Comments on: Why A Negative Savings Rate Isn’t All That Worrisome http://www.peridotcapitalist.com/2007/02/why-negative-savings-rate-isnt-all-that.html Stock market and investing blog published by Chad Brand, Founder/President of Peridot Capital Sat, 11 Feb 2012 23:26:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chad Brand http://www.peridotcapitalist.com/2007/02/why-negative-savings-rate-isnt-all-that.html/comment-page-1#comment-471 Chad Brand Fri, 02 Feb 2007 17:16:00 +0000 http://www.peridotcapitalist.com/?p=370#comment-471 The shift in spending is likely due to historically low interest rates and overall good economic times. So, there is a cyclical component to it, among other things of course.<br /><br />The point is though, if IRA and 401(k) plans aren't factored into the statistics, it's wrong to compare savings rates today with those during the Great Depression. IRA's and 401(k) plans didn't exist in the 1930's, so it's an apples to oranges comparison.<br /><br />If someone has a savings rate of negative 1%, but is putting away 5 or 10 percent of their income in a retirement plan, they are indeed saving. The shift in spending is likely due to historically low interest rates and overall good economic times. So, there is a cyclical component to it, among other things of course.

The point is though, if IRA and 401(k) plans aren’t factored into the statistics, it’s wrong to compare savings rates today with those during the Great Depression. IRA’s and 401(k) plans didn’t exist in the 1930′s, so it’s an apples to oranges comparison.

If someone has a savings rate of negative 1%, but is putting away 5 or 10 percent of their income in a retirement plan, they are indeed saving.

]]> By: barry http://www.peridotcapitalist.com/2007/02/why-negative-savings-rate-isnt-all-that.html/comment-page-1#comment-470 barry Fri, 02 Feb 2007 16:44:00 +0000 http://www.peridotcapitalist.com/?p=370#comment-470 Look at this way: for most of the past century, people spent less than they earned. <br /><br />Today, they are spending more. <br /><br />That change or shift in spending / savings habit is worth noting. <br /><br />Remember too that the vast majority of Americans have little in the way of IRA or 401k investment. <br /><br />So this excess spending is beyond investing, it is consumerism writ large Look at this way: for most of the past century, people spent less than they earned.

Today, they are spending more.

That change or shift in spending / savings habit is worth noting.

Remember too that the vast majority of Americans have little in the way of IRA or 401k investment.

So this excess spending is beyond investing, it is consumerism writ large

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