Saturday, April 05, 2014

Why save?

TeaAtTrianon links to an article complaining (again) that Americans don't save enough.

I remember reading similar things in the 1980's that lauded the high savings rate by the Japanese, who promptly lost their savings in a housing bubble.

I tend to save, but not a lot: Why?

Because when I went to Africa, I left enough money to live for a year in the bank.

Thanks to Jimmy Carter and a 17percent inflation rate, my money was worth half of that when I returned home five years later. Despite high interest rates, my savings had been "stolen" by inflation.

Same thing now. So if you save, you lose the money to inflation (and get taxed on your high 1 percent interest income).

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