Saving, Investing, and Personal Finance – Why Provide for Yourself When Others Can Provide for You?
Sadly, we keep hearing of increasing numbers of able-bodied people who are expecting others to provide for them. Some make demands as though there is an infinite amount of money the government can redistribute from others to them, or to their favorite causes. People who are saving and investing can get hit two ways, first they have less available due to higher taxation, and second, savers risk saving for a lifetime only to have large chunks of it taken away by erosion as yields are kept low for the borrowers. A lot of redistribution is taking from those who worked hard, scrimped and saved, to give to those who didn't bother, in the name of fairness. Is financial planning, saving, and investing, a fool's errand?
Some are truly unable to support themselves through no fault of their own. No matter how well we prepare, some large unexpected event may cause us to need temporary assistance, or even cause us to have to start over. Most of us are glad to help those in true need.
But, some appear quite comfortable living off of others. Some appear happy living paycheck to paycheck then expect others who saved to bail them out when a crisis hits. Some even have the government force others help pay for their entertainment. For example, in my small town of around 6,000 people, the city purchased two golf courses. Both golf courses have lost money for many years, annually in amounts that are greater than the combined total of several other city departments. We don't get free golf, but we do get to subsidize those who do play. This redistribution happens at all levels of government with handouts to individuals, corporations, or public entities. Many people think they are entitled to what others have produced.
Redistribution reduces what you have left to be able to direct your own money in the way you think is appropriate. It is obvious some people are getting by using the efforts of others, so why should anyone scrimp and save? Why not enjoy all you have now, and depend on the various safety nets to take care of things later?
True, the more the incentives are to sit back and take rather than produce, the more people will tend to do exactly that. Most of us have had the experience of working hard alongside someone who is hardly working. If the benefits go to the slacker, rather than the producer, we all know what happens to that company. Actual production tends decrease making the company less valuable in reality and as an investment. At a country level, this is one way bread lines can form. It may not be a lack of resources, but a case of too many waiting on someone else to produce.
There is a moral issue, if someone cannot personally take something from another, how is it acceptable for someone to get the government to take it from another for them? If you are able-bodied, and work is available, would you be comfortable taking from others, making life harder on those who are trying to save?
Safety nets put you at the mercy of others. Do you want to be in the continual position of having to convince politicians to give you what you need? At some point, producers may become fed up with paying for those who could be productive to sit idle. The debt load may become so high government will be forced to cut back. Safety nets we take for granted now might supply reduced benefits or go away entirely in the future.
Do you want your fate to be dependent on others, or, would you prefer to try to provide yourself with increasing amounts of freedom and flexibility?
You could decide you want to make the sometimes significant sacrifices to learn how provide for yourself. You could phase out wants, leaving needs and then use the difference in expenses to focus on building savings. Taking personal responsibility and using the tools of financial planning, saving, and investing leads directly to more freedom, and more control over your own life. It all starts with understanding your fate is up to you.
No matter what you personally do economically, as long as it remains popular to redistribute other people's earnings, there will always be the risk someone will take more of your income or erode your hard-earned savings to support someone else. If you believe you should keep more of what you earn, say so, loudly, and often. Help those who truly need it. Make it unpopular to be a slacker again.
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