September 20, 2014

Hiding your money in the sock drawer/buried in the back yard exposes you to what type of risks? Why do people do it? Alternatives?

2 thoughts on “September 20, 2014”

  1. Garrett Haag says:

    Doing this exposes you to a very high amount of event risk, if something happens such as a fire or natural disaster you could lose everything that you have, you are more likely to get robbed if you have a large amount of money sitting around your house also. You are still exposed to inflation risk also, keeping your money in a hole is the same as a bank in this regard, your money is not growing at all, you also have opportunity risk, you are not making money with that money. You are better off keeping your money in Vangaurd, if you do not like market risk at all, go with a short term bond fund for a little bit of a safer return. people do this because they are afraid of market risk, they dont want to see their money go up or down like crazy, which is only on paper to start with, or they dont trust banks or institutions. Vanguard is a safe secure way to invest your money with less risk then many alternatives, you will still have market risk and a few others, but they can be dealed with.

  2. Mike Finley says:

    That was another fabulous answer, Garrett. Let’s review.

    There are many risks in this world and when we take the time to understand them all, we realize market risk (your money goes down in value based on trading volume) is only one type of risk we have to worry about.

    Follow Garrett’s advice. Educate yourself and go to to identify those inexpensive and efficient index funds and/or Target Date Funds that own index funds that own stocks and bonds that diversify your investments all over the world. Now go out there and take some risk!

Leave a Reply

Your email address will not be published. Required fields are marked *

The Crazy Man in the Pink Wig