You could argue that this problem is caused by not learning from the past.
Both the failures of the 1870s and 1930s were caused by similar elements. The simple truth is you have to really live below your means in order to build wealth. You can't gamble on a 'sure thing' such as your house always increasing in value or the stock market going up.
I had two great aunts, both of whom had jobs that were not well paying. Both left sizeable sums to my grandmother. They knew what it meant to live below their means. They made sure they had enough money to take care of their current needs and they saved for their future needs. I had a talk with grandma the other day about the economy and I pointed to her two sweet sisters who have passed away, and then I pointed out that my mother's generation had not saved as well, they had overspent and so to had my generation. That's the problem, we began to think we were entitled to things we should not have. We gambled, and as we are seeing right now those that have have lost.
In 1929 the Dow Jones lost 89% of its value losing gains for 36 years. It did rebuild after the collapse though it took 22 years to regain that.
Both the failures of the 1870s and 1930s were caused by similar elements. The simple truth is you have to really live below your means in order to build wealth. You can't gamble on a 'sure thing' such as your house always increasing in value or the stock market going up.
I had two great aunts, both of whom had jobs that were not well paying. Both left sizeable sums to my grandmother. They knew what it meant to live below their means. They made sure they had enough money to take care of their current needs and they saved for their future needs. I had a talk with grandma the other day about the economy and I pointed to her two sweet sisters who have passed away, and then I pointed out that my mother's generation had not saved as well, they had overspent and so to had my generation. That's the problem, we began to think we were entitled to things we should not have. We gambled, and as we are seeing right now those that have have lost.
In 1929 the Dow Jones lost 89% of its value losing gains for 36 years. It did rebuild after the collapse though it took 22 years to regain that.
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