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Why do some people have no savings?


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I am coming across lots of people that have no money at all, no savings at all, is this true or are people telling fibs.

I have savings because I am saving for a house, but I would have a float of £20k for the just in case scenario.

How can it be in the UK one if the richest countries so many people have no savings.

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It's not just the UK look at the  US where most people tell pollsters they don't have $400 for an emergency.

It's insane.... 

I think it's a product of central banking and a fiat currency where the purchasing power of the currency has reduced so much that the average wage is just about enough to pay the bills but not much else. 

Inflation and central banking are ripping us all off.

 

Edited by Warlord
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Very poor people have never had much in the way of savings. However, with regards to the middle classes, i would say the answer is related to changing attitudes towards debt. For the generation born before the war, debt was something to be feared, or going back to victorian times something to be ashamed of. Conversely , thrift and saving was considered a virtue. 

Since the the 1950s, debt has gradually become more acceptable. It has now reached the stage as being a necessity to keep western standards of living going. So when we had the greatest private debt crisis ever in 2008,the message wasnt pay down your debts and start saving, lets go back to  banks lending a lower multiple of income on property. It was, and had to be in an economy without any other ideas for growth, keep taking out maximum debt and all will be fine. 

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In days gone by, if you fell on hard times and had no savings you could literally end up starving to death.

Today, between benefits and freely available credit cards that wouldn't happen.

So the risks of having no savings are way lower today.

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I can understand the poor having no savings, but the number of people with seemingly good jobs and affluent lifestyles who would be in trouble in short notice is astounding. Stories online of people on six figure incomes complaining that they have already ran out of money as the governments furlough "only" covers £2000pm.

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34 minutes ago, reddog said:

Consumerism?  People get constantly told to buy stuff instead of saving?

A car doesn't cost £20,000. It costs £200 a month forever.

As people move away from buying outright towards leasing savings are apparently less important.

 

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i guess it depends what you mean by savings. Having liquid cash could be seen as a very bad way to save so far as you have to save out of net earnings and cash interest rates are normally below inflation (or have been since 2008). Having gold, fine art, classic cars, bitcoin, property, shares and a diversified savings portfolio may be seen as a better alternative. Me personally i try to keep my cash assets low. I dont trust fiat currency, plus having £35k in gold bullion as opposed to cash does wonders for universal credit applications. So one could max out the pension and take the tax relief then take use VCTs (i believe you claim back the tax here) and if you do need to save net choose something you can negate CGT like Gold or an ISA. The way i see cash is it is an incentive to the government to take it and indeed the government will always look at cash when giving out universal credit.

 

What i'm saying is just because someone doesn't have cash available currently doesn't mean they dont have a saving vehicle or aren't wealthy in other means.

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32 minutes ago, Pebbles said:

What i'm saying is just because someone doesn't have cash available currently doesn't mean they dont have a saving vehicle or aren't wealthy in other means.

In the vast majority of cases i think it does. 

Wouldn't normal savings logic suggest holding, say, 3-6 months worth of cash to live on, then invest surplus cash over and above that in other things? 

DWP expect bullion to be reported on any application under 'other savings' 

Edited by regprentice
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25 minutes ago, regprentice said:

In the vast majority of cases i think it does. 

Wouldn't normal savings logic suggest holding, say, 3-6 months worth of cash to live on, then invest surplus cash over and above that in other things? 

DWP expect bullion to be reported on any application under 'other savings' 

Indeed, savings are not all necessarily all cash, but a combination of short, medium and long term assets.

So, short term 3-6 months Salary in Cash, medium term consider shares etc. and long term a Pension for the tax advantages.

The number of self employed people who were a month away from not paying the rent/mortgage/food is crazy. Particularly the one last week on the BBC news complaining he couldn't make the £600/month payments on his Audi A6.

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2 hours ago, Warlord said:

It's not just the UK look at the  US where most people tell pollsters they don't have $400 for an emergency.

It's insane.... 

I think it's a product of central banking and a fiat currency where the purchasing power of the currency has reduced so much that the average wage is just about enough to pay the bills but not much else. 

Inflation and central banking are ripping us all off.

 

The Chinese have enormous savings. As do the Germans, the Japanese, the South Koreans and the Swiss.

They all have central banks and fiat currencies.

Try again.

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6 minutes ago, zugzwang said:

The Chinese have enormous savings. As do the Germans, the Japanese, the South Koreans and the Swiss.

They all have central banks and fiat currencies.

Try again.

Japan has suffered a 'lost decade' (actually a quarter of a century) thanks to ZIRP and all the printing of money out of thin air.

Dr. Tom Woods and Dr. Robert Murphy explain:

 

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5 minutes ago, Warlord said:

Japan has suffered a 'lost decade' (actually a quarter of a century) thanks to ZIRP and all the printing of money out of thin air.

Dr. Tom Woods and Dr. Robert Murphy explain:

 

Britain has gone all grumpy and old-fshioned. Ireland is all progressive and modernist. The USA boomed in the 1960's. I suspect China is heading for an almighty slowdown. All this makes sense when considering the age of the population and Japan fits nicely into that.

 

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6 minutes ago, Bob8 said:

Britain has gone all grumpy and old-fshioned. Ireland is all progressive and modernist. The USA boomed in the 1960's. I suspect China is heading for an almighty slowdown. All this makes sense when considering the age of the population and Japan fits nicely into that.

