"Going broke safely"

“Going broke safely” (or “go broke safely”) refers to an investment—such as a certificate of deposit from a bank—that keeps the principal of the investment safe, but grows at a very low rate of interest. Inflation that is higher than this interest rate means that the money invested will steadily be worth less and the investor will “go broke safely.” To avoid “going broke safely,” investors often take their money out of the bank and put it in the stock market or other investments.

“Go broke safely” has been cited in print since at least 1994.

28 March 1994, The Orange County Register (Santa Ana, CA), “Money Q&A,” Business, pg. 11, col. 4:
Certificates of deposit and bonds are good recessionary hedges but not inflationary hedges. Investors who have the majority of their assets in such investments are positioning themselves to “go broke safely.” Very conservative investors with a long time horizon should have some money in stocks.

7 November 1994, The Orange County Register (Santa Ana, CA), “Money Q&A,” Business, pg. 11, col. 4:
During periods of rising interest rates, a fixed-interest annuitant may be positioned to “go broke safely,” Romero says.
(Financial planner Karl Romero.—ed.)

Google Groups: misc.invest
60 day rollover period on IRA’s
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6/26/96
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Keep investing in CD’s in your IRA and two things I can guarantee you are: 1) you may never lose one penney of principal but, 2) the penneys you earn and the principal you invested won’t be worth spit when you need them at retirement. CD’s are a fools game. False security. A perfect way to “go broke safely!”

Google Books
How You Can Become a Millionaire:
Your lifetime guide for building wealth and achieving financial independence
By Edward A. Dzwonkowski
Huntington Beach CA: Great Spirit Pub. Co.
1998
Pg. 92:
GOING BROKE SAFELY
You can call it “going broke safely.” These people played it “safe” but it came back to haunt them because they didn’t realize that Inflation the Money Monster was truly the beast that it is and inflicts the damage it does.
Pg. 95:
Inflation the Money Monster will see to it that “Playing It Safe” equates to “Going Broke Safely”.

Google Books
60 Minute Tax Planner
By Edward A. Lyon
Paramus, NJ: Prentice Hall
1999
Pg. 104:
It’s no surprise that many investment advisers dismiss CDs as “going broke — safely.”

Google Books
Smart Couples Finish Rich:
9 Steps to Creating a Rich Future for You and Your Partner
By David Bach
New York, NY: Broadway Books
2001
Pg. 137:
Actually, there’s a technical term for that land of retirement strategy: I call it Going Broke Safely!

Google Books
The Truth about Variable Annuities
By J. Marc Ruggerio
Lulu.com
2010
Pg. 11:
The only other 2 options would be to remain in a purely guaranteed investment that would allow the client to go broke safely and allow inflation to terrorize their income and lifestyle daily until they become poverty stricken.

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Safe Money Management
April 21, 2013 at 7:00pm ·
“Going Broke Safely” –- A Losing Strategy from the Present
A new and equally troubling pattern has emerged. While it’s not an active strategy – it’s more the result of an investment pattern. “Going Broke Safely” refers to keeping most or all of your money “safely” in the bank in CD’s, savings accounts, or money markets often earning returns lower than 1%. The current rate on a 1 year CD stands at 0.79%, as of January 3, 2012. While there is the safety of principal behind those cash investments, two factors could likely erode that buying power over time – taxes and inﬂation.