Cash, bonds, property, stocks: ranked by risk
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What is the purpose of this throwback episode and who are the hosts?
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Hi, I'm Sophie. I'm one of the founders of The Curve, and I went from being in 50k of debt, not understanding investing, knowing how to budget, save. I was a total financial disaster. Now I have two investment properties, over 100k in the stock market, and I'm in no debt. But I did not always used to be this good with money and investing. And it all started from the very beginning of this podcast. We're currently on a podcast break. So we're having two weeks off new episodes. And we wanted to do some throwbacks to the vintage OG episodes that were released originally five years ago when I knew nothing about investing. If you don't need to go back to these throwback episodes, enjoy two weeks without us in your hands.
But if you know anyone who's felt left out of the conversation when it comes to money, investing, or just really don't know where to start, please send them this podcast. We'll be back for regular programming at the start of October. Okay, this is the third episode that we ever released for the Curve podcast. It was all about the different asset classes. It's really, it's so funny to reflect on this because I remember when Vic would talk about asset classes and she would say, there's different types of assets. And all of these words were so foreign to me when we first started the podcast. And I remember thinking, can you please just use different language? And so these early episodes, I definitely ask a lot of questions.
So if you're new here or you're new to investing, hopefully it'll be really helpful to hear me ask a million questions just so that it feels super easy and these concepts land. But In this episode, we're talking about the four main asset classes. So that is cash, so just having money in the bank or in your wallet. Bonds, which is essentially like an IOU. We will explain that in this episode. Property, which is obviously an amazing asset class because you can borrow money and kind of amplify returns via leverage. It can also be quite dangerous if you are amplifying losses should the property market go backwards. Then you have stocks, which is obviously the main focus of this beginner series. So stocks being buying a little piece of companies that are public.
So the idea of this episode is to explain the different types or the different places that you can put money where you can get a return. A lot of us grew up thinking money in the bank is safe and clever and I can see it and I can use it if I need it. The problem with that is that the money is not really growing. And if you're in an environment where inflation is running quite high, which in the past five years you've probably heard inflation thrown around a lot, it means that you're kind of going backwards. So if your money is not creating a return that keeps up at least at the rate of inflation, so say inflation is at 3%, that means that say you have $5 and you can buy a coffee with it. I actually don't even think you can buy a coffee for $5 anymore.
In the UK, it's like 450 pounds. So anyway, the point is what you can buy with that amount of money will change because the next year, it will be 3% more expensive because of inflation. So your money just doesn't go as far. You don't have the same like purchasing power. And so the idea with keeping your money in the bank when inflation is high just means that you're kind of losing money. The concept is just inflation is like eating away at the value of your money. And so deciding where you put your money or where you invest in the different asset classes means a different return because some of those are safer options than others and that's really what we dive into in this episode so this will be a great episode just to lay the foundations of what are the different places that you can put your money where you can generate different types of returns so
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