Savings are Good

Newsweek had a blather-filled piece which got our attention the other day. The very idea that savers should not be saving, because the economy needs rescuing, is very confusing to us. If the economy is tanking, as we believe it is, is it not prudent to save as much as possible? Why should savers sacrifice their financial well-being on the altar of preserving appearances?

This is part of a disturbing trend which we've been watching develop: the propensity of the mainstream to blame savers for the economic woes of the world. 'Savers are ruining everything!' the press seems to whine, apparently forgetting that savers – as the backbone for the credit industry – have every right to stop investing, if their money isn't being well-treated.

It has been stated by others, but we will add our voice: one cannot become rich by overspending one's income. If one wishes to live comfortably in one's 'golden' years, for example, one must prudently prepare for such an eventuality. Savings, in their many forms (from certificates of deposits to gold bars), are the vehicle for this... or for starting a new business, or taking on an apartment building, et cetera, et cetera.

If memory serves, John D. Rockefeller once stated that, if one wished to be rich, one must save half of one's income. He, as the world's first billionaire – and those were silver dollars back then – is a high authority on such matters. He did not say to spend 150% of one's income; rather, he was living proof that the prudent savings of one's income was a road to financial success. So rich was he, that his descendants still live upon the vast wealth he accumulated.

So... who should one listen to: a writer for Newsweek, or the first billionaire? We know who we'd choose. Mr. Rockefeller may have been a bit... off... but he prospered in good times and bad.