Not Their Fault

“THE REALITY IS THAT most working Americans will continue to struggle to achieve retirement security because the ownership of financial assets is highly concentrated among the wealthiest,” wrote Dan Doonan, executive director of the National Institute on Retirement Security, for Forbes.com.

I read and re-read that statement, especially the word “because.” It seems Doonan has concluded that the great wealth held by the top 1% somehow inhibits the rest of us from saving and investing. How can that be true? It can’t be unless there’s a finite pool of assets to be had and only a few have grabbed them.

The fact that many Americans are not saving for retirement, are not financially literate and choose to place short-term wants ahead of long-term goals is indeed a problem. But it isn’t one created by America’s billionaires. In fact, considering the jobs and opportunities created by many of the super-wealthy, I’d argue that the opposite is true.

I played a game of “what if” and looked at where I would be financially if I’d made modest investments in the early days of Microsoft, Apple, Amazon and a few others.  With $100 here and $1,000 there, plus years of stock splits and dividends, I’d be well ensconced in the top 1% and I’d be booking a world cruise (but maybe not this year).

Like most people, I wasn’t savvy enough or a big enough risk-taker to grab those rewards. But the opportunity was there. On the other hand, like tens of millions of other Americans, I did fund my 401(k) and IRA. I bought a few stocks and bonds, and I reinvested my dividends and interest payments.

I did this in small increments over many years and, during all those years, I never gave a thought to how others were accumulating billions—but I did enjoy using my iPhone, getting bargains via Amazon, and maybe someday I’ll help the environment and buy a Tesla.

There are some Americans, perhaps 20% or so, who live pretty much paycheck-to-paycheck and struggle to cover life’s necessities. But for the majority, there’s opportunity to amass wealth. That ability to do so has nothing to do with the level of wealth of any other American.

A year ago, I wrote about ways most of us can save money and accumulate wealth. A little earlier, I wrote about setting priorities for spending the money we have. In both cases, it boils down to the choices we make. For most Americans, there’s simply no excuse for failing to save enough for retirement.

Source: Not Their Fault – HumbleDollar

6 comments

  1. The reality is that most working Americans will continue to buy things that devaluate and struggle to achieve retirement security because the ownership “stuff” instead of financial assets.

    As proof, 40 years ago there were no self-storage centers where I lived. Now there are three within 3 miles of my current house.

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    1. Its a double edged sword. If more people consumed or accumulated less goods and services, what would that do for employment and economic growth?

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  2. The reality is that most working Americans will continue to buy material things that devaluate and fail to achieve retirement security because the ownership of “stuff” instead of financial assets.

    As proof, even 40 years ago, there were no self-storage centers where I live. There are currently three within 3 miles of my current house.

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  3. I pretty much agree that folks, at least at the median wage and above, can accumulate decent wealth over their working lifetime.
    However, life seems to trip up an inordinate amount of people in this country. The divorce rate is high, the out of wedlock birth rate is astounding, substance abuse is common and the list goes on.

    There is also the general ignorance of all things relating to saving and investing. I have known and worked alongside many people who looked at the 401k brochure as if it had been written in an unknown tongue. The miracle of compounding interest and dividends was math beyond their level of understanding.

    I may be a little too pessimistic about the above and I hope my view is skewed. We will see as time goes on.

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    1. “The divorce rate is high, the out of wedlock birth rate is astounding, substance abuse is common and the list goes on.”

      Lock em up!

      “Not only does the U.S. have the highest incarceration rate in the world; every single U.S. state incarcerates more people per capita than virtually any independent democracy on earth. To be sure, states like New York and Massachusetts appear progressive in their incarceration rates compared to states like Louisiana, but compared to the rest of the world, every U.S. state relies too heavily on prisons and jails to respond to crime.”

      https://www.prisonpolicy.org/global/2021.html?gclid=Cj0KCQiAxc6PBhCEARIsAH8Hff2gqD8D6taADMKPUZmu8BuKoFW_U3vkWrORXwtoLQtA9qbFs9l0Bz0aAlqsEALw_wcB

      No, I certainly don’t have the answer, but damn! I love this country, and am so grateful for being born here, but maybe we should step back and rethink a lot of things.

      The chart in this article is mind blowing.

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