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(Wall Street Journal)   Thanks to the Great Recession, people under 35 are now doing something with money called "saving"   (blogs.wsj.com) divider line 27
    More: Spiffy, shahs, moving average, risk averse  
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4940 clicks; posted to Main » on 06 Mar 2013 at 8:33 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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Archived thread
2013-03-06 08:39:27 AM
6 votes:
Shame our economy is designed to punish savers.
2013-03-06 08:46:33 AM
3 votes:

Slaxl: Why? Haven't we just seen a collapse caused by the same issues that are still going on, and any money you have in banks will be lost when they go under because next time we can't bail them out? Live for the now, because when we're all 70 the man who didn't save will be as poor as the man who did save.


 My father saved his entire life and just about when he was going to collect his pension, it vanished.

And now they are coming for his (and yours) social security.  And you know what?  They will get it, they will get it all.
2013-03-06 08:43:15 AM
3 votes:
Saving what exactly? Wages are stagnant and costs are rising across the board.
2013-03-06 08:44:06 AM
2 votes:
Saving up for the move out of their parents' house.....
2013-03-06 08:40:36 AM
2 votes:
If you've no debts and have $10 in your pocket you have more wealth than 25% of Americans. Link
2013-03-06 01:43:09 PM
1 votes:

seanpg71: How is your employer saying "I"ll pay you X in 3 weeks, and Y when you retire" any different than "I'll pay you X+Y in 3 weeks, and you can put Y in an account you'll use when you retire"?


It is different because the former is a promise that can be broken, where the latter is an account in your name and under your control that can't be taken away because your employer went out of business. Jesus, this isn't rocket science.

If you are only relying on a pension and Social Security for your retirement then you are a farking retard, period.
2013-03-06 01:30:33 PM
1 votes:

wildcardjack: I've got $20k idling in the bank. I'd buy a CD just to stash it out of reach for a year but at 1% interest it's not worth the hassle. I'm keeping it liquid so I can do something crazy, like move for a job.


I suggest you look at what your bank offers for low-load mutual funds.  I have an intermediate term bond fund through USAA that is my "safe and stable-ish" investment that returned 8.9% net last year.  There is probably something offered by your bank that might not be as safe as a CD, but that yields a return well above inflation.

The real issue is the college tution hike.  State schools used to be affordable for in-state tuition.  Since I was attending school in 2003, most school tuition costs have gone 10+% a year.  The school I attended now costs almost 3 times what I paid in tuition and fees.  It is going to be very hard for graduates to find jobs that can pay off that debt in any reasonable amount of time.

I am under 30 and I have well over a years salary saved for retirement, and more than another years salary saved for emergency/house-down-payment/ect.  I do not believe that the average student graduating today will be out of school debt by the time they are 30, let alone be able to save for retirment/future.
2013-03-06 01:28:16 PM
1 votes:

DerAppie: Also, if we are duscussing purchasing power how does a higher inflation (compared to the official number) not factor into it? Especially if we assume that once upon a time wages were corrected for an inflation number, which was artificially reduced, and that inflation correction on their wages is something people can only dream of?


It does factor, but not as much as one would think. There are other mitigating factors out there that can affect purchasing power than inflation, especially when its as low as it is. The number we are discussing on the micro level is wage share which is wages compared to preferably GDP to factored cost since including the factored cost will include that previous macro inflationary number we discussed earlier.

Of course then we get into the debate of what wage cost is and how it doesn't factor in that mythical thing some economists call 'value added', which when you try to pin them down on what the fark is value added and how do you even measure it they hem haw and go into a word soup.

Trying to pin down value added, and even remotely arguing that its a major factor is like using a diving rod to find water.

seanpg71: For instance, Apple currently has like $150B in cash. That's $150B that's currently not doing a whole lot for the economy. We'd prefer that they spend it on R&D or new capital as that employs people and creates jobs and new products. A bit of inflation encourages Apple to do that as their pile of cash is at best really just holding steady in value. Whereas if we had deflation, Apple would actually benefit by just stockpiling more cash.


And this is why most economist are trying to figure what the Fed is trying to farking do. They want to keep inflation below 3% but at the same time they are trying to inject money in the system. its like you cannot have farking both people, and free money does not an economy make. They make the argument, well if its lower than obviously its easier to borrow. I am still trying to farking figure out that one.

