Over 11%, while the average annual rate of return on bank deposits is only 2%. If two families put their money in the bank and the other buys a house in full, those two families will be eighteen years later.
There will be a five-fold gap in wealth, and if the family buying a house buys a house through a mortgage, that is, with leverage, the financial gap between the two families will reach more than ten times.
Only because one generation of people invested money in different assets, they eventually became a two-class family. It can be seen from the figure that bank deposits have been lower than the inflation rate for a long time.
In other words, by depositing time deposits, family wealth has been shrinking. Although historical data tells us, the average annual income of buying houses and stocks is much higher than deposits.
But most families still deposit their money in the bank because deposits are safer. Even if the real interest rate is negative, the nominal amount of money with interest and principal still seems to be too much.