One of the most concerning news stories of recent weeks is our low national savings rate. Last year it was a negative 1.6%. The previous year it was negative 1%. This year’s rate is the lowest in over 70 years.
For most Americans, that’s just another financial figure that goes in one ear and out the other. For some it’s not surprising, as they know first hand the impact of our mounting debt on their finances. They know what it feels like to be beholden to the bank.
Yet, for those who have a real understanding of this figure it’s pretty scary. It means we are spending more then we have money coming in. And a lot of that debt is not going to things that are improving us or building our country. It’s one thing to be borrowing money to get an education or buy an house or pickup truck, it’s another to buying more toys then you really need.
There is a lot of evidence that we are buying more toys then we need. We are too often sold consumerism and become blind to our own means or the costs of our consumption. Indeed, the personal financial transaction is minor compared to all the stuff we are amassing as individuals.
All those material possessions had to come from somewhere. They involved the exploitation of some material whether close or far away from us. They may have or may not have brought money into the local community. More likely then not, these days, they didn’t. And then they have to go somewhere.
There is no problem with making investments into the future. Likewise, there is no problem with purchasing material goods. But we need to be reasonable at what we buy and realize that there is only so much we really need. We need to focus more on ourselves and our communities, and stop buying things.
"Americans’ are saving their money at the lowest rate in 73 years-the lowest rate since the Great Depression. The national personal savings rate was negative (!) 1% in 2006. That means that as a whole, the country is spending more than it is taking in. With the economy on a downhill slide, Americans may start tightening their purse strings. But I predict that instead, people will simply start running up more credit card and loan debt. They have gotten used to a certain lifestyle, and feel entitled to continuing living it."
Few things I find more creepy is targeted advertising. It attempts to “target” based on machine learning, which looks at interactions on social media, webpages browsed and search terms to find what is most marketable for the user, not what is most relevant to the user.
The amount of data that feeds into targeted advertising is quite creepy. And often it makes judgements about a person that are quite wrong, as it’s only looking at population averages with a similar profile, and trying to make an educated guess at what products can be sold to that person. Yet, one isn’t defined by what advertisers think they can sell to you, and you shouldn’t take too seriously what people are paid to put in front of you.
Every time I mention my anxiety, I am fed a steady diet of advertisement for Better Help online mental health services, and the free-to-call 988 anti-suicide hotline. Targeted mental health advertising is downright creepy! When I was concerned about my excess peeing and pooping — from all the water and fiber in food — I was fed a steady diets about prostate and stomach cancers. Maybe because of my google searches, but long after my doctor visit and tests confirmed I was mostly clean, it was still creeply messaging to me. And then since I’ve gotten interested in healthy eating, I see constant advertising for services for people with anorexia, and granola bars and other highly-processed “health foods”. Not foods that are actually healthy, but come with good mark-up for the food processors.
Since I’ve mentioned my issues with new landlord and my search for rural property, I’ve now been getting fed a steady diet of advertising about landlord tenant management software and speculative real estate investments. Then there has been a steady batch of advertising I’ve been consuming about moving services, and extended stay places, as if soon I am to become homeless. I don’t think my current living accommodations are sustainable forever, but I really don’t think I’m in immediate risk of homelessness, despite the bit of a game my new landlord played over the rent check. Clearly if I got notice of the upcoming rent increase in June, my landlord isn’t seeking immediate eviction. He just wants my money and $100 a month more of it come June. Ironically, no advertising for land or property, despite all the time I spend on Zillow and studying the property tax rolls.
Then there are conflicting advertisements I keep seeing between investing for high-net worth individuals and services directed to the poorest of poorest people, such as those on welfare and section 8 housing. I’m not neither — I don’t have a million in investable assets, nor do I get welfare benefits. I’m closer to the prior then the later but not there, yet — and I’ll probably blow it on land and livestock. Some of it’s my personal interest in ways of being frugal and a responsible investing, but it’s fascinating to see the conflict. Discount cellphone providers like Mint Mobile still really want my business, and so do discount internet providers for low-income persons. But the real reason I choose not to have internet at home isn’t poverty, but it’s for the sanity of not having all that commercial crap in my apartment and to save a bit of money.
I know I’m not defined by commercial advertising, which exists solely to sell products to me but it creeps me out how much it knows about me and how it tries to sell me things based on things I have searched or explored on the internet.
I keep seeing reports that Elon Musk is the wealthies man on earth. Typically such reports use net worth – a fairly simple calculation that takes assets minus debts. As he’s considered in his current role in government – a private citizen – his actual bank account balances are unavailable but his stock ownership is publicly reported as part of his compensation package of the publically traded companies he owns.
The problem with wealth calculation is it assumes that assets are fully liquid and accessible, and that if Elon Musk wanted to fill up his bank account tomorrow, he could sell all his stocks and have a $234 or so billion dollar balance. Of course, that is not a realistic calculation – as many of shares may be restricted by his contract on how quickly he can sell them to avoid depressing the value of stock he owns, not to mention if he were to sell of a big block of stock, it would trigger a reduction of value to stock as the market became flooded with shares. The tax man would also take a large portion of proceeds as Capital Gains taxes when such stock was sold off.
Wealth is werid in that way. Many people who have net assets of significance don’t actually have access to that much case. An extreme example might be farmers and especially dairy men, who might have multi-million dollar holdings when you consider land, cows, equipment and crops. But they struggle to feed their own family off that limited milk check they get, with necessities of supporting the business like repairing and replacing broken farming equipment and paying property taxes on land taking a fair greater priority then their own needs, if they want to their business and ultimately their farm operation and income to continue.
Net assets is a valuable comparison in sense it gives some kind of estimate between groups of people about wealth. People can sell off illiquid assets, even if it comes at a steep cost compared to on paper value. But does it provide the great ability of comparison that people often give it? Assuming Elon Musk doesn’t want to canabalize his assets, how much money does he really have? How much money is actually in his bank account that he can draw upon today, without selling assets? We really do not know.
