Elderly people have always controlled an inordinate amount of the nation’s wealth; but the extent to which they are doing so at this time is ridiculous! Nevertheless, these people had nothing to do with the policies that caused this maldistribution of money. All they have done is to follow the admonitions of common sense personal money management, which I will outline below. These admonitions have been available to Americans for decades; and there is nothing new or innovative about them. Here is the clue to having more money as time goes on:
1) Start early to save as much money as you can. Utilize individual retirement accounts (IRA’s) or 401(k) plans as recommended by a reliable financial manager. https://investor.vanguard.com/what-we-offer/iras/benefits-of-an-ira?WT.srch=1 Someone has said that the greatest miracle in the world is compound interest. For instance, $1000 invested at age 20 at 4% interest compounded monthly will amount to $156,978.54 at age 65!
2) Arrange to have automatic payroll deductions made from your paycheck. After you get accustomed to these regular deductions and accommodate your standard of living to your resultant money income, you will never miss the deducted money.
3) Carry no credit card balances; pay off your credit card completely every month. Credit card interest is very high—often about 18%/year. Remember, interest should be to collect, not to pay.
4) Live as if you are poor. Do not indulge yourself in luxury items, e.g., extra houses, boats, expensive vacations. You do not need them.
5) Stay away from the mall. There are too many temptations there. And…do not ever respond to e-mail solicitations to buy anything you have not requested. You do not need them if you have not asked for them.
6) Borrow only for a house, an education, or for a modest business investment. If you are borrowing money for an education, be sure that the resultant education can be applied to making a reasonably sure income. Borrowing money to study anthropology, music, history, or Bible studies, will never result in enough income to justify the investment needed. Never borrow to buy a car—if you cannot pay cash for a car, you do not need that car. Buy a house rather than rent, and do not finance it for more than 15 years. Pay off that mortgage soon, as a priority.
7) Take a course in retirement planning at the local community college.
8) Start saving money for your children’s education very early in their lives. Be careful about locking money into plans that will not allow flexibility in subsequent use. It is very worthwhile to maintain absolute flexibility in all money you save.
9) When your children go to college, be sure that they declare a major by the end of their first year in school; and do not let them change after that. Changing majors will waste valuable investment in college classes. Do not let your children vibrate around taking college classes for fun. Be sure they mean business in school. In addition, do not finance a student who is making less than a 3.0 grade point average or who is taking less than 15 credit hours per term. Do not let them waste time in college. Explore educational opportunities for your children that are less expensive than state universities, e.g., online learning or community colleges.
10) Avail yourself of the services of a reliable and reputable financial counselor early in your life. Do not go to a counselor who sells securities or insurance. Pay him up front for his advice, but do not buy anything from him. Make that clear before you do business with any counselor.
11) Do not buy nursing home insurance. Insurance plans for that potential need will tie up your money so that it cannot be used for anything else in emergencies. If you happen to be one of the lucky persons who never need nursing home services, all the money you have saved will go to the insurance company.
I believe that if the government would taper off the printing of money to pump into the pockets of the wealthy through Federal Reserve Bank bond purchases and let up on regulations to businesses, then the poorer parts of our population would be able to catch up to the gains being made by the rich among us.