A Financial Planning Lesson From the Chinese
Financial planning can seem like a nit-picky, numbers crunching sort of thing at times. Two reasons I think people avoid doing serious financial planning are: 1) they don't want to face the truth about their real situation; 2) they dread having to deal with all the geeky numbers-crunching stuff like budgets, savings percentages, retirement projections, or the details involved in putting together a proper estate planning.
But sometimes, a simple idea can capture the fundamentals in just a few words. Here's one simple idea from, of all people, a former vice-chairman of the Chinese government Standing Committee (the de facto highest and most powerful decision-making body) who now heads their drive for more "green" energy. Cheng Siwei is quoted as having said, "The US spends tomorrow's money today...We Chinese spend today's money tomorrow."
I can only assume Mr. Cheng's accuracy regarding Chinese spending habits. On the other hand, I can absolutely affirm his analysis of US spending habits.
I don't know about you, but reading this Chinese government official saying this kind of bugs me. Why? Is he saying anything untrue; is he slandering us Americans? Sadly, no. And that's what bugs me.
How did it get to this? How did a people, known for things like self-reliance, industry and gumption (common sense) get to a point where we've spent money we haven't made yet?
It didn't happen overnight. It kind of crept up on us since the end of World War II. Not that people didn't take on too much debt in the past. But nothing like what we've seen in the last few decades.
Frankly, it makes financial planning a lot more challenging these days. You meet more people, making good money, who literally have nothing saved. Nothing. They'll have a big house in a fancy neighborhood with an even bigger mortgage, a few bucks in their 401k...and that's pretty much it. Sometimes my head spins.
Oh, at the end of the interview with Chen Siwei, he quotes, of all people Benjamin Franklin: "He who goes a borrowing goes a sorrowing."
Isn't it kind of embarrassing having a Chinese government official quoting one of our own founding fathers like this? He must have chuckled a bit inside when he quoted Franklin, don't you think?
But sometimes, a simple idea can capture the fundamentals in just a few words. Here's one simple idea from, of all people, a former vice-chairman of the Chinese government Standing Committee (the de facto highest and most powerful decision-making body) who now heads their drive for more "green" energy. Cheng Siwei is quoted as having said, "The US spends tomorrow's money today...We Chinese spend today's money tomorrow."
I can only assume Mr. Cheng's accuracy regarding Chinese spending habits. On the other hand, I can absolutely affirm his analysis of US spending habits.
I don't know about you, but reading this Chinese government official saying this kind of bugs me. Why? Is he saying anything untrue; is he slandering us Americans? Sadly, no. And that's what bugs me.
How did it get to this? How did a people, known for things like self-reliance, industry and gumption (common sense) get to a point where we've spent money we haven't made yet?
It didn't happen overnight. It kind of crept up on us since the end of World War II. Not that people didn't take on too much debt in the past. But nothing like what we've seen in the last few decades.
Frankly, it makes financial planning a lot more challenging these days. You meet more people, making good money, who literally have nothing saved. Nothing. They'll have a big house in a fancy neighborhood with an even bigger mortgage, a few bucks in their 401k...and that's pretty much it. Sometimes my head spins.
Oh, at the end of the interview with Chen Siwei, he quotes, of all people Benjamin Franklin: "He who goes a borrowing goes a sorrowing."
Isn't it kind of embarrassing having a Chinese government official quoting one of our own founding fathers like this? He must have chuckled a bit inside when he quoted Franklin, don't you think?
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