I read an article in the latest issue of the Economist. The title of the article was Economists Confirm It’s Actually OK to Not Save Money in Your 20s.
First off, that’s a bad title because it gives their point of view away. Which means most people won’t even read it. They’ll just leave with the impression it’s ok to be financially irresponsible.
Anyway, besides that, I wanted to see why they thought it was ok for people in their 20s not to save money.
Here’s what the article says…
“In other words: When you’re younger, you probably don’t earn much money, and your expenses tend to be relatively high. During this period of your life, it’s natural to save less (or not at all), with the idea that you’ll make up for it by saving more later on.”
OK, so this economist thinks it’s ok to save nothing when you’re young – and you’ll “make up for it” later?
How’s that working for Americans?
According to MarketWatch, the median savings for Americans aged 55-64… is $6400.
That’s a pretty bleak retirement for millions of Americans.
Then the article goes on to say…
“After you stop working, the ratio will shift again and you’ll spend down those savings.”
Why would you ever want to spend savings when you can live off cash flow instead – and never touch the principle?
That’s how you ensure you never outlive your money.
This economist is doing our kids a huge disservice by letting them off the hook so easy.
But I guess I shouldn’t be surprised.
Listen to what those “smart” economists got wrong in the past…
- Irving Fisher said the stock market was about to boom… just days before the crash of 1929.
- Ravi Batra wrote a book called The Great Depression of 1990. The book became a bestseller – but the depression never came.
- In 2007, Alan Greenspan said the Fed would raise rates to double digits. 15 years later, rates are rising – but nowhere near double digits yet.
Sometimes economists do get it right. After all, even a broken clock is right twice a day.
But they’re wrong a lot too.
The bottom line? It’s dangerous to blindly follow economists.
Besides – most economists are broke.
So why listen to them?
If you want to get rich, do what rich people do instead.
– Grant “Master Closer” Cardone
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