 

Central banksters are in a 'race to the bottom' to destroy their currencies. The only question is which one will lose the most value? Gold is trading near high's in GBP and the Euro. 

 

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1 minute ago, Warlord said:

Japan has suffered a 'lost decade' (actually a quarter of a century) thanks to ZIRP and all the printing of money out of thin air.

Dr. Tom Woods and Dr. Robert Murphy explain:

 

I don't need either of these twits to explain Japan to me. Richard Koo did it first and best: a balance sheet recession caused by an enormous private sector asset bubble.

All money is created out of nothing in a monetary economy.

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1 minute ago, zugzwang said:

I don't need either of these twits to explain Japan to me. Richard Koo did it first and best: a balance sheet recession caused by an enormous private sector asset bubble.

All money is created out of nothing in a monetary economy.

They have been running a significant deficit and enormous debt for the last 25 years.  Why are we copying them? It doesn't help the economy.

 

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3 minutes ago, Warlord said:

Central banksters are in a 'race to the bottom' to destroy their currencies. The only question is which one will lose the most value? Gold is trading near high's in GBP and the Euro. 

 

More fantastic nonsense. The amount of money tokens in circulation as credit derivatives in the shadow banking system is orders of magnitude greater than the money supply + reserves available to the banking system proper.

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6 minutes ago, zugzwang said:

More fantastic nonsense. The amount of money tokens in circulation as credit derivatives in the shadow banking system is orders of magnitude greater than the money supply + reserves available to the banking system proper.

I'm afraid your dead wrong. GBP/EUro have lost significant value over the last 20 years in real money i.e Gold and continues to do so. I suggest you protect yourself and re-balance your portfolio

 

Edited by Warlord
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5 minutes ago, Warlord said:

They have been running a significant deficit and enormous debt for the last 25 years.  Why are we copying them? It doesn't help the economy.

 

Of course it helps the economy! Japan would have endured an enormous depression in the 1990s had the BoJ not intervened; millions would have lost their jobs and homes. Japanese society would have been immediately exposed to the vicissitudes of globalisation as a direct consequence, the country's position as the world's No. 1 industrial exporter forfeit.

Also, we're not copying them. The UK's manufacturing capacity has been systematically undermined and hollowed out by forty years of free market capitalism. An unholy trinity of policy objectives - privatisation, globalisation and deregulation - in pursuit of an unempiric mathematised ideology masquerading as science.

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Just now, zugzwang said:

Of course it helps the economy! Japan would have endured an enormous depression in the 1990s had the BoJ not intervened; millions would have lost their jobs and homes. Japanese society would have been immediately exposed to the vicissitudes of globalisation as a direct consequence, the country's position as the world's No. 1 industrial exporter forfeit.

Also, we're not copying them. The UK's manufacturing capacity has been systematically undermined and hollowed out by forty years of free market capitalism. An unholy trinity of policy objectives - privatisation, globalisation and deregulation - in pursuit of an unempiric mathematised ideology masquerading as science.

Oh dear. Perhaps you should study recessions/depressions and how central banks intervention makes them longer and more severe compared to when they don't (like the Depression of 20/21 compared to the 1929 one which lasted 10 years).

You seem to have a blind spot when it comes to central banking and the affects of QE, ZIRP, Debt, Deficits, HTB, etc. Gold as quadrupled over the last 20 years and will do so again. I suggest you take action to protect yourself from this pernicious inflation before it's too late. 

 

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6 minutes ago, Warlord said:

Oh dear. Perhaps you should study recessions/depressions and how central banks intervention makes them longer and more severe compared to when they don't (like the Depression of 20/21 compared to the 1929 one which lasted 10 years).

You seem to have a blind spot when it comes to central banking and the affects of QE, ZIRP, Debt, Deficits, HTB, etc. Gold as quadrupled over the last 20 years and will do so again. I suggest you take action to protect yourself from this pernicious inflation before it's too late. 

 

I don't understand how this is a reply to the quote,  both are correct. The Japanese and indeed everyone else apart form the uk can weaken their currency as they have a manufacturing base. The UK thinks they can play the same game, but with services and imports.

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Just now, frederico said:

I don't understand how this is a reply to the quote,  both are correct. The Japanese and indeed everyone else apart form the uk can weaken their currency as they have a manufacturing base. The UK thinks they can play the same game, but with services and imports.

The Treasury and the central bank (|BoE) have engaged in a deliberate policy to devalue the £ and make us all poorer over the last 20 years and they're going to continue to do it through ZIRP, QE, massive levels of public debt (£2 trillion!) and a  huge deficit. I remember the pound being 1.80  to the dollar now it's a pathetic $1.23 and falling. This is no good for the economy or for us Brits. I suggest you protect yourself from the madness while there's still time.

 

 

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1 minute ago, Warlord said:

The Treasury and the central bank (|BoE) have engaged in a deliberate policy to devalue the £ and make us all poorer over the last 20 years and they're going to continue to do it through ZIRP, QE, massive levels of public debt (£2 trillion!) and a  huge deficit. I remember the pound being 1.80  to the dollar now it's a pathetic $1.23 and falling. This is no good for the economy or for us Brits. I suggest you protect yourself from the madness while there's still time.

 

 

Correct, they have and for at least 40 years in fact. It has been a point of consternation to me . I think the reason the pound has survived is because we are in general a stable society with for the most part laws that are upheld. 

You can only protect yourself by having zero debt and so much in the way of savings that even if the currency crashes you're still ok. Oh and a house. 

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  • 419 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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