Yes, as a bank who has shareholders and a requirement to make them money

"I am going to do it by blowing on this guy named Vinny. Sure his business plan is a little weak and our return is honestly only around 2% but damnit if we just don't got this pile of farking money sitting around doing nothing. Here Vinny, here's 200m for your start up!"
2013-03-06 12:53:02 PM
1 votes:

DerAppie: ringersol: HotWingConspiracy: "Shame our economy is designed to punish savers."

High savings and deflation ain't so great either.
Having to choose between them, I'll take our problems over that.

Serious question, why is deflation bad? Sure, it is not smart to take on debt, but if left to a natural cycle inflation and deflation will pretty much negate each other. Money will, on average, maintain its value instead of devaluating year after year.

Besides, deflation might be bad for debtors but inflation is bad for the people lending the money. They need to charge higher interest rates to ensure that they won't lose money on the deal.


If your money loses a little bit of value every year, people are motivated to do *something* with it.  Be it stick it in a bank, invest it in stocks, buy video games, start a business, buy a car, etc.

With deflation, one of your best options is to keep your money in a matress.  There is less incentive to go make your money do something.  For any given person, this may not make a huge difference, but on the aggregate, it's  a drain on the economy.

For instance, Apple currently has like $150B in cash.  That's $150B that's currently not doing a whole lot for the economy.  We'd prefer that they spend it on R&D or new capital as that employs people and creates jobs and new products.  A bit of inflation encourages Apple to do that as their pile of cash is at best really just holding steady in value.  Whereas if we had deflation, Apple would actually benefit by just stockpiling more cash.
2013-03-06 10:57:58 AM
1 votes:

CapeFearCadaver: CapeFearCadaver: joness0154: As you spend money on a TotalFark account...

I was sponsored.

Also, no cable, no home internet, 14 year old truck, cheap cell phone and plan, beans/rice/ramen are my foods (as my stomach grumbles), cheapest TP, soaps, cleaners there are, etc, etc, etc. No debt or credit cards.

But thanks for playing Mr. Keeping up with the joness.


Try corn + beans as a veggie staple.  They have complimentary amino acid profiles, one of the reasons the natives did so well on the "three sisters" gardens they had before they all died of our small pox.  Also growing your own herbs inside is a good way to make bland food much less so, and is easy, and fresh and dried grocery store herbs are about the worst value there is.

/font of obscure but occasionally useful knowledge
2013-03-06 10:17:48 AM
1 votes:

waterrockets: ltdanman44: Slaxl: Why? Haven't we just seen a collapse caused by the same issues that are still going on, and any money you have in banks will be lost when they go under because next time we can't bail them out? Live for the now, because when we're all 70 the man who didn't save will be as poor as the man who did save.

 My father saved his entire life and just about when he was going to collect his pension, it vanished.

And now they are coming for his (and yours) social security.  And you know what?  They will get it, they will get it all.

Pension? Social Security? I don't think saving means what you think it means.


The point was you need money when you retire.  Where that money comes from doesn't matter if its not there for you when you need it.
2013-03-06 10:12:24 AM
1 votes:

AlwaysRightBoy: People under 35  lived through the Great Recession of 1929?

/ doesn't know what we would have done with this last one if was as bad as the one 1929


Yes, we experienced the Second Great Republican Recession.

We know who to thank.
www.muslimvideo.com
2013-03-06 10:11:39 AM
1 votes:

ltdanman44: Slaxl: Why? Haven't we just seen a collapse caused by the same issues that are still going on, and any money you have in banks will be lost when they go under because next time we can't bail them out? Live for the now, because when we're all 70 the man who didn't save will be as poor as the man who did save.

 My father saved his entire life and just about when he was going to collect his pension, it vanished.

And now they are coming for his (and yours) social security.  And you know what?  They will get it, they will get it all.


