Reply #3: Uh, no. [View All]

[Don Galt]

You're right about the paper money being worthless... I really think people should buy gold. Since we've been runnign trade deficits, there's a lot of dollars out of circulation in foriegn banks. Eventually they will come back and their existance will affect the value of the dollar (eg: percieved inflation)... and this is not good. Right now they sit there and don't circulate and so its like they dont' exist.

But the reason most people have a negative worht is they don't manage their money well at all.

Yes, refinancing houses to buy stock, becoming day traders ,relying on debt-- especially credit card debt-- are all bad activities.

When we had the boom in the economy from 1995-2000 people's incomes went up and their free cash flow went up as well.

But they did not invest this, on average... they spent it, and more on credit.

The average net worth went DOWN.

I know dozens of co-workers who bought too much house, fancy cars, and lots of toys ... they made really good money but are in debt up to their eybals. These are top %5 incomes in the country type people but they have zero net worth because they spent more than they were bringing in.

I, on the other hand, spent very little money. I lived on a bit more than I had when I was making minimum wage and saved the rest. I have a decent net worth now. The difference between me and them is not income-- one example- a boss of mine, was making almost twice what I was making during this period.

The difference is I saved my money... so even with stock mistakes and a general decline in the economy and being out of work for over a year, I am "rich".

At the same time, I ahve a friend who grew up dirt poor. Father ran off, etc. She got a part time job and made a little over minimum wage. Over the next three years-- starting literally with less than $100, she has managed to save 6 months worth of income and grow to a decent salary with few skills other than the ones she picked up on the job. She went from welfare to "rich" in three years with a GED.

Capitalism is not a ponzi scheme. It is the best weapon yet found against poverty. The reason so many americans are poor is that they chose to live for today, rather than save for the future.

Its amazing how easily you can get into the realm of the top %20 of net worth in this country--- only because the vast majority of people have a negative net worht because they bought a huge house, on debt, spent all their money on stuff, etc.

Oh, and had kids. Kids are really expensive. You have kids and you're setting yourself up for poverty... so don't have them if you can't afford them. I doubt even %1 of the population who has kids actually thinks about how much they cost, and extremely few of them actually try to calculate it out.

Its really easy to blame the president, or the economy, but the facts show that people have only themselve to blame-- during the greatest economy we've had in the last 50 years, they spent far more than they took in. Now things are tight and they're hurting? Hmmm... I wonder why.