How would you feel if you worked all your life lived within your means? Saved a lot of money then lost it all in a failed bank, a bad fund manager.
Yes you are insured for 250k but what if you had 2 million in savings.
WELL WAKE UP! THATS EXACTLY WHAT HAPPENING.
That is part of it. Alot of people have way too much trust in the wrong people. Scams are nothing new in human society the last mess with Alt A mortages and robo signing of loans and defaults shows what the system thinks of the average citizen. They are sheeple, fooder, plebs, and nobody will save them.
Alolt of people we lead down the primsrose path right into wealth destruction.
I elected not to by a house and I stand buy my decision. People are told it is a wealth building asset. If you take 100K and buy a house vs. buy 100K and buy 10 blocks of SPY. You will be ahead and more liquid by putting money into the SP500. A residence is a cost. People focus here in the states on all the upsides to home ownership. The state likes it and promotes it because it is a major source of revenue. Property tax,school tax, gargbage tax, water tax, etc.
The cost of home ownership are understated and sometimes not stated. Real purchasing power for people has dropped,incomes have dropped the cost of living is rising there is very little captial to put into reserves with this scenario. The media does help the issue by spinning the data to fit the agenda. If there is not another economic boom,reality will set in and is a vicious cycle in a stagflation economy.
We don't save because we have access to credit and the ability to spend more. We have access to space to afford two cars, big houses filled with furniture, etc. And accumulating is a primal instinct.
If we didn't have access to credit (like in emerging markets) we would all be savers because we would have to pay for our stuff in cash.
And if we didn't have space to own two cars or a lot of furniture, then we would save more because we phyiscally couldn't spend. There is a limit to spending if you live in a 200 square foot studio.
I live in that pighole of a socialist europe where the government takes 50% of your salary, you don't get to work for your own pockets untill after the summer, and still people over here save more then 10% of their income.
What gives?
Is it because the FED has run a more inflationary course then the ECB eroding the purchasing power of the dollar causing people to search for alternatives?
Or is it the US spirit where people are always on the outlook for the next bubble to grow so they can hop on and become rich overnight?
Or is this how capitalism is supposed to work? If you can't cut it bad luck and good night see you in the souplines?
Because American culture is inherently individualistic, egocentric and based on temporary sensual self gratification, which is why most people would blow their paycheck on a holiday, flashy car, expensive clothes, ridiculous gadgets just for that moment of decadence with no thought of long term planning.
Look at steve jobs, he knew this very well, all his products are named I-something. The American psyche can be simply defined as "I,me,myself".
If people save, then a lot of excess capital is created that causes imbalances, pushes down interest rates and creates bubbles. People should enjhoy life, spend a lot and just save for what they absolutely need.
Saving made sense when currencies were tied to a commodity. Now saving does not make sense that money is credit. The more you save the more credit is destroyed, i.e. when you save, money is destroyed and the economy goes down.
I guess two people here will understand this. One is trefoil.
