Dec 5, 2023·edited Dec 5, 2023Liked by Philip O'Reilly
The thrift admonitions are very important, especially never taking on unsecured debt.
Alas, the single most important aspect of becoming financially secure is not thrift. It is having a high enough income to make saving worthwhile (the "Get a better job ... " process rectangle).
One can net an additional $20,000 annually more readily than one can save $20,000/year from, say, a $50,000 income. Like living within one's means, targeting and achieving a particular income involves hard choices, may require deferral of gratification, requires a relentless realism.
The odd janitor who lives alone and saves every penny may die a millionaire, but in general, income is the foundation underpinning saving. There are certainly people who have high incomes who don't save effectively. However, with a very low income, there is not enough to compound investments. Magnitude of saving is more important than percentage. (Starting as early as possible with whatever is available is of course also important, to reap the benefit of compounding.)
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I agree that fiscal education should be taught. I do lean toward a conspiracy-type suspicion that such knowledge is intentionally withheld, given how micromanaged curriculum is. Also, teachers and admin are government employees. They teach people how to be government employees. The few teachers who have had other careers tend to have very different attitudes than those who obtained education degrees.
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(Personally, I wish for the author that Substack becomes a viable income stream! There is always piracy as a fallback.)
Thanks for the comment, Alice. I agree that deferral of gratification is essential. The role of desire also plays a part. As Chesterton said, "There are two ways to get enough. One is to continue to accumulate more and more. The other is to desire less.”
The thrift admonitions are very important, especially never taking on unsecured debt.
Alas, the single most important aspect of becoming financially secure is not thrift. It is having a high enough income to make saving worthwhile (the "Get a better job ... " process rectangle).
One can net an additional $20,000 annually more readily than one can save $20,000/year from, say, a $50,000 income. Like living within one's means, targeting and achieving a particular income involves hard choices, may require deferral of gratification, requires a relentless realism.
The odd janitor who lives alone and saves every penny may die a millionaire, but in general, income is the foundation underpinning saving. There are certainly people who have high incomes who don't save effectively. However, with a very low income, there is not enough to compound investments. Magnitude of saving is more important than percentage. (Starting as early as possible with whatever is available is of course also important, to reap the benefit of compounding.)
---
I agree that fiscal education should be taught. I do lean toward a conspiracy-type suspicion that such knowledge is intentionally withheld, given how micromanaged curriculum is. Also, teachers and admin are government employees. They teach people how to be government employees. The few teachers who have had other careers tend to have very different attitudes than those who obtained education degrees.
---
(Personally, I wish for the author that Substack becomes a viable income stream! There is always piracy as a fallback.)
Thanks for the comment, Alice. I agree that deferral of gratification is essential. The role of desire also plays a part. As Chesterton said, "There are two ways to get enough. One is to continue to accumulate more and more. The other is to desire less.”