Savings ... something of the past?

cells

mwpt wrote: »

So my turn, you are missing the point. In a pure mathematical sense, you are correct that it is a zero sum game and we can't expect everyone to have positive real returns. But pure mathematics works on infinite series and so forth. The short term could be the next 100 or 200 years, or however long it takes. I don't think you can take your theory and apply it as gospel for any amount of time within our lives.

Yes within one human lifetime its possible to earn a real rate of return. You could say that for any one set of 50 year periods from now to 3500 years out but that positive return will be nullified by a negative return at another set of 50 years.

Simply put the safest assets will now yield zero or less due to overheads with a few periods above that and a few periods below that.

Clapton argues that the worlds economy can grow in real terms at more than 1% over the next 100 years. I agree however even growth will have to fall to 0% at some point because even a tiny real growth rate (eg 1% a year again) would result in craziness over the medium to long term. Eg 1% real growth in wages would mean in 2000 years time the minimoum wage would be £3 billion per hour in real terms...... That's clearly just plain stupid so economic growth will have to fall towards zero at some point

BikingBud

I see that my money is making money. It's just that a few are taking the larger percentage of it and not returning those gains to the many who are subsidising it.

It's being lent to subsidise interest free mortgages so house prices can be artificially inflated.
I see it subsidising FTB and QE leaving those who are cautious with a devalued pot. At least the Greeks and Cypriots were up front about stealing the money:(
I see it subsidising low credit card rates to entrap people to commit and build up large debts, when they are called in who will make the profit?

antrobus

cells wrote: »

Yes within one human lifetime its possible to earn a real rate of return. You could say that for any one set of 50 year periods from now to 3500 years out but that positive return will be nullified by a negative return at another set of 50 years....

I know you think you're being clever, but all you are doing is rehashing a garbled version of Marx's Law of the Tendency of the Rate of Profit to Fall.

Can't we just cut to the chase, and note that the end result will be a crisis of overproduction, the collapse of capitalism, and the rise of the socialist millenium? I will save a lot of faffing about.

cells

antrobus wrote: »

I know you think you're being clever, but all you are doing is rehashing a garbled version of Marx's Law of the Tendency of the Rate of Profit to Fall.

Can't we just cut to the chase, and note that the end result will be a crisis of overproduction, the collapse of capitalism, and the rise of the socialist millenium? I will save a lot of faffing about.

I've not read any of marx work

I dont agree with a crisis of overproduction nor of the collapse of capitilism however the last 50 years has shown us that thanks to technology and productivity we are becoming more and more socialist because ....well...we can afford to be.

At some stage technology and productivity and wealth will be so high that maybe you could view the result and think up a new ism to describe it.

redux

cells wrote: »

Well a dollar at 1% a year real return becomes worth an order of magnitude more than the entire worlds GDP in just 3500 years. Now 3500 years night sounds a long time but some trees are older and in sure we would both hope the human racebhas a lot more than 3500 years on this rock

The dollar didn't exist 350 years ago let alone 3500, and probably won't exist in 3500 years time.

Mistermeaner

redux wrote: »

The dollar didn't exist 350 years ago let alone 3500, and probably won't exist in 3500 years time.

I think of all currencies it has the best chance. I would say no dollar = zombies

Spirit_2

The thing that would worry me more than a lack of savings would be to have an
1) ongoing level of consumer debt.
2) Poor employment terms and conditions
3)Poor pension provision
4) A lack of friends, community (Social capital).

If you are usually employed good severance terms, long notice, generous redundancy terms, generous sick pay entitlements and a good pension scheme will go a long way to providing financial security to tide you over when disaster strikes and may be of more value than "six months savings".

Beyond pensions, having long term savings was not a priority when we were younger we prioritised spending income on education, having a "good" life. We were investing in creating a long term happy home. We have been at a point of having had surplus funds for a few years. At this point we saved, rather than squandered the surplus

My husband down shifted his working life in his 40's and we just reduced our outgoings to accommodate it. We have had our share of disasters. My terms and conditions meant financial worries did not add to worries whilst I was employed during one major health issue in my 40's. Following more recent lifechanging events and having contributed the maximum I could to employer pensions meant retiring in my mid fifties was not a financial problem .

We have spent a lot on ongoing healthcare and rehabilitation where specialist help is needed, the help we have had from our neighbours. friends and family has been beyond price. The return on our networks of social capital could be "monetized" to impute a value, however that return was never expected or meticulously planned. Just happen-chance arising from our lifestyle choices.

My advice to our adult daughter is to fund her pension and build a rounded life.Savings are just one bit of the mix, they are a cushion, on their own it is not enough as your own disaster may strike long before you can "afford" to have it and you may need more cushions around you.

Dan83

I don't save any of my salary, I have s small pot saved from various things, but ultimately will be spent when I need a new car.