hi uf,
The things that differentiate the Millionaire Next Door from his debtor neighbors are he spends less than he makes, and puts in a little time planning what to do with the surplus. If that's eccentric it might be time to redefine the term
unfortunately, the behaviors described in TMND are indeed eccentric these days in the US. this is a country where revolving consumer debt servicing averages 21% of disposable income--this amount does not include mortgage debt. 21% is basically an all-time high for this figure. while that may be atypical for the kind of people that spend their days in stock chatrooms on the internet, it is quite a thing to behold--the national average is to pay 21 cents of every disposable income dollar to service credit card debt and the like (and that may mean nothing more than making the minimum monthly payments with miniscule contributions to principle). given this situation, i find it incredibly sad that a Fed governor would tell people to hold hands and buy an SUV. life imitates pathetic art.
for people living on average incomes, freedom from revolving debt at a young age (or never having it in the first place) requires a rather unconventional approach to personal finances (although it may not seem unconventional to you personally depending on your age and how smart your parents were).
except for the very rich, at some point, consumers will have to balance the intense materialism driven into their heads by our consumerist culture, against long-term financial and life goals. a conscious renunciation (or more moderately, moderation) of this consumerism means taking on an eccentric set of values in our society imo.
unfortunately, the profligate nature of the American consumer has infected investors (who overvalue stock assets imo) and US corporations (who also carry record levels of debt) as well, so even if one is a PAW as per TMND, it may be more difficult than in the past to reach the hallowed ground of two commas, if expected returns still mean anything (imho). |
