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Old 02-06-2008, 02:19 PM
 
Location: Olympus Mons, Mars
5,703 posts, read 8,607,225 times
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The government is also to blame. There is a huge disincentive to save in this country, infact the government does NOT want you to save but spend. They have caused the credit bubble by decreasing the interest rates to nothing! What is the incentive to save if your money is not even earning enough interest to keep pace with inflation. Another factor is the devaluation of the dollar. Those who choose to save are being penalized.
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Old 02-06-2008, 03:33 PM
 
Location: Atlanta
738 posts, read 644,441 times
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Quote:
Originally Posted by k374 View Post
The government is also to blame. There is a huge disincentive to save in this country, infact the government does NOT want you to save but spend. They have caused the credit bubble by decreasing the interest rates to nothing! What is the incentive to save if your money is not even earning enough interest to keep pace with inflation. Another factor is the devaluation of the dollar. Those who choose to save are being penalized.
OK, that is the most idiotic statement I've heard in a while. First, nobody put a gun to your head and forced you to spend all of your money. Second, you can earn substaintially more than the rate of inflation on your investments. It is awfully easy to blame "the government" for your problems because you haven't been responsible enough to save your money. I live in the same country you do and have millions in savings. I don't feel penalized at all!
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Old 02-06-2008, 06:37 PM
Status: "0-0-2 Game On!" (set 5 days ago)
 
Location: The beautiful Rogue Valley, Oregon
7,308 posts, read 15,359,891 times
Reputation: 9493
No, it isn't a silly statement. Everything in our economy is geared to get us to consume and to be unhappy with what we have. Buy! Buy! To say that government and corporations bear no responsibility at all is like saying that the current mortgage crisis is entirely the fault of greedy buyers who took advantage of poor hapless loan brokers.

Were we to play the "blame game," there is a lot of blame to get spread around. Absolutely people should bear responsibility for their financial choices. But we live in an over-extended economy that only works BECAUSE people over-spend., it's set up to reward it. Lok at interest rates. Put the money in a bank, and you get 2-4%, and inflation is running higher than that (the true inflation rate is estimated 4.5-7%). As inflation increases, debt gets cheaper and cheaper - you're paying off the loan with lower-value dollars.
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Old 02-06-2008, 07:11 PM
 
48,516 posts, read 83,966,925 times
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That does not mean you have to do it. Millions and millions do in fact save and don't run up their credit accounts.For years there have been credit councilors and news programs on TV about this problem.IMO people are just greedy and get to the point that they con themselves.No one is going to hold your hand like when you were a kid.When it gets to the point that you are conning yourself;you are in trouble.
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Old 02-06-2008, 08:43 PM
 
4,711 posts, read 10,898,686 times
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The government most certainly does discourage saving....to wit: the taxing of interest income.
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Old 02-07-2008, 09:04 AM
 
13,323 posts, read 25,574,131 times
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But the pressure to consume is entirely external, market-driven. advertising whores succeeding. Any time you think you must have something because of its brand or its newness or what someone else will think, "they" have got you.
I can't believe that advertising people can sleep at night. What a disgusting business to be in.
Yet, if and when people stop buying stuff they don't need or truly want, the economy will come to a screeching halt. It's all set up wrong.
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Old 02-07-2008, 09:09 AM
 
13,323 posts, read 25,574,131 times
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There is a real disconnect in some people's minds about saving and getting older and all. In some cases, I honestly think they don't understand anything. When I was younger and more blue-collar and all, I simply thought, "How can anyone save enough money to stop working?" Etc.Now, there is a lot of good information out there, geared to the average person.
I don't know if people's parents had pensions or something, and people just vaguely assume that there is money somewhere? Sometimes I think people are just hiding their eyes from the trainwreck that they will become
One friend, age 55, with a 50-year-old stay-home wife and two 7-year-olds, just started a federal job with those benefits. He saves 4% and thinks that's good enough, and "I'll just have to work until I'm 70." They take a pricey trip every year, although assume they'll be unable to help their kids with college "We'll help them get grants and loans" (forgetting that there is a formula for parental contribution).
I think there are a lot of people like them. They want to think they're doing enough so they don't have to face the truth.And that's without any of life's curveballs that we all have seen.
What will happen? In the end, they'll do what they can. They won't like what they can/have to do. It won't be pretty. But at least they'll have a lot of company.
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Old 02-07-2008, 09:46 AM
 
Location: Home is where the heart is
15,400 posts, read 25,830,715 times
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Yes, there are too many people who just don't think about the long term consequences of their actions.

I have friends who are in the late 50's. Intelligent people, both with masters degrees (but apparently that doesn't mean you're smart...)

They were married 23 years. In their 20s and 30s they lived the high life and they were a little bit snooty about it. But even though they might look down on you if you aren't wearing designer clothes, they had a lot of redeeming qualities that made up for this.

