Press On — A silver lining to the recession?
I normally despise popup ads on Web sites that I visit, but over the last several weeks I kind of enjoyed one that said, “So long 2009. Don”t let the door hit you on the way out.” I would imagine many people felt that way about 2009. It was a bad year for lots of Americans. Personally, I was happy to see it end. At the start of a year I always feel renewed and, once again filled with a sense of optimism for the future.
As bad as 2009 was, the horrible economy did spur some positive actions. One in particular was actually historic. Americans started saving their money at a level that had not been reached since the days when the perfect, but fictitious Cleaver family was on television entertaining us in brand new episodes of “Leave it to Beaver.”
A year ago this month, the U.S. savings rate jumped to 5 percent on the largest savings rate advance since March of 1995. One year earlier, the rate was almost in the red with a microscopic 0.1 percent. That means Americans, on average, were saving just one-tenth of 1 percent of their household income. When a family is scraping to make ends meet every month, it is difficult, if not impossible, for them to think about putting money away for their retirement years. The sad thing that this recession has brought about is lots of folks have abandoned their dream of retirement. Now, I hear more people, even highly paid people who say that they don”t believe they will ever be able to retire.
Since I am more optimistic in January, this year I read the book, “The Millionaire Next Door.” It was published in 1996 and, based on the information in the book, the authors would be proud of me for getting a used copy for just 50 cents. I wish that I had read the book in 1996, though. It would have been worth the $22 suggested retail price printed on the jacket. In fact, I wish the authors could have written it, and that I would have read it in 1971, the year my wife and I were married. Maybe we would have more money saved for our retirement years.
I highly recommend the book for everyone who would like to be able to accumulate more wealth. The book is actually based on a major study of American millionaires and the facts that the authors were able to ascertain about the average American millionaire. Their discoveries were quite interesting and probably not what most people would have guessed them to be.
For one, many people I know believe that most millionaires come from families that have passed their money on for many generations. The reality is quite the opposite of this scenario. More than 80 percent of American millionaires “are ordinary people who have accumulated their wealth in one generation.”
After 20 years of studying millionaires, authors Thomas Stanley and William Danko determined that the average millionaire is a prodigious saver and a frugal spender, which they say makes the complete, offensive and defensive financial player. They save and invest while on offense and spend as little as possible when in defense mode. They mentioned that many millionaires actually live in modest houses and purchase used cars.
In case you don”t get around to reading the book, here are the top two out of the seven factors the authors listed as consistent with millionaires: “They live well below their means. They allocate their time, energy and money efficiently, in ways conducive to building wealth.”
There are few of us who couldn”t help our own cause by improving both our offensive and defensive skills when it comes to our money. I will leave you with the salute from the most famous Vulcan, Mr. Spock, who encouraged people to, “Live long and prosper.”
Gary Dickson is the publisher and editor of the Record-Bee. Contact him at gdickson@record-bee.com or 263-5636, ext. 24.
