2 responses

  1. Bruno
    2015-07-07

    Something of a cop-out feel-good answer to decadent spending habits of younger Americans. I earn practically nothing on my savings now. The majority of my savings was money I put there, not capital gains or interest. I’m low 50’s. However…

    1. Got a college degree by working summers and every holiday to pay for half of it. Went to a public college. Lived with 3 other roomates in a dump. No spring break trips. Just more work.

    2. My parents saved and we did without things so that I there would be money for the other half of the cost. No BMW leases, no cable TV, no big vacations, all of which are the norm today for people who make far less than my father did. I wore hand me down clothes to school. I played with sticks for a gun in the back yard..

    3. My first vacation as an adult came when I was in my mid 30’s. I had not seen the ocean since about 20 years earlier. How many recent college grads can say that? Not any I hear from.

    4. My first car was used. As was my second, third, etc. I bought a new truck for a business, finally. Regular cab, 4 cylinder, base model. No “near luxury” sedan as a “first car after graduation” here.

    5. Six day work weeks doing brutally hard manual labor in a small business till I was in my mid 30’s. Then I loafed and only worked 5 days a week. No “I have a degree, I don’t sweat” attitude here. My courtship with my wife consisted of her bringing me something to eat as I collapsed on the sofa exhausted. No hitting the bars for $20 bar brand drinks here.

    6. My furniture at my first home was used. Nothing nice till I was in my 40’s. My TV was bought at a scratch/dent sale at Service Merchandise. 25″. My ONE TV.

    7. No maid, no lawn service, no handy man service, if I breaks I stay up late and fix it.

    8. Had I reversed all this and done “the norm” I would have almost no savings, like most people today. Instead I will be retiring in my 50’s before I wreck my body further. This is all despite multiple crashes in the market and low interest rates.

    I don’t think telling young people “it’s not your fault” is productive at all. They will take it as carte-blanche to continue living the lives their parents couldn’t even afford.

    Reply

    • Keith Weiner
      Keith Weiner
      2015-07-09

      Bruno,

      Thanks for your comment. I tried to make a more nuanced point. Of course, I am not trying to excuse profligate spending. I am trying to say: the system offers perverse incentives. And we should not be surprised when those incentives lead to perverse outcomes.

      Reply

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