Changing to Stay the Same

If you put a dollar in a 0% interest bank account, you will effectively lose almost all of it over a long enough period of time.

As the value of that dollar drops due to inflation, which in moderation is a feature, not a bug, of a healthy economy, your spending power will eventually drop to zero.

How do we combat this? We take on risk. We buy assets that can go up. But assets that go up can also go down. Even if that risk is tiny (a government bond, say), and even if the risk is ultimately shouldered by the bank, the dollar amount in that account has to change in order for its value to stay the same.

This is true, of course, for everything. The world around us is constantly changing, which means that to stay the same, we have to change too.

But change involves risk, and so, we're left with a paradox: Even if you want to keep things as they are, the safest course of action is to take risks.

Subscribe

Daily thoughts on living more intentionally and creating work that matters.
Email address
Subscribe