Overdraft sad face: why spendthrifts are good for the economy and good for me

Just thinking about what I wrote yesterday and I think that I’ve been a bit unfair.  One of the things about time and money is that it’s nobody else’s business what you do with it – in some cases even if what you are doing is illegal, dangerous or just plain stupid; it’s your time and money and you can do what you like – just try not to inflict the negatives onto other people.  As someone who was on to this a long time ago said better “Private vice, public benefits”.So, where does that leave us?  Well, the unintended consequence of always living beyond your means, finding too much month at the end of the money is that you need to work doubly hard to pay for it all.  And working hard for your money makes you just want to spend even more of it!  It’s a vicious cycle.

My own observations are that the less money you have the harder you work.  Think of the idle rich and the scampering poor. This is skewed a bit in the UK now where the benefits system has disincentivised working too hard or too much for millions – but for every scrounger there are probably two people desperate for more work (or money).

The problem for many people is that their money goes into buying things – spending money on goods, services – which is in fact giving money to other people to do things for them.  Since only people are paid money (you wouldn’t consider that a parking meter gets paid and it rich or that an ATM is rich but generous), it’s this flow of money and the scarcity of it all that keeps the plates of the economy spinning.  Remember the Credit Crunch?  The problems happened when people stopped giving each other money so readily.

GFF is not a great fan of spending money – it actually gives me discomfort akin to pain – I probably have Money Anxiety Disorder (helpfully named MAD!)  But I don’t like showing off and I don’t like buying expensive things – it’s a money blueprint that is hard to shake.  I get great satisfaction from owning assets that are worth something, pay ME for owning them and go up in value (and that’s why I don’t like cars).  So, I own parts of the companies and corporations that provide spendthrifts with the goods and services that they spend their money on like iPhones, Amazon junk, beauty products, banking services/money lending, internet services and petrol to drive to the mall and synthetic closes to buy there.


Image result for three little pigs

If we lived in a world where too many people saved and didn’t spend or invest, then we would all end up poorer.  I watched a documentary about Romania once and a poor farmer living in a poorly built house right out of the three little pigs.  The farmer was robbed one night of €20,000 of gold that he had hid around his house.  That is certainly a tragedy but it made me wonder.  If in a country that is relatively poor, how come a farmer is rich enough to stash gold coins around his house but isn’t rich enough to have an iPhone or Rolex watch?  Maybe the answer is that in the UK and other countries, we can rely on credit cards, overdrafts, 0% transfer cards, being paid at the end of the month, remortgaging our houses to release our equity and getting luxury cars on PCP and your PPI claim.  All this involves the promise to repay.  And releasing this money into the world allows others to borrow/spend to do that same.  It creates stimulation for goods/services which leads to jobs and salaries to pay for someone else’s goods and services.


Image result for debt it wealth

And it all goes off without a hitch, unless something totally unpredictable happens, like you lose your job.  But you can always get PPI to cover that.

Take care and don’t keep all your gold under just one house!

Thanks, GFF


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