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Step 2: Make Savings and Working Capital Work for You

How to Maintain an Acceptable Real Rate of Return in Different Interest Rate Environments

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Abstract

So far, we&3x2019;ve seen how to protect the purchasing power of your emergency fund so that it will have an excellent chance of paying your fixed expenses when you need it. The solution to the problem of inflation works well for funds that need to maintain purchasing power, but it has a drawback if you need to guarantee the dollar value of a certain portion of your cash assets in the near future. The dollar value of metals in your online precious metals account can go up as well as down in the short term, because the price is volatile.

Keywords

  • Interest Rate
  • Inflation Rate
  • Real Interest Rate
  • Real Rate
  • Bond Price

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© 2011 Paul M. King

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King, P.M. (2011). Step 2: Make Savings and Working Capital Work for You. In: Protect your Wealth from the Ravages of Inflation. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4302-3823-2_4

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