Why americans do not save

[patientrenter]

bubba, I’ve saved diligently for over 35 years, never taking much risk (=banks and money markets) until very recently. It’s been a losing proposition over the long haul and even in different countries, net of inflation, taxes, and expenses. I would definitely advise you and NeetaT and others that taking no risk is just a loser in the long run.

If and when enough savers like us desert low risk investments, they might actually pay a positive return. Don’t hold your breath!

Patient renter in OC

[Coronita]

I recall a thread "free money" posted here recently. It was about how people at a kmart trampled on each other because they found out that you could get an instant $4000 unconditional "CREDIT" if anyone applied. People jumped on it like there was no tomorrow.

$4000. That's pretty pathetic.

The way I look at it, at any point in time there are people putting money into a pot(spending) and people taking money out of a pot(earning/saving/investing). You need people to put money into the pot so you can take money out of the pot. If everyone were just savers, this economy wouldn't move, because everyone would want to take moeny out of the pot to save or invest- we'd all be screwed. Fortunately, there are far more people putting money into a pot then taking out from it. Although the never of people taking money out of the pot are now more global (IE china, india,etc).

 

 

[Coronita]

I recall a thread "free money" posted here recently. It was about how people at a kmart trampled on each other because they found out that you could get an instant $4000 unconditional "CREDIT" if anyone applied. People jumped on it like there was no tomorrow.

$4000. That's pretty pathetic.

The way I look at it, at any point in time there are people putting money into a pot(spending) and people taking money out of a pot(earning/saving/investing). You need people to put money into the pot so you can take money out of the pot. If everyone were just savers, this economy wouldn't move, because everyone would want to take moeny out of the pot to save or invest- we'd all be screwed. Fortunately, there are far more people putting money into a pot then taking out from it. Although the never of people taking money out of the pot are now more global (IE china, india,etc).

 

 

[Coronita]

I recall a thread "free money" posted here recently. It was about how people at a kmart trampled on each other because they found out that you could get an instant $4000 unconditional "CREDIT" if anyone applied. People jumped on it like there was no tomorrow.

$4000. That's pretty pathetic.

The way I look at it, at any point in time there are people putting money into a pot(spending) and people taking money out of a pot(earning/saving/investing). You need people to put money into the pot so you can take money out of the pot. If everyone were just savers, this economy wouldn't move, because everyone would want to take moeny out of the pot to save or invest- we'd all be screwed. Fortunately, there are far more people putting money into a pot then taking out from it. Although the never of people taking money out of the pot are now more global (IE china, india,etc).

 

 

[Coronita]

I recall a thread "free money" posted here recently. It was about how people at a kmart trampled on each other because they found out that you could get an instant $4000 unconditional "CREDIT" if anyone applied. People jumped on it like there was no tomorrow.

$4000. That's pretty pathetic.

The way I look at it, at any point in time there are people putting money into a pot(spending) and people taking money out of a pot(earning/saving/investing). You need people to put money into the pot so you can take money out of the pot. If everyone were just savers, this economy wouldn't move, because everyone would want to take moeny out of the pot to save or invest- we'd all be screwed. Fortunately, there are far more people putting money into a pot then taking out from it. Although the never of people taking money out of the pot are now more global (IE china, india,etc).

 

 

[Coronita]

I recall a thread "free money" posted here recently. It was about how people at a kmart trampled on each other because they found out that you could get an instant $4000 unconditional "CREDIT" if anyone applied. People jumped on it like there was no tomorrow.

$4000. That's pretty pathetic.

The way I look at it, at any point in time there are people putting money into a pot(spending) and people taking money out of a pot(earning/saving/investing). You need people to put money into the pot so you can take money out of the pot. If everyone were just savers, this economy wouldn't move, because everyone would want to take moeny out of the pot to save or invest- we'd all be screwed. Fortunately, there are far more people putting money into a pot then taking out from it. Although the never of people taking money out of the pot are now more global (IE china, india,etc).

 

 

[mixxalot]

I disagree- saving is always beneficial.

Even with low rates of return and decline in power of the dollar- it is nice to have money in the bank to buy things cash versus credit. Interest charges on credit are way higher than save and pay cash.

If you have ton of cash in bank why not just use it to buy gold and ETF funds for better rate of return?

[mixxalot]

I disagree- saving is always beneficial.

Even with low rates of return and decline in power of the dollar- it is nice to have money in the bank to buy things cash versus credit. Interest charges on credit are way higher than save and pay cash.

If you have ton of cash in bank why not just use it to buy gold and ETF funds for better rate of return?

[mixxalot]

I disagree- saving is always beneficial.

Even with low rates of return and decline in power of the dollar- it is nice to have money in the bank to buy things cash versus credit. Interest charges on credit are way higher than save and pay cash.

