investment model with planned and real financial objectives would be one of the alternatives to guarantee pensions.. I believe in the solution where the State would provide a thousand euros for each newborn and invest them intelligently to capitalize and guarantee a large part of the future pension of newborns. The problem is that there are politicians and not statesmen.
