I think mainly it’s a matter of scale. The gap between that upper 10% and everyone else is almost too vast to comprehend.
Then there is the issue of what “savings” can actually accomplish. Even though I learned about the miracle of compound interest in my early 20s, the most outrageous predictions about my own potential wealth after 40 years of saving could never come close to what the upper 10% have amassed individually today. A couple of million maybe. But 200 Billion…?
People can intuitively grasp that not saving has consequences — especially if they’re going into debt at the same time in order to consume conspicuously. Almost everyone I know who is over 60 has looked back on their lives with chagrin regarding how they spent everything they earned. At the same time, many would not have made different choices. They don’t regret traveling in Europe in their 20s and meeting the love of their life overseas. They don’t regret buying expensive instruments and making music with friends. They don’t regret paying off their college loans, or buying their dream house on some wooded acreage. So what quality of life is anyone really willing to sacrifice in order to amass more wealth…? But the conspicuous consumption issue…or not budgeting…or not planning financially at all…well, that’s probably an issue of education more than anything else. I was very conscious about what I was sacrificing (over the longer term) by traveling, eating well, going to concerts, etc. But I don’t think most people are all that aware…until it’s too late.
And that brings us to what the “surprise” is really all about: an awakening to an unpleasant situation that was truly unexpected. I am currently helping manage the finances and healthcare of family members with dementia. Some of those family members had saved quite a bit. Some saved nothing. In both cases, they weren’t at all prepared for what was coming. ALL of their resources will be exhausted LONG BEFORE they arrive at the final stages of care. ALL OF THEM. And so for the ones who saved, it really didn’t matter that much — they are still suffering and will continue to suffer, and there will very likely be nothing left to pass on to their beneficiaries…little safety or comfort for themselves, and no legacy for their loved ones, despite all that careful saving and planning.
So even the objective of amassing wealth loses its allure in the face of such circumstances. If things are going to end like that regardless, then why NOT spend everything now to enjoy life?
And this speaks to a much more fundamental problem IMO: the reliance on individual or familial wealth to navigate well-being, instead of developing a more compassionate civil society with supportive institutions. It points, I think, to the fundamental flaw in the materialist/individualist mindset.
My 2 cents.
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