Saturday, October 6, 2012, AM | Leave Comment
According to Federal Reserve, Average Americans saved nearly 5 percent of their take home pay in the spring of 2012. That brings the total amount saved to $6.9 trillion.
That’s a huge number even on American standard. The Feds inform us that it is the highest level recorded since the Federal Reserve started (in 1945) its regular reports on the flow of money in the national economy.
Some experts tell us it’s not good for the economy because we are told over two-third of the U.S. economy is dependent on consumers’ spending.
The input in the national economy from average Americans has gone way below the norm (whatever that is.)
These folks have shunned the stock market and other investment venues. They want to be safe financially. They can’t seem to bear the risk of the still volatile market.
In essence, they don’t want to lose their hard-earned money in the stock market.
Rich American is getting richer and Average American is playing safe…
Average Americans are playing it safe now but they are not known for their consistent behavior. They are unpredictable, at the very least. Today they are saving, tomorrow who knows they might open up their wallets again and go on a needless shopping spree.
The rich is the most predictable of the human species. They are rich today, and we all know they would be richer tomorrow, barring the heavy use of drugs, alcohol, gambling, the tight grip of IRS, etc.
Why Average Americans don’t like risks…
The most recent stock market meltdown and their homes with underwater mortgages are two of the most devastating debacles in Average Americans personal financial life.
They don’t seem to care about the seemingly rebound in the stock market.
However, in spite of their wariness in stock market and increasing savings to record levels, nearly half of Americans still do not have enough savings to cover three months of expenses in case they lose their main source of income, according to a recent Bankrate.com study.
Some cautious Americans have turned to investing in bonds but have stayed away from the stock market or even buying a home.
The market is open to the Rich…
It seems investing in the stock market has been recently open to the rich Americans only. They can take risks and they surely can absorb risks.
But the rich is smart. I guess that’s why they are rich. When they take risk, they don’t take it blindly. Only a fool would take risk blindly. The rich takes what is known as calculated risk.
Calculated risks are where chances are taken after careful estimation of the probable outcomes. So the rich profit quite heavily when they gain. But their losses are minimal if they ever lose.
What Average Americans can do…
You don’t have to jump in the market with all the money you have saved. You have online research ways available. Take advantage of it. Research carefully how you can start investing.
More than anything, once you do research and start investing, the market just by its nature can go up and can come down. So don’t panic. Stick with your strategy.
If you don’t want to dive in the market on your own, then find a good financial adviser.
In a Nutshell
If Average Americans do not invest, then how else are they going to grow their money. Granted inflation is at a very low level, but so is the measly interest you get from savings and money market accounts.