Saving
Money Will Keep You Broke
Victoria BC
– The
tax rebate checks under the Bush administration’s economic
stimulus plan won’t
do any good if people simply put them in the bank.
Last
week, an article in the Wall Street Journal online claimed we need
to save more
money – even if the interest on the savings won't keep up
with inflation.
This same article
also restated the
obvious: “we
live in a culture fueled by
spending and credit.”
This
is double talk and misses the whole point of why America
is headed for
recession.
Wealth is created
with
credit.
The government
knows it, the
banks know it, corporations know it and the wealthy know it. With
credit there is access to money to spend
which increases corporate earnings, which increases tax revenue and
both of
which provide jobs and therefore more income for workers to spend which
continues this profitable cycle.
When
you remove the access to credit, spending decreases, which means
earnings drop,
which means jobs disappear, which means people stop spending and the
problem
gets worse and worse.
This downward
spiral is the recession the government is trying to thwart with the
stimulus
checks.
If
you, and everyone else, takes their $600 family rebate check and sticks
it in
the bank, then know one is buying the products and services you, or
your
company, sells to earn the money to pay you your salary.
When
you lose your monthly income and can’t
pay your bills that’s when you end up losing your home and
your security.
Because
if you, and everyone else, stops spending then there won’t be
much left of Corporate
America. People
in other cultures have learned to do what North Americans seem to be
‘too
afraid’ to do; that is, find ways to earn a living besides
going to work for
someone to get a paycheck. Just look at the growth of
micro-lending
companies in India,
as people start businesses on even less than what the average American
is
getting in his “stimulus check”.
If we don’t wake up and learn how to earn an income that pays
for
the freedoms and luxuries that we’ve bought on credit, then
being broke will be
the least of our worries – it will be our freedoms
we’re losing as emerging,
strong foreign companies and banks move in to take over struggling
American
ones.
Saving
money is what people do who are afraid of losing – not when
they expect to
win.
It comes
from a fear of loss and the scarcity mentality that keeps people from
stepping
out and finding ways to earn the income the need to live the way they
want to
live.
Here in North
America,
we are able
to start and run a business of just about any kind using
credit. We can
even use that credit money to invest in a variety of wealth building
ventures
that others have started – both of which create more income
which enables more
spending.
If
you had planned to invest your stimulus check in a growth mutual fund
or stock
your investment returns would give you
about 7% as
suggested in the Wall Street Journal article.
On a $600
stimulus check that works out to only $3.50 a month.
However, without spending, those returns would drop because
the
companies wouldn’t be earning the returns they had in a
strong and growing
economy.
For $600
you could buy a bolt of cloth and make dish towels and
your profit would be much more than $3.50 a month. Make
cookies, make
anything and sell it! Alternately, if you don’t know how to
sell what you’d
make, then take a course to develop your financial and entrepreneurial
skills.
The record
low savings rate reported in the US
is not going
to change until we
learn how to earn money to pay for the high standard of living that is
currently enjoyed here and to use credit to help make it happen.
Please
spend the money from your stimulus check and while you’re
doing it, make sure you start learning how you can earn this, and more,
money
on an ongoing basis.
For more information
Contact
Catherine Novak, Marketing & PR Coordinator
marketing@moneyminding.com
250-592-0457 or toll free
877-764-6444
To request a copy of her
book, The 12
Simple Steps of
MoneyMinding
or to book an interview withTracy Piercy,
call 250-592-0457