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Doing Nothing is Not an Option
‘If it ain’t broke, don’t fix it’…well, guess what… It’s broken.
Things have changed significantly in the investment space in recent years, but for some reason, most people haven’t changed their approach.
You’ve heard it 100 times before - Interest rates are rising, inflation is everywhere, and bank deposit rates are close to 0%. Doing nothing with your money is no longer an option, yet it is the default position for so many.
During the 1980s, leaving your money in the bank was perfectly acceptable. Banks offered up to 15% on their savings accounts - Not a bad deal.
Diligently setting your money aside while it earned double-digit returns until such time as you could afford to buy your first home for a mere 30K was a pretty good deal all round.
But for some reason, people continue to do the exact same thing to this day despite the fact house prices are ten times higher, and bank deposits pay 100 times less.
The level of inertia here never ceases to amaze me.
Don’t Get Left Behind
When it comes to human behaviour, inertia is a powerful thing. People are inherently slow to change the way they have always done things.
We only ever change what is immediately and obviously damaging to use.
Unfortunately, the erosion of our wealth is discretely pervasive, so we often don’t realise what’s happening until it is too late. 0% return from your bank account seems manageable in the short run, but over longer periods, it has a truly profound effect on your future wealth.
To understand the longer-term effects of holding your money in the bank during an inflationary environment, consider the following example of the purchasing power of $10,000 in 1971, compared to today.
According to the Bureau of Labor Statistics consumer price index, prices in 2020 were more than 550% higher than prices in 1971. In other words, if you put $10,000 under your mattress in 1971, it would have the equivalent purchasing power of about $1,800 by today’s standards. Granted, there have been some large-scale inflation fluctuations over this period, but the compounding effects are no less apparent.
So, while zero returns on your money and higher inflation may seem manageable in the short term, they can have detrimental effects on your money over time.
The Game has Changed
Blindly doing the same thing the previous generation did in the hope of similar results is delusional.
There are people still trying to save more and more money in the bank just so they can afford to pay higher and higher prices, but the prices are going up faster than they can save. Saving 5k a year to buy that house that’s going up 10k a year? Sound familiar?
You need to tie your income to these rising asset prices if you have any hope of escaping the vicious savings loop in the long run.
Unfortunately, this is the reality for our generation. Ignoring it will ensure you are left behind.
What worked for your parents isn’t going to work for you. The onus is on you to create an investment plan that will put your money to work and tie your future wealth to assets that will increase in price over time.
Stop naively putting all your money in the bank, hoping that ‘it will all work out’. It doesn’t work like that anymore.
I have spent the last few weeks writing a guide to creating and managing your own investment portfolio. To receive a copy, sign up for my newsletter by scanning the QR code above or go to www.theislandinvestor.com.
News
Fassbender ready for second Le Mans appearance
Local Hollywood A-lister Michael Fassbender is in the final preparation stages for his second appearance at the legendary 24 Hours of Le Mans. The iconic endurance race is celebrating its […]

Local Hollywood A-lister Michael Fassbender is in the final preparation stages for his second appearance at the legendary 24 Hours of Le Mans.
The iconic endurance race is celebrating its 100th edition next weekend.
The Fossa star has already arrived in the famous French twon where he is involved in a week-long series of engagements including drivers’ parades, autograph sessions and more serious appointments like car safety checks, practice and qualifying.
Like last year, when he finished 16th in the LMGTE Am class, Fassbender has been entered in to the event by the German Proton Competition team with Estonian Martin Rump and the Austrian Richard Lietz.
Fassbender dreams of following the trajectory of fellow Hollywood actors Patrick Dempsey who was second in LMGTE Am class in 2016 and Paul Newman who finished second overall in 1979.
News
Ireland’s oldest citizen has Killarney connections
Ireland’s oldest woman met with President Michael D. Higgins at Áras an Uachtaráin this week. Máirín Hughes, who turned 109 on May 22 has strong Killarney connections. The previous record […]

Ireland’s oldest woman met with President Michael D. Higgins at Áras an Uachtaráin this week.
Máirín Hughes, who turned 109 on May 22 has strong Killarney connections.
The previous record was held by 107-year-old Nancy Stewart who died on September 10 2021.
Although born in Belfast, Máirín went to school in the Mercy Convent. Her father was a customs and excise officer and the family moved around a lot eventually coming to Killarney after spells in County Down and Dublin.
Her mother came from the Rathmore area and her father was from Newmarket in County Cork.
She attended the Mercy Convent and has, in previous interviews, recalled growing up on the shores of Lough Lein.
“Neighbours who had three children were given the job of taking me to school,” she said. “They were annoyed because the children were going to school for two or three years but I was put in to the same class as them – my mother had taught me.”
In 2021 she featured in the book ‘Independence Memories: A People’s Portrait of the Early Days of the Irish Nation’, sharing stories of being kept in school in Killarney during an attack on the RIC barracks down the road.
In 1924 she started a degree in science and a diploma in education at University College Cork, before working in the pathology lab in University College Cork’s Department of Medicine for 16 years.
last year she recalled her story on the podcast: ‘Living History – Irish Life and Lore’.
During the broadcast she talked about her parents’ membership of the Gaelic League in 1910; the Spanish Flu in Ireland in 1918; The Black and Tans in Killarney in 1921; the early days of the new Free State; Eucharistic Congress in Dublin in 1932, visiting the Basket Islands in 1929; and working in the UCC medical laboratory from 1932 until 1948.
This week President Michael D. Higgins hosted an afternoon tea event to celebrate the important role that a variety of people have and can play in different communities and Máirín was among the guests of honour.