Sunday, June 15, 2008

They seldom live well who think they shall live long

Saving for your old age was once a common thing but the development of pensions contributed to by employers eased the need for this. People scrimped and scraped and went without for fear of a penurious old age. This meant going without many of the pleasures of the moment in order to put something by for the future.

Whilst thrift can be a praiseworthy virtue the warning here is that it can lead to meanness and extremes of self denial that make life less enjoyable. Many people in the western economies who had the habit of saving into a bank account, as their forefathers had encouraged them, lost out heavily in the 1970's when governments allowed monetary expansion to cause runaway inflation. Old fashioned values were turned upside down as those who had saved saw their money's value drop and those who had borrowed saw the amount of their debt decline as they paid it off with inflated currency.

Although saving is sensible it pays to be wary where you keep your savings in order to maintain their value. Traditionally gold has been a good, long term store of value but it pays no dividend.

You can, of course, opt for the "short life but a merry one" philosophy and, who knows, the government might bail you out at the finish especially if all the good times boosts your longevity. You might end up being subsidised by the poor, hardworking, hard-saving souls who die young with the effort. Such is life!

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