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Thread: extremely 'scary' financial statistic in today's Trib ...

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    Banned Melonie's Avatar
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    Default extremely 'scary' financial statistic in today's Trib ...

    (snip)"Mark Zandi, chief economist at Moody's Economy.com, said one surprising development was how deeply young workers were going into debt to maintain the living standards they wanted.

    The U.S. personal savings rate sank below zero last year for the first time since the Depression, meaning that Americans spent more than they earned. But for households under 35, the saving rate has plunged to minus 16 percent, meaning young Americans are spending 16 percent more than they are earning"(snip)

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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    Yes, I just finished reading a new book: Strapped, why 20 & 30somethings can't save. It discusses this very topic, & more. How the cost of living has/is going up, more demand for jobs to have a degree, & the price of education going thru the roof. Job salaries not nearly keeping up w/the cost of living. Not just affecting this age group of course, but nearly everyone.


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    Yeah, that's really sad.

    Fortunately, I do have a savings account at www.ingdirect.com. They and www.citibank.com have really good rates, considering they're just savings accounts. (as opposed to CD's and better).

    Not only are people overspending, but on the other side of this money issue, by not utilizing savings accounts and what not, we also hurt the economy as a whole. If that money is not in the banking system, it is not there to be lent to entrepreneurs, or other businesses for research and development in order to build our economy. That's one reason why Japan is technologically ahead of us. They're savings rate is really high and their policy is to spend a lot of money on R&D . They are more innovative than the US and most other developed countries.






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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    not to drift too far off topic, but the Japanese tendency to save money instead of spending money is primarily based on 'job insecurity' ...



    The jist seems to be that the Japanese have essentially done away with seniority based employment practices, and paycheck amounts / continued employment is now contingent on individual performance versus that of other employees. This has led to a 10% unemployment rate among middle aged Japanese men.


    Also, keep in mind that much of the highly touted R&D done by Japanese corporations is actually financed by the Japanese gov't and not from the profits of the corporations themselves

    I agree that Japan is far ahead of the USA in one area ... surviving a 'bursting bubble' economy !

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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    I like to go on bankrate.com, for comparison of savings, cd products & etc. as suggested by Melone.


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    I wonder if this -16% is due to what kind of debt.

    For example, school loans are going up the ying yang - but that is pretty long term debt.

    What I am trying to say, is that this is not happening because the kid bought a new stereo system.

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    Banned Melonie's Avatar
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    Default Re: extremely 'scary' financial statistic in today's Trib ...

    I'll agree that student loans play a part. However, based on rising delinquency data, in sheer dollar volume a large piece of the 'borrowed money' that under 35's are spending has to be coming from 'cash out' home equity loans and refis, as well as from auto loans and from rising credit card balances.

    Arguably, many people in the 35 and under group have convinced themselves that, because they have invested the effort to obtain a college degree and a white collar job, that they are 'entitled' to the same sort of lifestyle / standard of living that an American who had a college degree and a white collar job 10-15 years ago enjoyed. When the reality of today's pay rates and cost of living hit them squarely in the face, many are not able to accept a lesser lifestyle / standard of living than they envisioned when graduating from high school 10-15 years ago as long as 'easy credit' provides a method of obtaining the lifestyle / standard of living that they dreamed about.

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