Monday, June 16, 2008
Savings?
What happened to saving money? Lately it's gotten to be almost a lost cause. I keep hearing that a strong economy needs invested money and the way money gets available for investment is by the people saving money. My understanding, admittedly simple-minded, is that you put money into a bank account, the bank uses that money to make more money and you get a little extra money back. If you want to be a little more risky, you can invest in stocks and bonds and hopefully get more money back under basically the same mechanism.
The main difference is that in a bank, you could count on getting 4-5% back with very little risk. In bonds, you could get 8-10% or in exceptional cases hundreds of percent back, but with a correspondingly higher risk that you could also lose it all.
My experience with stocks has sucked. I was hired into a dotcom several years ago and one of the bennies was stock options. I invested for a few months until I finally realized that the market stock prices were consistently lower than my stock option price - much lower. Eventually, our company, like so many other dotcoms, went bankrupt. And essentially, all stocks become worth zilch, nada, zip. All the peon investors, and we had some young employees, who having bought into the "invest in your company fable" had invested heavily in the company. And ended up with nothing (zilch, nada, zip) - which still pisses me off. And my 401(k) lost a few grand just in the last couple of months. Retirement money that I'll need that I'll never see again.
My bank account isn't doing any better. Lately, every month sees a decrease in interest paid, and of course a corresponding increase in prices paid. Now I'll be lucky to get half of what I've invested into my house. And honestly, if I get half, I'll also be happy about it. The one bright spot is our small cars are now worth a bit more because everyone is getting worried about gas mileage. (On the one hand, while I do get a little bit of a vicious thrill when I watch some Neanderthal drive his oversized super-magnum, hyperhorsed 4X4 past a gas station with $4.29 on its price sign, I would've liked to have the option to get one of them myself as a hobby vehicle.)
Anyway, it seems like nowadays, you can put your money into some savings and watch that savings evaporate or buy stuff today before the price goes up tomorrow. And economists wonder why Americans don't save.
Labels: government, gripes
