Featured Posts

lnvestment Lessons from Warren Buffett Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays. -- Warren Buffett While Warren Buffett... Read more

Six Things to Know Before You Start a Fashion Business The fashion industry may seem quite overwhelming to someone trying to get their name out there and open a business. Prior to laying out the plans for said business, the owner should step back and take a look at the broader picture. There are six important things... Read more

Is Tesla Still a Worthy Investment? "Is Tesla still a worthy investment?," asked a friend of mine who read my article which I wrote back in June of last year. A lot has happened since then. Tesla stock has doubled in price and Elon's presence in the media is omnipresent. This guy is one of... Read more

Year 2013: My Favorite Personal Finance Articles It is hard to believe but, indeed, year 2013 is in the box. For stock investors, it was a banner year. Nasdaq finally climbed back to its old highs and other indices performed brilliantly as well. While pundits on the Street may have tried their best to... Read more

That Mutual Fund is Robbing Your Retirement "I don't take risk, so I invest in a mutual fund," said a friend with a smirk. He is not alone. I have known many friends who take pride in handing their hard-earned money to the Wall Street gang. If you are one of the proud mutual fund investors, I am about... Read more

How to Make Money Online Internet has definitely transformed our world. From a street smart's perspective, Internet has ushered a new era of knowledge that was confined in the walls of libraries around the world. It has also made harder for biased journalism to twist facts and control... Read more

How to Invest Money in Any Market [caption id="attachment_4819" align="alignleft" width="640"] photo by: Grant Wickes[/caption] Let's face it, not all investments are made equal. How to invest money is  as much or more important than how to earn and save money. I have known many friends who... Read more

Mr. Money Mustache and Jim Collins: An Interview [caption id="attachment_4746" align="alignleft" width="640"] ....photo by: timmycrockery[/caption] Mr. Money Mustache is the Babe Ruth of the early retirement zealots on the blogosphere. His fiery style with a touch of badassity has inspired thousands around... Read more

Tesla Cars: Why Investing in it May Make You Rich The investor of today does not profit from yesterday's growth. -- Warren Buffett If you are wondering, the title indeed  is dubious. And that's by design. I am not suggesting that buying a Tesla car may make you rich. At the hefty price tag, it can certainly... Read more

Is Apple not Paying its Fair Share of Corporate Taxes? Apple has been in the limelight again, but this time Steve Jobs is not around to vindicate it from tax avoidance allegations: It is accused of not paying its fair share of corporate taxes. Uncle Sam wants sweeter Apple as he is hungry. Common sense is uncommon... Read more

Life's Like a Football Game The biggest diverse, invasive or pervasive culture that human kinds knows is football and I love the fact that at the altar of football human kind can come worship and celebrate. -- Former Newcastle player Andy Harper Football is an amazing game. The thrill... Read more

Don't Die Like an Idiot: Create a Living Trust I confess that the title of this post is bit denigrating, but you will like it once you read this article in New York Times. We avoid thinking about our death and our taxes -- both are inevitable! Roman Blum, a holocaust survivor, left $40,000,000 estate... Read more

Get Free Articles!

Proud Member of Yakezie

The Fetish of Consumerism

Category : Personal Finance, Retirement, Smart Investment Ideas

It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either. — Mark Twain

The assault on saving,  by our media,  is a common phenomenon. The same media — with fetish of consumerism — takes every chance to launch an assault on the victims! It’s an amazing world we live in now.

The proverbial wisdom has taught us virtues of savings, and warned against the consequences of mindless squandering and waste. But today the timeless, ancient virtue of thrift is once more under attack — with the fake notion that only spenders can save our economy — while doctrine of spending is in fashion.

The fallacy of argument against saving stems from the assumption that savers are merely cash hoarders. The fetish of consumerism thrives on a central theme that often repeats in various forms in the media: In bad economy, savings is a sin and dissaving is a virtue.

Higher savings would normally be good for the economy. But not now, when capital is needed to invest in growth and jobs. The One Percenters put 56 percent of their available cash into savings accounts and money markets in 2012 – that’s up from 24 percent in 2007.– Robert Frank, CNBC

A great way to rally nation’s squanderers is to blame savers for their plight. Waah! The word “normally” struck my eyes. The mere insinuation that a saver has to become a spender when economy is in  tailspin is baseless because author doesn’t understand the fact that saving is another form of spending in capital goods.  The only difference between spender and saver is that spender wastes capital on consumer goods while saver invests his capital not only to build new businesses but also to create better-paying and more productive jobs. Even if the One percenters put 56 percent of their cash into savings account(even though I doubt that statistics), banks will swiftly lend that money to an entrepreneur who needs capital to offer consumer goods at a cheaper price since he can borrow money at a lower interest rates(law of supply and demand).

Let’s dissect fallacy as its rampant attack on savers intensifies…

In other words, One Percenters used to save less, and invest more. Now they’re “basically stuffing money under the mattress,” said Jim Taylor, vice chairman of Harrison Group. That also means they’re spending less – on everything from traditional luxury to second homes. Fully 82 percent said they would spend more if they had more confidence in the future.

The notion that savings equates to hoarding or stuffing money under the mattress is another fallacy that needs a fact check. During economic downturn consumptive spending and investment decline due to a common fear:  consumers stop spending as they fear that price of goods will fall further due to lower demand. On the same token, investors wait on the sideline simply because they have lost their confidence in the future profitability of the business, and overall stock market in general.

I find it so compelling to seek advice from the smartest investor, Mr. Buffett. According to Mr. Buffett, investing is laying out money now to get more money back in the future. This mere assumption of equating less investment with cash hoarding under the mattress depicts a portentous picture. Indeed, savers are on assault simply because they are in minority. And media loves to cater to a growing class of consumers who love to embrace these fallacies to justify their modern day slavery.

And the attack continues…

The same article suggests that wealthy are scared to reveal their wealth due to a growing hatred by those who have made  poor choices in their lives. In a free society, achievers ought to be role models for new generation. Yet the assault on savers is so intense that they prefer to remain recluse. This will only create a bigger class of consumerism.

Our beloved media needs a gentle reminder that their relentless attack on savers along with their fetish of consumerism may make us, savers, an extinct species. The media should beware because for their beloved consumers, savers will need to save even more to invest in capital goods to satisfy ever growing beast of consumerism.

Related Posts Plugin for WordPress, Blogger...

Comments (8)

Our lust for more has brought financial meltdown in not too distant past, but we don’t learn from history. Well written. Keep up the great work.

Thank you for the kind words.

That would be funny if it weren’t a bit tragic: savers (with money) are selfish and greedy, while spenders are virtuous. Upside-down topsy-turvy world.

Beautiful, 101C! I love your wisdom.


Great topic and article. This reminded me of a cartoon that my son drew recently and here is the verbiage.

Man says (who holds a $10 bill in his hand): “We must increase interest rates for the bank and brokerage accounts”

Woman says (who holds a $10 bill in her hand): OK, we will increase the rates from 0% to 15%

From a picture of Federal Reserve Building: The Fed says “The interest rate must always be at 0.01%. Banks need to succeed, not people”

Wise words, indeed!

Fed has kept the rate low, but we all will pay the price sooner or later.

We do spend, we will continue to spend on the things we need and at times want. But, the call to save and save for the things we need and want should be heard as well.

great article, just in time for “black fridays’ and “cyber mondays” and whatever the media like to invent during the holidays.

i was thinking about this subject today when the priest at my church urged people to “buy gifts for poor families”; i thought to myself, he should have urged people to stop buying gifts and come up with new ways to help poor families.

Post a comment