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July 04, 2010


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How many people who buy fitness magazines end up following their advice long-term? Same deal. I doubt people think that they *shouldn't* be saving part of the other 96%.

Retired Syd

@OurTake: Well you may have cracked the code . . . I used to buy those fitness magazines all the time too, precisely because I knew what I SHOULD be doing instead of READING about fitness . . .


Syd, a big reason for increased 401(k) participation is a change which allows employers to set up as a default enrollment in their 401(k) plan. Employees can opt out (or change from the default asset allocation, of course) if they choose. This is a sharp change from the previous "opt in" when an employee had to fill out a form or sign up on line in order to enroll.

This passive way of getting people into 401(k) plans has increased 401(k) plan participation.


I read financial advise, not because I don't know what I should be doing - and thankfully am doing - but because I appreciate the reinforcement. so I tend to read personal stories of real people rather than the generic advise. I also tend to read more when I'm moving into a new life phase - having children, buying a home, approaching retirement. At those transition points, I am needing to learn more detail about something that I understood the outline of but not the details.

Retired Syd

@Chris: That's good to know, and encouraging insofar as if I want to write some posts about those things, it's probably not absolutely necessary for me to be funny . . .

You've made me wonder something, though. I wonder what percentage of people reading personal finance information already know the basics and are heading in the right direction already, and how does that compare to the percentage of people that are NOT seeking out this information and are not heading in the right direction.

Is this another case of preaching to the choir?


Please stay funny...

But seriously...I think that you've got it there. We like to read what we agree with..or as you said..what agrees with us!

I think that you might be right that the folks who need the info on financial planning are not the ones who are reading about it. I have been trying to reverse this trend with my adult students .. ha ha ... not luck.

And BTW..you will see the same trend of repetition in advice on dieting, physical fitness, how to look young, how to stop pain, how to style your hair, how to look slim...you know....for the last ---years that I've been reading!!!

Philip Brewer

I think a major cause for the fall in savings since 1980 has been the fall in interest rates.

In 1980 you could get 14% on your money fund. At the same time it was both expensive and difficult to borrow money.

These past few years, though, it's been tough to get 1.5% on your savings, while borrowing money has been cheap and easy (for those few people who still have good credit).

Why save when you get no return? Why not borrow when it's cheap? (You and I know why, but there are enough people who don't.)

Retired Syd

@Phillip: Well at least they had the illusion of earning 14% on their money--inflation was at 13.5% in 1980! I think you are right about the debt though. I'll have to go look and see if the debt burden was steadily increasing over the period that the savings rate was steadily decreasing.

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