What you write may be true, but it's far from certain. If you keep your money in a mattress instead of investing it, you are not hoarding any actual resources that might be put to a productive use. You are only hoarding green pieces of paper whose value and usefulness from an individual's perspective is perfectly clear, but whose aggregate role in the economy is complicated and ill-understood. The question of what consequences for the whole economy follow when you empty your mattress and invest the dollars is not at all easy, and I'm not sure if anyone is able to give a full and accurate answer.
(Not that any of this should matter for an investor, but your reasoning in the above comment does seem fallacious to me.)
Yes, you are correct.
More technically, holding AU dollars instead of other financial instruments effectively raises the demand for the good used to produce AU dollars (I would guess that is AU government bonds) relative to other financial instruments, but doesn't raise the total demand for investment directly.
Hey everyone,
I'd like too see if I can utilize the rational powers of Less Wrong
Currently I work full time. Am well paid for my age. Have approximately $20,000 AU in savings.
My spouse is in uni. Will finish this year and begin working next year. But currently I am supporting our household.
I have recently concluded that $20k is too much to be sitting idle, and the rational thing to do would be to find a way of putting those savings to work in some fashion. But how?
What would be the best way of utilizing these finances in terms of self-development and/or monetary return?
A few things to consider:
a) My skillset at the moment is limited, but I am eager to learn anything.
b) I only desire money in that it enables me to carry out many plans that would be difficult otherwise.
c) Relationships are far more important to me than money, however money is still pretty high up there.
I come to Less Wrong because it is the only community whose advice I would trust. The rest of the internet as many scammers, most friends and family feel threatened by the idea of investment/new things etc. Also they just aren't as rational as Less Wrong.
I would be so appreciative of any advice given.
Also anyone in the same boat?