Everything You Are Being Told about Saving & Investing Is Wrong
The comments below are an edited and abridged synopsis of an article by Lance Roberts
Saving money is a huge problem for most Americans, as noted by numerous statistics. To wit:
“Americans have an average of $6,506 in credit card debt, according to a new Experian report out this week. But which expenses are adding to that balance the most? A full 23% of Americans say that paying for basic necessities such as rent, utilities and food contributes the most to their credit card debt. Another 12% say medical bills are the biggest portion of their debt.”
That $6,500 credit card balance relates to the ability of an average family of four in the US to just cover basic living expenses.
“The gap between the standard of living and real disposable incomes is more clearly shown below (chart included). Beginning in 1990, incomes alone were no longer able to meet the standard of living so consumers turned to debt to fill the gap. However, following the financial crisis, even the combined levels of income and debt no longer fill the gap. Currently, there is a $3,200 annual deficit that cannot be filled.”
Up for discussion: Flawed advice; markets don’t compound; $1 million sounds like a lot—it’s not; don’t forget the inflation; and things you can do to succeed.