© 2007 Michael Swickard, Ph.D.
Another year has gone by – rather, sped by. Years ago I wondered what the world would be like in 1984 with the Orwellian predicted government control. And in the 1970s I pondered the year 2001 with our intended space exploration. Now we look back and marvel at how far off we were with our predictions. I will not predict what next year will bring.
I grew up at a time in the 1950s when the rage was labor-saving devices that would give Americans more leisure time. But the notion that Americans would have more and more free time went out the window because the overt and covert taxes of our land reached nearly 50 percent of what each of us creates financially. It used to be that one person worked financially and the other worked in the home. Now both people must work, one to put the bread on the table and the other to pay the taxes.
There was a poll asking, are you better off this year from last? We assume that each year we will get better and better and better. Is that possible? Are we always going to get richer as a nation or can we see a time when as a nation we do things that discontinue wealth building?
I am optimistic about next year, though. Overall, our nation had a great year. We have generally been very prosperous and have not been attacked by terrorists. Despite the impression some news outlets have given for political reasons, we have had a very robust economy.
The only thing that I have really struggled with is that the news media makes every pronouncement of presidential political candidates seem like the Hindenberg crashing into the Titanic. Polls have gone up. Wow. Polls have stayed the same. Wow. Polls have gone down. Wow. Seems we Americans should not spend four years, day by day, on all the people running for president. But that is just my opinion.
When I was in the news business we had a saying: “Same news, different day, different people.” This last year there were fires and floods, hurricanes and earthquakes. Same as other years, just happened to different people. Some were advised not to build houses in low areas subject to flood. They did so anyway. Then they had the doggone gall to look surprised.
Good financial advice
Newspapers cover people with variable-rate home loans that the government is trying to bail out. I thought for about five nanoseconds about signing up for a variable-rate loan. Conventional wisdom said doing so would ruin me, so I did not. Those people who went for the variable-rate loans did so against good financial advice. How much should you feel sorry for people who act against good advice?
It is one of the hallmarks of this year that we told them it would end in disaster and then, when it did, we do not mention the advice and are instead attempting to bail them out. I am not heartless, but how about a little applause for those people who were smart enough to not have those kinds of loans?
This last year, as every year, we observed that some people perished, some people were born. Some got married, some divorced, some became more wealthy and some went further in debt. Some people got offers for “instant credit,” which is actually instant debt. Some of those people with instant debt used and used and used the debt instrument and are in trouble.
We tell young people that three things are important to secure financial freedom. Finish high school. Do not have a child before age 21. Be married when you have that child. Great advice not taken by many. A little applause for those who do take the advice.
In the land of the free no one has to take good advice, least of all me. I have ignored lots of good advice. But I at least have the common sense to recognize mistakes that I make and endeavor to not make them again. And, when I have “stupid” written on my forehead, I realize I have a problem, not that someone did something to me.
The key to wealth
The hardest thing for me to stand is that our society is not honest about wealth. I was chided by a letter to the editor about a previous column where I lauded hard, smart and sustaining work as leading to wealth. The writer said it was not true. But it is true.
We should bombard our children with the key to becoming wealthy: Spend less than you make every month. No exceptions. Work hard, work smart, work better each day. That will lead you to wealth. It is about taking the time to do the right things. Do the right things long enough and good things will happen.
Next year let us become much better at building our long-term wealth by doing the right things in the right ways and at the right time. Do not hide this from our children; the truth will set them free.
Swickard is a weekly columnist for this site. You can reach him at michael@swickard.com.