Pension? Social Security? I don't think saving means what you think it means.
2013-03-06 09:32:47 AM
1 votes:
Two16

Indeed.
2013-03-06 09:17:30 AM
1 votes:
I got two very good pieces of advice that I try to follow.  One from a friend's dad about ten years ago "Live below your means and you'll never be wanting", although at the time I wasn't making much and had tons of debt so it was hard to save.  The second was from a friend who suggested I add a big chunk to my 401K every time I get a raise.  If you calculate right, you'll still be getting a slightly bigger paycheck and your saving for retirement.  It's been a while now and I'm close to the max.  Being able to follow either of these requires having a good job to begin with and getting pay increases, which is a massive problem across the board for many sectors of the economy.  I think we'll need a cultural shift to fix the problem of siphoning income and wealth to the top.
2013-03-06 09:15:45 AM
1 votes:
hard to save what you don't have.
2013-03-06 09:12:59 AM
1 votes:
I'm just saving up some money until Gun and ammunition prices come back down.
2013-03-06 09:06:41 AM
1 votes:
I put my "savings" into materials and supplemented it with sweat equity on my 65 year old house. And yes, this was mostly before 2008 (but even then I knew the bubble was going to pop). The protracted recession, though, smashed our home value despite living in flyover country. And now we can't sell the place at break even price.

The modern economy is a scam for everyone who doesn't work in finance.
2013-03-06 09:01:55 AM
1 votes:

dynomutt: The government doesn't need to send armed troops to steal your savings, if you keep it in a bank.

They just need to keep printing and printing (or its electronic equivalent).

Read "When Money Dies", especially the vignette about the German woman who broke her leg skiing, stayed in Switzerland for about a year to heal up, and came home to find that her entire life savings was less than the cost of the stamp of a letter from the bank indicating that her account balance was too small to keep the account open.  BTW: The numeric balance of the account had not gone down.


Go ahead and explain what hyperinflation in Weimar Germany has to do with our current economy (inflation last year was ~2%).  I'll wait right here.
2013-03-06 08:59:11 AM
1 votes:

dynomutt: Read "When Money Dies", especially the vignette about the German woman who broke her leg skiing, stayed in Switzerland for about a year to heal up, and came home to find that her entire life savings was less than the cost of the stamp of a letter from the bank indicating that her account balance was too small to keep the account open. BTW: The numeric balance of the account had not gone down.


This scenario also assumes that world investors who trade in currency lose their confidence in said currency and it gets reduced to junk status.

I don't think the dollar is going anywhere any time soon given that in the most recent nation bond auctions we got interest rates that basically amount to the world giving us money for free. No seriously for every hundred dollars we now borrow we have to pay back something like a 6th of one cent.
2013-03-06 08:55:34 AM
1 votes:
People will always live outside of their means in order to appear as if they are financially on par with whatever reality show cast is popular at the time ie. Kardashians, Hiltons, Honey Boo Boos

kill me
2013-03-06 08:54:57 AM
1 votes:
Not just saving- getting married as well.

Live off of one person's paycheck, put the other person's paycheck entirely into savings. In a few years you could buy a modest house for cash money.
2013-03-06 08:53:00 AM
1 votes:

WhippingBoy: KrispyKritter: Good for them. Seems like some young people appear to be very anti-materialistic too, although these claims are sometimes made while they are texting with one hand while removing the earphones with the other. Big difference in what one wants and what one needs.

I want power over who lives and who dies.


And I need you to have that power.

/In case you ever get it remember I was the first to say this
2013-03-06 08:48:39 AM
1 votes:
I keep a pretty large savings only to supplement my investments of which I made about 20% growth in 2012. I don't generally live my life like the governent will collapse at any time like the first few Farkers here do and I profit from it (and I'm barely middle class).
2013-03-06 08:38:08 AM
1 votes:
Because saving at today's savings rates is a sign that you are well prepared for the future.  Also, note to self, look into that undercoating thing, just like the folks on the Jersey shore did prior to Sandy.
2013-03-06 08:34:53 AM
1 votes:
"saving"

I love that super duper ultra special account with limited withdraws that net you 1%*.  The lying farks gradually reduced that 1%* to .5%.  Lying mother farkers said it was a guaranteed 1%* for at least the initial deposit.  LYING MOTHER FARKERS!
2013-03-06 08:10:22 AM
1 votes:
Why? Haven't we just seen a collapse caused by the same issues that are still going on, and any money you have in banks will be lost when they go under because next time we can't bail them out? Live for the now, because when we're all 70 the man who didn't save will be as poor as the man who did save.
 
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