The mattress principle
Putting it under the mattress or burying it in the soil next to the tomatoes is not really an option. There’s a big problem with the hoarding mentality and it goes by the name of ‘inflation’. This constant upward march in prices means money will be worth substantially less in five years than it is today. Consider this: With annual inflation at a relatively benign rate of 3%, $100 today will buy only $86 worth of groceries in five years. If you are hoarding money under your mattress you’re actually squandering it, not saving.
Cash earning interest in the bank is better, but not much. Once inflation and taxes take their cut, you’re still going backwards, even in the high-interest accounts that are popular these days.
Next Section: Higher returns
