There is a common trait amongst championship athletes and other out-performers. Published sociologists surveying those who reach the top of their field consistently report a strong ability to "defer gratification." Check out this video of a cohort study where children's ability to defer gratification was examined and thereafter compared to future performance.
The notion that one must sacrifice something in the present to improve their future can be difficult to comprehend; but is a central pillar of our culture. I envision saving, by any combination of spending less and earning more, as the financial version of delayed gratification.
Our economy was constructed with the goal of optimizing growth. People may debate it's implementation but the American experiment of free-market capitalism values growth over any other metric. The finite nature of our resources and the holy grail of growth combine to guarantee indefinite scarcity. As any Econ 101 student can explain, the price of a good is a function of it's supply and demand; as long as we can count on scarcity of resources and growth we can count on the future being more expensive than the present.
In order to afford our future we may need to set aside capital in the present so that we can use it in the future. That is why I save.
1 comment:
Hey, JJ from wowies, tried you at your old email, did you leave whocanisue?
Anyways, what's been up? Saving is fine, but if the dollar declines, which it really hasn't been (I would have lost that bet) then so do your savings. Bailouts are bubbles, too. They're still looking for the cause of that 962 intraday drop. Isn't that evidence of a stock market bubble? In that case ... commodities! Later, JJ.
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