In Harry Dent’s latest book “The Great Crash Ahead: Strategies for a World Turned Upside Down,” he tells the story of a 1972 research study in which children would receive additional treats if they could save the first treat (e.g., a marshmallow or an Oreo cookie) for 15 minutes. Of 600 children, only a third of them were able to delay gratification to get the additional treat. Four hundred children ate their first treat within 15 minutes and did not receive another one. The children gave up their right to future rewards to get what they wanted immediately. (Chapter 7, Consumers Are Too Much in Debt: The Credit Cycle Will Not Come Back).
Dent, a well-known economic expert, relates this story to the debt crisis in the U.S. We have been raised in a culture where many of us prefer to get things immediately, rather than to wait until we can afford them. We’ll buy things with credit cards – home furnishings, electronics, designer clothes, vacations and more – so we can have them now. Unfortunately, this type of thinking has caused an immense debt crisis in the U.S. from consumers extending all the way to the federal government. We have to stop spending, and start saving before it’s too late.
If the cookie example didn’t convince you, maybe this will. In 2010, Wells Fargo did a survey of middle-income Americans. Among those who responded who were in their 50s, the median savings was $29,000, compared to their stated savings goal of $300,000. Simply put, with only 15 years til retirement, this group had saved less than 10% of the amount they needed for retirement!
If you’d like to learn how you can not only save more money, but how to earn guaranteed returns on that money, tune into my weekly radio show each Saturday at 1 p.m. PST on KBRT 740 AM. Each week I talk about how to prepare for retirement in our volatile economy. I also give away free reports and Dent’s book to help you prepare for the future. And you can always reach out to me directly by calling or emailing my office with no obligation. I’m happy to answer your questions. In the meantime, I hope you’ll wait for the cookie. My clients will tell you it is worth it.