Best of the Week
Most Popular
1.UK General Election Exit Polls Forecast Accuracy - Nadeem_Walayat
2.What's Next for the Gold Price? - Axel_Merk
3.UK House Prices Correctly Forecast / Predicted Conservative Election Win 2015 - Nadeem_Walayat
4.15 Hours to Save England from SNP Scottish Nationalist Dictatorship - Election 2015 - Nadeem_Walayat
5.Exit Poll Forecasts Conservative UK Election 2015 Win - Nadeem_Walayat
6.Gold And Silver China’s Pivotal Role: More Questions Than Answers. Not So For Charts - Michael_Noonan
7.Conservative Win 2015 UK General Election, BBC Forecast of 329 Seats - Nadeem_Walayat
8.Investing and the Lollapalooza Effect - Niels C. Jensen
9.Gold Price Target - Rambus_Chartology
10.Gold Price Nearing An Important Pivot Point - GoldSilverWorlds
Last 5 days
Time To Get Real About China - 22nd May 15
Gold Lifeboat to Global Economies “Titanic Problem” Warn HSBC - 22nd May 15
One Investment Could Save Two Generations' Retirements - 22nd May 15
Investing is About Identifying Gifted and Talented Camps - 22nd May 15
One of Europe's Latest Debt Nightmares - 22nd May 15
UK Immigration Crisis Could Prompt BREXIT, Propelling Britain Out of EU Despite German Factor - 22nd May 15
America Superpower 2016 - 21st May 15
Stock Market Secular Versus Cyclical Investing - 21st May 15
Banking Stocks Break Out with Higher Bond Yields - 21st May 15
The Tech Portfolio Built to Beat the Market - 21st May 15
Gold “Less Sexy” Than Bitcoin … For Now - GoldCore on CNBC - 21st May 15
The Russia-West Rivalry in the Balkans - 21st May 15
The US Dollar and the Precious Metals Complex - 21st May 15
Gold GLD ETF Drawdown Continues Unabated - 21st May 15
Who’s Killing the Stock Market? - 21st May 15
Your Best Way to Profit from the Narrowest Market in 20 Years - 21st May 15
Government Regulation and Economic Stagnation - 20th May 15
It’s Time to Hold More Cash and Buy Gold - 20th May 15
Choppy Asian Stock Markets - 20th May 15
Countdown to Global Financial Collapse - 20th May 15
Will Interest Rates Ever Rise? - 20th May 15
How to Cash in on Amazon Stock’s Amazing Cloud Success - 20th May 15
Three Hidden Forces Pushing Crude Oil Price Back Up - 20th May 15
U.S. Housing Market Strong Numbers in Perspective - 20th May 15
Greece Debt Crisis - Obama Has A Big Fat Greek Finger - 20th May 15
Now Is the Time to Own the Oil & Gas Leaders - 20th May 15
UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt - 20th May 15
Trading Gold and Silver along with the Pros - 19th May 15
Gold Ticks Higher as London Housing Market Crash Looms? - 19th May 15
Global Stock Market, Commodities Group Analysis - 19th May 15
How Stock Investors Could Profit from the Dark Net Pattern That Few Others See - 19th May 15
The Patriot Act is now USA Freedom Act - 19th May 15
Investing in Europe? 5 Critical Insights to Boost Your Portfolio Now - 19th May 15
Gold Price Trend Forecast - 19th May 15
Stock Market Continues Defying Gravity, Dow New All Time High - 19th May 15
Are Gold and Interest Rates About To Take Off Higher? - 18th May 15
Nikkei Japanese Stock Index Set To Get Smashed - 18th May 15
Silver Price Projections For 2020 - 18th May 15
The IMF Leaks Greece, Institutions Forcing a Debt Default - 18th May 15
Europe's Stocks Bull Market Continues After Correction - 18th May 15
European Banks Vulnerable Today As 2008 Financial Crisis - 18th May 15
Payments, Currencies, and Broken Money - 18th May 15
Learning to Trade Markets - Dealing with Losing Trades - 18th May 15
Stock Market Sell in May and Go Away - Last Hurrah - Take2 - 18th May 15
The No. 1 Reason Stocks Will Climb Higher - 17th May 15
Gold, Silver Distorted Markets, Financial Sophistry, and Moral Hazard - 17th May 15
Stock Market CAC40 Trend Forecast - 17th May 15
Stock Market Diagonal Pattern Nearly Complete - 16th May 15
Gold And Silver - Elite's Game Of Jenga In Place. Your Move - 16th May 15
You’ll Never See a Better Moment to Invest in China - 16th May 15
Are Gold and Silver Stocks Breaking Out? - 16th May 15
War On Cash - Why the IRS Seized All the Money from a Country Store - 16th May 15
Is China Economy a Fire-Breathing Dragon or a Dragon on Fire? - 16th May 15
Silver Buying Only Starting - 16th May 15
Why Opinion Pollsters Got UK Election 2015 Badly Wrong - 15th May 15
Double Black Diamond - What a Bond Bear Market Looks Like - 15th May 15
This “Bubble” Is Set to Kick Off New Energy Profits - 15th May 15
German Gold Demand "Spikes"- Investment Demand Surges 63% - 15th May 15
How GDP Metrics Distort Our View of the Economy - 15th May 15
McDonald's Future Is Hard to Digest (NYSE: MCD) - 15th May 15
Dry Bulk Shipping Index Chart Analysis Update 2015 - 15th May 15
Economic Expansion Ahead? World Stock Markets Analysis - 15th May 15
Why Not Tell Greece How To Run A Democracy? - 15th May 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Biggest Debt Bomb in History

