Why people retire poor

Posted on June 13, 2009
Filed Under Money | Leave a Comment

the gap between the rich and the poor cartoon It is unbelievable the number of things people do to guarantee that they will retire poor. Every day that goes by I come across a new example of poor money management by people educated and not. Let me give you a recent example that took place in Australia.

A few months ago, the Australian government announced that as part of a very expensive stimulus package, i.e., the government spending money they don’t have in an effort to kick start a hurting economy because of the recent debt crisis that has crippled economies around the world, they will give every tax payer a nice $900 paycheck to spend as they wish.

So what do you think a reasonable person should do with this money?

Those in debt should rationally use the money to pay down their debt whether it is credit card or mortrage. It makes sense to do this because the less money you own the less you have to pay in interest over the years to the bank. Well, do you think people actually did this?

Actually, it turns out that most people took the money and wasted on luxury items they didn’t really need. They went out and bought iPods, iPhones, plasma televisions, etc. These are all items that we don’t really need especially when in debt and unemployed. What the heck are people thinking I will never understand. It is this type of behavior that makes our economy susceptible to fraud by the elite bankers and their politician and mafia friends.

And so there you have it. Another example of how people seem to go out of their way to mismanage their money and retire poor.

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