Let the good times roll!
Do you know how I’ve been warning everybody for years to save their money because Social Security is going to go belly-up and the government is heading towards bankruptcy paying for entitlements?
Yeah, well, I don’t get a lot of traffic here: “Savings rate at lowest level since 1933”: “Americans' personal savings rate dipped into negative territory in 2005, something that hasn't happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items.” We love our credit cards! Gimme, gimme, gimme!
4 comments:
I'm studying right now for my license in personal investing, and news like this just makes me want to puke.
The amount of financed money this country wastes on depreciating assets is astounding.
it's possible that the problem doesn't rest entirely on people who use their credit cards to buy $300 shoes and go on caribbean cruises twice a year
consider the cost of a college education these days.. I've been looking at going back to school, and the average cost for just TWO YEARS would exceed $25,000.. many of the people who are bringing down the numbers of personal savings are those who are just coming out of college now with huge amounts of debt in the form of student loans
http://biz.yahoo.com/special/youngearn06_article1.html
I'm currently working a decent job that I enjoy at a 'respectable company'.. but I've had precisely one raise in 8 years.. in fact, factoring in changes to my benefits, I've taken an actual pay decrease of 20% in the past 4 years.. 'actual' meaning the change in my paycheck after taxes, insurance, etc
the fact is that not everyone in this country has complete control over his finances.. especially given the current job market.. my state has an unemployment rate of approximately 4.2%, and one of the lower levels of new job creation in the country.. with little to no available jobs, employers are constantly cutting corners at the expense of employees and openly have the attitude that "if you don't like it, you know where the door is"
The problem with the savings study is that it stocks dont count as savings. I put 15% of my income into my 401k last year. But using their "savings" definition, I saved next to nothing.
it also doesn't count investments into properties.. home ownership has gone through the proverbial roof in recent years.. in order to buy a first home, nearly everyone dips very deeply into their savings, knowing that the immediate loss will eventually be recovered in home equity
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