Savers, Not Spenders, Succeed
Posted: October 4, 2012
Thornton Parker must have attended the same “economics” classes as Barack Obama (“Like Cream, Money Rises To Top,” Sept. 15). Sadly, they both come to the same conclusions.
The idea that we can spend our way to prosperity is toxic to economic reality. It ignores the reality that only “savers” accumulate assets that can be invested to create jobs, produce something of value, and create wealth. When was the last time Mr. Parker was hired by a poor person? I hope he has figured out some real investments for his retirement, because Social Security and Medicare are both going broke rapidly.
Here are some “real life” stories to illustrate the point. Recently I got to know a couple of “boomers” graduated from college in 1969. They both became teachers. They decided to be “savers” instead of borrowers, so they decided to live on one salary, and save and invest the other. They purchased a home with some land, so they could live in the “country.” They drove used cars, shopped at thrift stores and traveled using camping to save money. They had a very good life, raised two kids later in life when they could afford them, and were very successful.
They added acreage to the land during the years, bought a small private plane he could fly off the land, and finally, an island camp to fish and hunt from, and raise the kids in the summers. They retired with two Social Security pensions, one Teachers Retirement pension, and over $1.25 million in the “savers” retirement investment account that Mr. Parker tells us are “toxic,” and other assets worth about another $500,000. They were and are solidly “middle class,” but those kinds of assets would make this couple “rich” in Mr. Parker’s view. By the way, he was an economics teacher!
I had a father-in-law who was born in 1905, and lived through the Depression. He was a teacher in the Depression, and those years he spent his summers leasing one acre of land, raising tomatoes to sell at the market. He told me he made more money on that one acre of tomatoes than he made teaching school for a whole year. Did I mention he was also frugal? He retired; and his teacher’s pension, Social Security, and investment income made twice what he ever made teaching.
My father came to this country with the shirt on his back, and I hate to think about how little money in his pocket, worked hard, got married, raised a family of successful children and became “middle class” through hard work (sometimes a job plus running a farm), thrift, and faith in God. No one gave him anything. Thankfully, some had faith in him and lent him money when he needed to invest in farm equipment etc., but it was all repaid, and he saved enough to retire comfortably.
Another couple I know followed the same path as the above stories and retired with well more than $1 million in assets, from living the lifestyle in the first story above. It all comes from living within your means, delaying purchases until you can pay for them, and saving and investing. This couple made a small investment in an individual retirement account, when they were first available and it grew to more than $200,000, between 1980 and 2006.
The real wealth in this country was accumulating quietly at the lower levels of the “savers,” which is why Mr. Obama’s definition of “millionaires and billionaires” starts at $250,000. If Obama got his tax increase on the “rich,” it would amount to about $47 billion a year, against a deficit of $1.3 trillion a year. Think about it this way. If Obama could take all the income of all the people who make more than $250,000, per year, it wont’ cover that $1.3 trillion for just one year!
Class envy and “Obamanomics” won’t save us. They will destroy us very soon if we let them continue. That means all of of us: rich, middle, and poor!
Mr. Jantzi lives in Grottoes.
The idea that we can spend our way to prosperity is toxic to economic reality. It ignores the reality that only “savers” accumulate assets that can be invested to create jobs, produce something of value, and create wealth. When was the last time Mr. Parker was hired by a poor person? I hope he has figured out some real investments for his retirement, because Social Security and Medicare are both going broke rapidly.
Here are some “real life” stories to illustrate the point. Recently I got to know a couple of “boomers” graduated from college in 1969. They both became teachers. They decided to be “savers” instead of borrowers, so they decided to live on one salary, and save and invest the other. They purchased a home with some land, so they could live in the “country.” They drove used cars, shopped at thrift stores and traveled using camping to save money. They had a very good life, raised two kids later in life when they could afford them, and were very successful.
They added acreage to the land during the years, bought a small private plane he could fly off the land, and finally, an island camp to fish and hunt from, and raise the kids in the summers. They retired with two Social Security pensions, one Teachers Retirement pension, and over $1.25 million in the “savers” retirement investment account that Mr. Parker tells us are “toxic,” and other assets worth about another $500,000. They were and are solidly “middle class,” but those kinds of assets would make this couple “rich” in Mr. Parker’s view. By the way, he was an economics teacher!
I had a father-in-law who was born in 1905, and lived through the Depression. He was a teacher in the Depression, and those years he spent his summers leasing one acre of land, raising tomatoes to sell at the market. He told me he made more money on that one acre of tomatoes than he made teaching school for a whole year. Did I mention he was also frugal? He retired; and his teacher’s pension, Social Security, and investment income made twice what he ever made teaching.
My father came to this country with the shirt on his back, and I hate to think about how little money in his pocket, worked hard, got married, raised a family of successful children and became “middle class” through hard work (sometimes a job plus running a farm), thrift, and faith in God. No one gave him anything. Thankfully, some had faith in him and lent him money when he needed to invest in farm equipment etc., but it was all repaid, and he saved enough to retire comfortably.
Another couple I know followed the same path as the above stories and retired with well more than $1 million in assets, from living the lifestyle in the first story above. It all comes from living within your means, delaying purchases until you can pay for them, and saving and investing. This couple made a small investment in an individual retirement account, when they were first available and it grew to more than $200,000, between 1980 and 2006.
The real wealth in this country was accumulating quietly at the lower levels of the “savers,” which is why Mr. Obama’s definition of “millionaires and billionaires” starts at $250,000. If Obama got his tax increase on the “rich,” it would amount to about $47 billion a year, against a deficit of $1.3 trillion a year. Think about it this way. If Obama could take all the income of all the people who make more than $250,000, per year, it wont’ cover that $1.3 trillion for just one year!
Class envy and “Obamanomics” won’t save us. They will destroy us very soon if we let them continue. That means all of of us: rich, middle, and poor!
Mr. Jantzi lives in Grottoes.