Posted on 08/07/2019 5:47:46 PM PDT by Tolerance Sucks Rocks
A booming economy should help people make good financial decisions since more money can be directed to other needs. That is why savings rates normally go up as the economy improves. People naturally tend to take advantage of better days especially after bad or slow times.
This is not happening now. Many Americans are spending more on consumer goods, but they are not saving their money or accumulating wealth.
No Emergency Funds
Nearly a quarter of households, for example, do not have any available emergency funds according to a survey conducted by the SSRS research firm. Another third do not have any wealth or have negative wealth outside the value of their homes. There are no signs of change on the horizon.
Such facts should set off alarm bells. However, it appears most people continue their spending habits. The survey shows that most situations have changed little or even worsened despite good times. In fact, sixty-two percent of those surveyed said they were somewhat or very comfortable with their emergency savings. This comfort was shockingly shared by one in five of those who have no emergency savings. The report laments that “many families are living on a knife’s edge, yet not resolute to do anything about it.”
Such statistics are more than just numbers. There are always those who experience hardships and are struggling to do something about it. This does not seem to be the norm. Most prefer not to worry about their financial future. They are optimistic and believe misfortune will not visit them. Yet others believe they can rely on others to help them. They think family, friends or government will see them through troubles.
(Excerpt) Read more at returntoorder.org ...
An oldie but a goodie.
PING!
Perhaps they’re paying down debt.
That IS a Goodie.
Glad my brain never worked that way.
Future and current generations are in for a rude awakening. :(
“Perhaps they’re paying down debt.”
Best laugh of the day so far. And I REALLY can’t believe how bad my age group peers are, who should know better.
One of the best ‘explanations’ of a debt ceiling:
The sewer line breaks and raw sewage pours into your basement up to the windows and is slowly rising.
DO YOU:
A. Call a plumber, repair the line, clean and aerate the basement
OR
B. get four or five jacks and place on ceiling, pushing the upstairs floor UP so as you can RAISE THE (DEBT) CEILING and take on more raw sewage?
“Wealth” is nothing more than money you earned but didn’t spend on Escalades, bling and ho’se.
That is entirely possible. I know I am.
A global glut of savings had a lot to do with the 2008 crash. There was so much global money chasing a return that mortgage backed securities looked great. The supply of investable money was there so the financial wizards created a product to buy.
Today, the same dynamic is distorting things.
Globally, people are saving more which reduces consumer demand and increases the money available to invest.
Demand for goods isn't booming because people are saving, so businesses aren't borrowing money to spend on expansion.
Without borrowing, interest rates stay low, now below zero in a lot of the world and almost so in the US, so the only place all these savers can find a decent return is in equities.
Not sure where the bubble is but it feels like there's got to be one - largely due to a savings glut.
I’m a ‘90’s kid, and I was taught to always save whenever possible. I had a college fund, but I never took advantage of it, and all of the funds went to college costs until it wound up needing to be diverted towards medical costs. My brother used his to pay for necessities instead of finding a job, but still managed to put money away after he did get one.
I honestly don’t know where money goes when people blow it like that. If you have kids, sure, they’re costly. Depending on where you live, like here in Chicagoland, rent and property taxes are ridiculous. Fair. Cars are also expensive, in insurance, maintenance, fuel, and the sheer purchase price if bought new. Okay.
I’m a gamer, but I’ve never blown money needlessly. I’m seriously ill, so I’m home all day, but I take care of the house, cook meals, care for the dog, grocery shop, go to doctor’s appointments, and game in free time. It’s something my husband and I do together, too. Actually, when we started seeing each other, it was how we bonded when I was too sick to leave the house because it was online.
Seriously.. Delayed gratification. Come on. You blow your money now on a (probably) nice apartment with high rent now, or save that money and live in a studio so that you may have a nice home later. Ditto for cars. Which would you rather have?
That only works if those have the means or willingness to help.
That's not always the case.
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