Are You An Investor Who Suffers From Hyperopia?

InvestorEducation / Learning to Invest Feb 13, 2013 - 08:48 AM GMT

By: Investment_U

InvestorEducation

Alexander Green writes: During the housing boom a few years ago – while home equity values were climbing – American consumers went on a world-class spending spree. The personal savings rate dropped to zero, then went negative. Consumers were actually spending more than they were earning.


But the housing collapse and resulting financial crisis had a sobering effect. Saving is in fashion again. According to the Federal Reserve Bank of St. Louis, the nation’s personal savings rate is currently 6.5%.

Yet two-thirds of Baby Boomers confess that they haven’t saved enough for retirement. A 2010 survey found that 34% of Americans have zero savings, including 22% of those 65 or older.

Blame it on our materialistic world, the American consumer culture or just plain old lack of self-control, but millions have a hard time passing up immediate gratification in order to reach long-term financial goals.

Yet there is one class of savers and investors with an entirely different problem and, in some ways, it is just as unfortunate…

Psychologists call it hyperopia.

That’s a fancy of way of describing people who are so far-sighted they can’t enjoy their money. They are good at looking ahead and saving for the future, but they can’t enjoy what they’ve earned.

The Depression Mentality
Years ago, when my older brother was playing the mini-tour in Florida, he had a local businessman and sponsor – “Joe” – in Virginia who wanted to come down and watch him play.

“Great, I’ll book you a room at the Hilton nearby,” my brother offered.

“The Hilton?” Joe said. “Forget that. I’ll book myself a room at the Motel 6.”

Now there’s nothing wrong with staying at a Motel 6, especially if that’s all you can afford. (Growing up, I never stayed in anything better.) But Joe was independently wealthy. He owned a string of McDonald’s franchises.

However, he grew up in the Depression. He had the kind of keen understanding of “scarcity” that eludes most people today. And, like many businesspeople, he owed his success, in part, to keeping a sharp eye on costs.

Still, he was getting on in years. (In fact, he died less than three years later.) He never spent much of the fortune he earned. Ironically, he could let his heirs blow through it. But he couldn’t bring himself to spend it himself.

Author Matthew Kelly writes that he, too, came from meager circumstances and – even after he was a bestselling author and an in-demand lecturer – he couldn’t make himself part with much of what he was making.

If someone you know has hyperopia, you might suggest they do what Matthew Kelly did…

Planning How Much to Spend
Just as most folks need to plan and make a habit of saving, some need to plan and make a habit of spending. Kelly figured out how much of his after-tax income he could drop with a clear conscience and then set goals to make sure he did it.

It’s a minority to be sure, but some folks – practical ones who work hard, save and invest – may need to pre-commit to indulgence. That could mean choosing a gift certificate over cash back when redeeming credit card reward points. Or perhaps reframing money spent as an investment in restoring yourself for work.

In my experience, workers generally fall into one of two categories: those who have to be goaded to work and those who have to be reminded to stop. The same is true of savers. The majority are clearly not saving enough (or leaving it untouched long enough). But some of the others aren’t enjoying the fruits of their labors.

It can be a great balancing act, deciding what to save, what to spend and what to give away. But the oldest adages are entirely true. You only live once. You can’t take it with you. Hearses don’t have luggage racks – and shrouds don’t have pockets.

So earn it. Save it. And pass it along. We’re only here for a visit.

Good Investing,

Alex

Source : http://www.investmentu.com/2013/February/are-you-an-investor-who-suffers-from-hyperopia.html

by Alexander Green , Oxford Club Investment Director Chairman, Investment

http://www.investmentu.com

Copyright © 1999 - 2013 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History