Will This Story Ever End

Having spent twenty year in finance studying the art of effective money management I can’t tell you how far off the beaten path we have gone as a society when it comes to effective money management. Let me explain, back in the day, after the Great Depression, we became a nation of savers. Naturally after going through such a tough time financially, we as a society were so traumatized, we were frugal with our spending. Consequently we ended up with one of the wealthiest nations on Earth. The reason for that is because everyone saved their money and put it to work earning interest. We had very little debt because was very little credit, short of your typical home loans.

But then something happened in the 1970’s to change all of that. It was the birth of the credit card. Sure there was department store cards back then but nothing like today. Suddenly we realized that we could have everything we wanted today and we didn’t have to pay for it until later, waaaaay later. The problem is, instead of taking the money that we used to save, to earn interest, we are using that same money to pay interest on the money we borrowed to buy our stuff.