Friday, February 23, 2007

Don't Confuse Savings With Wealth

From The Mess That Greenspan Made Blog:

Everyone just stop it! If, in some twisted sort of way, redefining "wealth" or "net worth" as "savings" makes you feel better about the world and your own lot in life, then go ahead and do it - just do it in private.

Whatever gets you through the day.

But, please, stop sharing your rationalizations with the rest of us who prefer to continue believing that "savings" (as either a verb or a noun) is not something that can come and go as quickly as a subprime lender.

Call it old fashioned if you want, but, just leave the word "savings" alone. Please.

Since the personal saving rate turned negative in 2005 and then plunged even further into the red last year, there has been a steady stream of commentary and research papers intent on blurring the lines between "wealth", "net worth", and "saving(s)" - sort of like a bad doctor anxious to ease the immediate discomfort of an ailment with one pill or another while the underlying illness remains untreated.

Wealth is the value of your assets.

Net worth is assets minus liabilities.

Saving is income less expenditures or money put aside.

Stop confusing them.

Mr. Iacono may be willing to give them the benefit of the doubt, but I am not convinced that those who post "confused" information are doing it unknowingly. I have a suspicion that said "confusion" is actually disinformation.

I fear that the comment by "Python" may be the correct one. Python said:

Apollo, I see it as: "sacrifice the sheep to hasten the inevitable." The PTB are straight out of "1984". Their newspeak is designed to confuse and to ensure conformity. God help anyone who is not exercising critical thinking skills in every aspect of their life. The sheeple are about to get slaughtered.

(I think "PTB" stands for Powers That Be.)

Read the rest of the linked article and educate yourself so you can be wary of financial traps.

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