About 5-6 years ago they got serious about saving for retirement and even though they got a late start they managed to amass a decent amount. The simplified their lifestyle, and they seemed very happy.

Last winter, the wife lost her job. She spent the next several months watching movies--and apparently these movies gave her the idea that her life was boring. (Note a red flag here--she blames movies and not herself for a very bad decision...)

In July she decided she was "bored" and suddenly walked out on her marriage. She had some crazy idea that she would take the money and live a more glamorous life.

Apparently nobody was having an affair, and there was no abuse going on, it was just about boredom. She spent the next several months blowing the retirement savings on luxuries that didn't make her happy. She found out her "boring" life wasn't so bad after all--but it was too late to go back.

Guess what she found out the hard way? A 58-year-old woman can't get away with the same lifestyle she had when she was 18. Men are no longer standing in line to take her out to dinner. She had a hard time getting a job, and the job she found did not pay well. She had a very hard time finding new friends. Instead of becoming more glamorous, her lifestyle is starting to become stark now that she has run through the money.

Overnight, a foolish whim turned this intelligent woman's life into a disaster. She says she regrets it, but she can't undo it. She tried to go back to the husband, but when he refused she retaliated by starting a nasty divorce proceeding which is wiping out much of the rest of their savings.

They had a good life and were financially secure--now both of them are in trouble. Neither one will be able to retire because somebody didn't think about the long term consequences of her actions. It will be sad to watch them as the years go by, to see them working and struggling much longer than they had planned. It's very sad.

Last edited by normie; 02-07-2008 at 09:56 AM..
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Old 02-07-2008, 09:58 AM
 
Location: Houston, TX
1,610 posts, read 4,394,801 times
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Don't you think there is a "postponement" mentality that engulfs most people? Realistically if each of us were to project our lives through to the retirement phase and make our spending/saving decisions based on what we would need to fund a reasonable retirement, we would be horrified at just how much we would have to forgo in the present to achieve the desired future. In a perfect world each of us would get an education that would prepare us for life-long steady employment in well-paying jobs. We would begin to save immediately upon starting our first job (saving for retirement as well as for any unexpected emergencies such as a job loss, car replacement, medical emergencies etc.) and most importantly, we would live on less than we make. But gee, where's the fun in that? How many of us are willing to forgo that house we can't really afford, or that big screen plasma TV, or that cruise to Alaska, or a new wardrobe whenever we get the urge? As a nation we have a sense of entitlement that convinces us that we deserve these goodies and that once we have all we need, THEN we will start to put a few dollars away for the future. We have been such a nation of spenders though that we have created a massive economy that depends on an ever-increasing infusion of new cash to keep all the balls in the air. But look where we are now - the balls are starting to fall and the only thing anyone can think of to stop it is to take money out of the Treasury and send it to taxpayers, hoping they'll keep shopping.
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Old 02-07-2008, 10:38 AM
 
Location: Western North Carolina
4,951 posts, read 7,883,246 times
Reputation: 10420
Here in the United States, the vast majority of people already have the absolute necessities that they actually "need" to survive - some type of shelter, enough food to eat and not starve, clothes on their body shoes on their feet, basic transportation, clean water. So marketing has been created to convince us that many things that are really just "wants" are things we "need" or "must have". We do not really "need" junk food, cable T.V., fancy cell phones that take pictures, the latest fashions each new season, vehicles that change radio stations at the sound of your voice (too much trouble to push a little button?), ever larger houses (and ever larger energy bills), etc. Because so many Americans, unfortunately, seem to lack independant thought, they see others with these things and feel like they have to have them too, whether they have to go into debt "up to their eyeballs" or not. I think it's a lack of personal self-esteem and "trying to fill the empty places" that drives so many to strive for lifestyles they cannot truly afford. We are a "got to have it now" society, borrowing for things that people used to save for and pay for in cash. It's hard to save when your're in a lot of debt.

At our house, we gave up cable two years ago when the cost started to get ridiculous. Why pay for a bunch of crappy shows riddled with commericals? Didn't cable start out billed as "Commercial free T.V.?" I went out and invested a couple of bucks on a few good T.V. antennas. If we really want to see a movie, we rent it. My kids moaned and groaned at first, but these days, no one misses it. We watch Law and Order, etc., and I catch the local news and Jay Leno at night. Plus, Public Television has some of the best quality broadcasting around. That's all we need. We don't miss cable ONE BIT.

I also traded "down" to a pay-as-you-go phone. Nope, it doesn't take pictures, doesn't sing me a song, and it's not hot pink be-jeweled or chocolate color. It's just silver, it rings, and I answer it. If my car breaks down, I won't be stranded without a phone. Boring, maybe, but I sure don't miss those monthy cell phone bill "surprises", and somehow my teenagers are continuing to live a social life without "texting".

We have choices, it just takes some thought about what you're really willing to pay for, and what you're not.
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