If you have ton of cash in bank why not just use it to buy gold and ETF funds for better rate of return?

[mixxalot]

I disagree- saving is always beneficial.

Even with low rates of return and decline in power of the dollar- it is nice to have money in the bank to buy things cash versus credit. Interest charges on credit are way higher than save and pay cash.

If you have ton of cash in bank why not just use it to buy gold and ETF funds for better rate of return?

[mixxalot]

I disagree- saving is always beneficial.

Even with low rates of return and decline in power of the dollar- it is nice to have money in the bank to buy things cash versus credit. Interest charges on credit are way higher than save and pay cash.

If you have ton of cash in bank why not just use it to buy gold and ETF funds for better rate of return?

[procrastinator]

The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net

I watched a lecture by Elizabeth Warren recently on UCTV that shed some light on the question of why Americans do not save any more. She did not blame the Fed or those superthrifty Asians and oil exporting countries. Tracing the effect of these external factors on spending decisions of a household would be difficult with any degree of rigor. Instead she looked at the income and expenses of American households directly, and made some shocking comparisons between the start of her time series (early 1970s) and the present. The gist is that the real incomes did not grow much, the income per worker did not grow at all (!), the discretionary expenses (the TVs and clothes and stuff people usually point to as symptoms of consumerist excesses) decreased, while the near-obligatory big ticket items that one cannot easily economize on (mortgage, health insurance, child care, transportation) grew dramatically. Note that this work does not need to invoke ‘moral shortfalls’ and other such nonsense to reach its conclusions. It is left as an exercise to the reader to deduce the connection between this deterioration of household cash flow and Fed’s actions if you are so inclined.

http://www.uctv.tv/library-popup.asp?showID=12620

[procrastinator]

The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net

I watched a lecture by Elizabeth Warren recently on UCTV that shed some light on the question of why Americans do not save any more. She did not blame the Fed or those superthrifty Asians and oil exporting countries. Tracing the effect of these external factors on spending decisions of a household would be difficult with any degree of rigor. Instead she looked at the income and expenses of American households directly, and made some shocking comparisons between the start of her time series (early 1970s) and the present. The gist is that the real incomes did not grow much, the income per worker did not grow at all (!), the discretionary expenses (the TVs and clothes and stuff people usually point to as symptoms of consumerist excesses) decreased, while the near-obligatory big ticket items that one cannot easily economize on (mortgage, health insurance, child care, transportation) grew dramatically. Note that this work does not need to invoke ‘moral shortfalls’ and other such nonsense to reach its conclusions. It is left as an exercise to the reader to deduce the connection between this deterioration of household cash flow and Fed’s actions if you are so inclined.

http://www.uctv.tv/library-popup.asp?showID=12620

[procrastinator]

The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net

I watched a lecture by Elizabeth Warren recently on UCTV that shed some light on the question of why Americans do not save any more. She did not blame the Fed or those superthrifty Asians and oil exporting countries. Tracing the effect of these external factors on spending decisions of a household would be difficult with any degree of rigor. Instead she looked at the income and expenses of American households directly, and made some shocking comparisons between the start of her time series (early 1970s) and the present. The gist is that the real incomes did not grow much, the income per worker did not grow at all (!), the discretionary expenses (the TVs and clothes and stuff people usually point to as symptoms of consumerist excesses) decreased, while the near-obligatory big ticket items that one cannot easily economize on (mortgage, health insurance, child care, transportation) grew dramatically. Note that this work does not need to invoke ‘moral shortfalls’ and other such nonsense to reach its conclusions. It is left as an exercise to the reader to deduce the connection between this deterioration of household cash flow and Fed’s actions if you are so inclined.

http://www.uctv.tv/library-popup.asp?showID=12620

[procrastinator]

The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net

I watched a lecture by Elizabeth Warren recently on UCTV that shed some light on the question of why Americans do not save any more. She did not blame the Fed or those superthrifty Asians and oil exporting countries. Tracing the effect of these external factors on spending decisions of a household would be difficult with any degree of rigor. Instead she looked at the income and expenses of American households directly, and made some shocking comparisons between the start of her time series (early 1970s) and the present. The gist is that the real incomes did not grow much, the income per worker did not grow at all (!), the discretionary expenses (the TVs and clothes and stuff people usually point to as symptoms of consumerist excesses) decreased, while the near-obligatory big ticket items that one cannot easily economize on (mortgage, health insurance, child care, transportation) grew dramatically. Note that this work does not need to invoke ‘moral shortfalls’ and other such nonsense to reach its conclusions. It is left as an exercise to the reader to deduce the connection between this deterioration of household cash flow and Fed’s actions if you are so inclined.

http://www.uctv.tv/library-popup.asp?showID=12620

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