29 responses

  1. Lance @ Money Life and More
    November 4, 2012

    A lot of people seem to not understand this. I totally agree with you though. If the rich spend it is a good sign for our economy.

    • Money Reasons
      November 5, 2012

      Yeah, unfortunately, I think the uncertainty of the country right now is causing the richer folks to hold on tight lately. Not to mention the protests against the rich. I know if I were rich I wouldn’t be out there spending right now… At least not in such an environment…

  2. Funancials
    November 4, 2012

    The problem in America is that the middle class spends like the rich giving everyone a false sense of wealth.

    • Veronica @ Pelican on Money
      November 5, 2012

      Exactly.

    • Money Reasons
      November 5, 2012

      True, I don’t mind as long as the middle class doesn’t go into debt while spending. There is definitely an ideology that spending while you are young has it advantages vs saving money until you are old.

  3. JT
    November 4, 2012

    I heard on the radio that the velocity of money was at an all-time low. Assuming this is true, I suppose it is due to the uncertainty of the election and the approaching fiscal cliff. We will be in a recession next year.

    • Money Reasons
      November 5, 2012

      I agree exactly (and just commented similarly above to Lance’s comment.

      With respect to the recession next year, probably, recession goes in cycles, and we are now officially do for one. Not on the magnitude of the “Great Recession”, but more the typical type I hope.

      Now if the European countries somehow fix their issues, a recession might be avoided or at least lessened.

      I hope it’s more of a fiscal speedbump instead of a cliff :)

  4. The College Investor
    November 5, 2012

    I think to make the economy better it is always good for people to buy things and not to hold on to tightly to their money. The only way for this cash deprived economy to get a boost is for people to spend a little bit.

    • Don
      November 6, 2012

      Definitely! The more activity the better, at least from an economy flowing perspective :)

  5. Christa
    November 5, 2012

    The election definitely affects spending. I hope that after the election we can all get back to normal or to a new normal.

    • Don
      November 6, 2012

      Totally agree. It would be nice to see the economy grow again! I think once the European problem gets sorted out, that will help too.

  6. Jerry
    November 5, 2012

    I think if you have money to spend then by all means spend it. It does lead to stimulating the economy. As long as you have insurance and are prepared for the future then it shouldn’t matter how the rich or anyone spend their money.

  7. krantcents
    November 5, 2012

    I want everyone to buy because there are not enough rich people to affect the economy. Remember there are only 1%.

    • Don
      November 6, 2012

      true, I was actually thinking of the top 5% (my top 1% in the article above was just an example). The top 5% holds 50% of the wealth (or pretty close to that number). If they stop spending, it’s obvious that an impact would be felt.

      Consumption and it’s effect on the Economy is a tricky balance.

  8. FIrst Gen American
    November 6, 2012

    SO true indeed. I’m definitely not part of the 1%, but having lived below the poverty line and now on the other end where I have lots of disposable income, I definitely do more good with money. I buy stuff, I help keep a variety of independent contractors solvent such as daycare people, house-cleaners,handymen, realtors, etc. Plus, I never gave a dime to charity when I was dirt poor and now I give quite a lot of my time and money.

    I work in the manufacturing sector, so I’m a big fan of saving up for your purchases vs financing them. I guess in both cases, you are creating jobs, but I’m biased towards funding manufacturing jobs versus bankers.

    • Money Reasons
      November 7, 2012

      I totally agree on financing purchase being a less preferred route!

      Bankers and the fiscal system is a necessary ingredient unfortunately. But if they spend their money, at least we all benefits. So I’m weird in that I want rich people to spend money, while others look at them negatively. Let the money flow :)

  9. Thomas S. Moore
    November 6, 2012

    I agree that we need the rich/wealthy people to spend money at it just makes to economy work better. I don’t think they should flaunt it but that’s my person opinion. We need more money being pump into the system from people with money and not the government injecting it. More spending from everyone is the key.

    • Money Reasons
      November 7, 2012

      I don’t even mind if they flaunt it, just respect others too. As long as they are nice (and there are nice rich people) I don’t mind anymore, and in some ways I’m almost happy for them. almost… ;)

  10. Drew @ Objective Wealth
    November 7, 2012

    A lot of folks here are talking about “if only people would spend more of their money, that would save the economy.” What the economy actually is needs is more production – more goods, i.e. more real wealth injected into the system in the form of ‘goods produced but not consumed.’ That represents real savings and wealth, compared to paper money, and is the real basis of a thriving economy. Spending by consumers qua consumers is the end of the line, not the source.

    • Money Reasons
      November 7, 2012

      Oh, my point of the article was that we shouldn’t be so envious of the rich when they spend money. When the rich spend money it helps the economy, when they hoard money, it create a less liquid environment.

      As for the production of good, if nobody is buying the goods, it really doesn’t provide that much benefit to produce them.

      Money is just a medium for value exchange, it’s a tool or something to be worshiped or envied.

  11. Parvinder
    November 8, 2012

    I totally agree with you. If rich spend their money, there will be more manufactures, more shops and more jobs.

  12. Pauline
    November 11, 2012

    I just bought a little house in Guatemala and can see it directly with the community next to my house. I am “the rich”. Since I arrived, I have employed a carpenter, a handyman, a mason, bought some hens, eggs, building materials… Half of the community lives in poverty according to the statistics bureau. Without flaunting it, I can see the impact that my money has had on them.

    • Money Reasons
      November 11, 2012

      That’s awesome! Spending money is good if you can afford it. People jump to conclusions about rich spending money, but I think it’s great. It creates liquidity. Some rich (like Warren Buffett) hold onto their money to long and then give it to charity later in life. While that’s nice, I think it would have been more beneficial for him to spend his money all along. Personally, I’d rather spend money and give someone a job to do than give it to charity later in life. But that’s me :)

  13. Investeem
    November 12, 2012

    Hi, your post is an Editor’s Pick in this week’s edition of Carnival of Investing: http://www.investeem.com/2012/11/carnival-of-investing-11.html

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