Saving and Investing Money has Changed

The American Dream....house with white picket fence, car, kids and a dog. Well nowadays our pursuit of this dream has turned into a nightmare but not just for the individuals but the entire system as a whole. More specifically the result of this is a paradigm shift in how to save and invest money. The conventional methods have changed and frankly do not work anymore. Lets examine 401k plans. Your job and the 401k plan was a sure investment into your retirement just 10 years ago but now its a disaster! You are losing money if you have a 401k ...just check your statements. Next up is the old reliable savings account. The savings account was promoted and sold like bread. Now if you look at the current rate of interest of a savings account it is 1%. If you maintain a daily balance of $3,000 for a year you will accrue $30! This is not an investment in savings. Some banks are paying out less than that with additional fees. Yes its bad but gets worst. Next up is the housing market. This was the most dependable investment of all time and was sold and promoted throughout the history of this country. To invest in a house now is the equivalent of buying a car that loses its value as soon as you drive off the lot. This has changed the way of life in America for many. People have lost and are loing their homes at an alarming rate as a result. The people who were successfully paying their mortgage still lost the value in their home and could not refinance on it. Now imagine the people who owned rental property that lost value and went into foreclosure. At this point the renters have now discovered that their landlord is in foreclosure and has no incentive to pay you if you are not even paying your own mortgage. You are now forced to cut and accept your losses and walk away because it is impossible to recover from it.

So as you can see the Savings and Investment model has changed as a result of the overall economy or the lack thereof. This could have all been avoided. This was a result of greed as well as a host of other nefariousness and deeds of ill repute. People have to re-create ways of investing and saving money which I will illustrate in an upcoming blog.