Time & Money

Saving for a secure retirement takes time. Wealth is rarely created over night and those who come into easy money often squander it. Given sufficient time small amounts can add up, with minor adjustments in spending habits yielding awesome results.

For example, having a Cappuccino every other day, rather than daily, could put an extra seven dollars a week toward retirement savings. It doesn't sound like much, but compound over 30 years at 8 percent and the result is $45,000. As an alternative bring lunch to work one day week and achieve a like result. Saving money can be a lot of fun when approached with a bit of creativity and an eye on the future.

                                                        Roger l. Caron

Saving & Spending

The first year the Bureau of Economic Analysis began to track saving data was 1959. The personal savings rate was then 8% and remained in the 7% - 8% range through out the 60s. In the early 70s, the rate spiked, hitting a peak of 14% in 1975. The sharp up-tick coincided with a deep recession during the same time period. Then in the early 80s, another recession brought about high inflation accompanied by weak economic activity, referred to as "stagflation". During this period the savings rate climbed above 10%, then fell back again as the economy began to recover.

Yet another recession occurred in the early '90s. The savings rate held steady during this recession and then proceeded to plummet over the rest of the decade. By January 2000, the average savings rate was 3% and would fall to 1% or less multiple times from 2000 and 2010. With the economy near collapse in 2008, the savings rate began to trend higher, moving from 1% in January of 2008 to 4% in December of 2009.

What caused the dramatic drop in the savings rate between 1990 and 2008? The psychology of the US consumer took a dramatic shift due to a surge in credit availability. The proliferation of easy credit made people want to spend like there was no tomorrow. Interest rates were low, the real estate market was sky rocketing and people were in a mood to spend rather than save. And spend they did, abandoning the thrifty mindset of earlier generations. The savings rate dropped to zero, leaving many over extended as the housing bubble burst,  and the economy went off a cliff in 2008.

The bottom line, when folks feel good about their circumstances, they spend more. When their worried about their futures, they save more. Hence the book title: Save and Grow Rich "How to turn Small Change into Large Fortune".

                                                                     Roger L. Caron

Save & Thrive

The incomes of most Americans make us among the richest people on the planet. In spite of this apparent largess,  most  folks never manage to accumulate significant wealth. In reality large numbers of US workers are only a few paychecks away from insolvency.

Even more distrubing, many with annual household incomes of $100,000 and up have surprisingly small amounts saved for retirement. The reason for this paradox is a lot of folks have simply lost sight of the virtue of saving. Success with money is not complicated. It is easy to believe more income is the answer, when in truth the solution is to learn how to better manage the income one already receives.

                                                       
                                                                                                       Roger L. Caron