America

10 Small Towns With the Most Millionaires Per Capita

Carrie Kirby — Thu, 05 Apr 2018 08:00:06 +0000

When you think of millionaires' neighborhoods, you might picture Manhattan's Park Avenue, San Francisco's Pacific Heights, or Los Angeles' Rodeo Drive. But did you know that a third of the towns with the most millionaires per capita are little more than hamlets with around 20,000 residents?

What do these mini-cities have going for them to attract the wealthy in droves? For some, it's scenic beauty and recreational opportunities; others seem to make their own millionaires with rich natural resources or high-paying jobs.

We can't promise you'll be rich if you move to one of these towns, but who knows? A little gold dust might rub off on you.

1. Los Alamos, New Mexico

Los Alamos isn't just a small town with the highest density of millionaires — it has more millionaires per capita than any municipality, big or small, in the nation, and it has held that spot for more than a decade.

The funny thing is that Los Alamos doesn't look like a wealthy town. It doesn't have the Fendi boutiques or Michelin-starred restaurants you would associate with the lifestyles of the rich and famous, and it doesn't have the beach or ski resorts that tend to draw millionaires to other locales. There is only one explanation for the density of millionaires: The Los Alamos National Laboratory, where engineers and other highly trained employees earn an average annual salary above $100,000.

Population: 12,019

Percent millionaires: 11.63

2. Summit Park, Utah

This ski destination became the location with the second most millionaires per capita in 2014 and hasn't slipped since. You might not have heard of Summit Park, but you have probably heard of nearby Park City, host to Robert Redford's famous Sundance Film Festival. That's one explanation for the density of millionaires in Summit Park; spillover from glamorous Park City.

Population: 7,775

Percent millionaires: 10

3. Juneau, Alaska

It was riches that originally created Juneau; the Gold Rush, to be exact. Today's Juneau millionaires probably don't trace their wealth to gold, but they may have other valuable things found under the ground to thank. Alaska in general has an embarrassment of millionaires — Phoenix Marketing International puts it at number five among all states for millionaires per capita. This probably has to do with the state's richness in natural resources such as petroleum.

Population: 31,275

Percent millionaires: 9.1

4. Williston, North Dakota

Many farmers in this rural town receive tens of thousands of dollars per month in oil royalties, making for a low-key type of millionaire who would look less out of place at Farm & Fleet than at Emporio Armani.

Population: 14,716

Percent millionaires: 8.4

5. Torrington, Connecticut

This booming town in Litchfield County has long been a getaway for Manhattan's elite looking to escape the city. Gorgeous scenery, along with great food, shopping, and culture make this a coveted area for the wealthy.

Population: 36,383

Percent millionaires: 8.3

6. Edwards, Colorado

The explanation for the millionaires in Edwards is similar to the explanation for Summit Park: proximity to a ritzy ski town. Edwards is quite near Vail Ski Resort. Don't expect to see all those millionaires midweek though, since they may not live in their mansions — ahem, cabins — full time.

Population: 10,266

Percent millionaires: 8

7. Gillette, Wyoming

Another mining town, Gillette made its fortune off coal as well as uranium. You can catch a glimpse of what made so many of these Cowboy State residents wealthy at the free Campbell County Rockpile Museum.

Population: 29,087

Percent millionaires: 8

8. Vineyard Haven, Massachusetts

All you need to know about why this town has so many millionaires is this: It's located on the island of Martha's Vineyard. Presidents vacation there. Bill Gates, Oprah Winfrey, Larry David, and David Letterman own summer homes there or are seen around town regularly.

Population: 2,114

Percent millionaires: 7.8

9. Oak Harbor, Washington

You might have never heard of this town, but another familiar name can explain why it has so many millionaires: Microsoft. Oak Harbor is located on Whidbey Island, a short drive from Seattle. Billionaires Bill Gates and Jeff Bezos don't live there (they're neighbors in nearby Medina), but it's likely that Microsoft midlevel managers swell the ranks of millionaires in Oak Harbor.

Population: 22,075

Percent millionaires: 7.5

10. Jackson, Wyoming/Idaho

The Jackson Hole you've heard so much about isn't actually a town, it's the valley that hosts the town of Jackson. So, you guessed it; this is another ski playground for the rich, which encompasses areas in both Wyoming and Idaho. It also happens to be the most economically unequal metropolitan area in the U.S., with the top 1 percent bringing in an average annual income of $20 million and the bottom 99 percent averaging just below $94,000, according to the Economic Policy Institute.

Population: 9,577

Percent millionaires: 7.4

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways American Retirement Is Changing

Damian Davila — Tue, 18 Oct 2016 09:00:08 +0000

Somebody once said, "Retirement can be a great joy if you can figure out how to spend time without spending money." And because of the ever-rising cost of living, this quote is more true than ever. The whole concept of retirement isn't what it used to be, and retirement planning sure isn't, either.

Just like you can expect to require a higher goal for your nest egg for a comfortable retirement, you can expect many other ways in which your retirement life will be different from that of previous generations. Let's reviews some of the ways the scope of retirement is changing in the U.S., including financial and social changes.

1. Fewer Americans Expect Social Security as Major Source of Income

More and more American workers are expecting Social Security to play a smaller role in their income during retirement. In 2016, only 35% of U.S. workers expect Social Security to be a major source of income in retirement. There are two reasons behind this. First, 32% of workers aren't confident in the ability of the Social Security Administration (SSA) to continue providing benefits of at least equal value to the benefits provided to current retirees. Second, given this lower confidence in the SSA, 46% of workers expect employer-sponsored retirement saving plans to be a major source of income in 2016, up from 43% in 2010.

2. More Americans Are Postponing Their Retirement Age

Given that nearly seven in 10 Americans have less than $1,000 saved for retirement, it shouldn't be surprising that 77% of them are postponing retirement. For 26 years, the Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI) has been tracking the American worker's confidence in their ability to afford a comfortable retirement. This survey is clearly showing an increasing retirement age trend over the long-term.

The good news is that upon reaching your full retirement age, ranging from 65 to 67 depending on your birth year, you get 100% of the benefits that you're entitled to. For every additional year past your full retirement age that you wait to retire, you can get up to an 8% increase in benefits through delayed retirement credits from the SSA. (See also: 6 Smart Ways to Boost Your Social Security Payout Before Retirement)

3. More Americans Are Expecting to Never Retire

Never retiring may seem like a strange notion, but consider that continuing to work part-time or full-time past age 70-1/2 can allow you to delay your required minimum distributions from certain retirement plans, including traditional 401Ks, Roth 401Ks, and IRAs. By rolling over your old retirement account to an eligible new employer-sponsored plan, you can continue to contribute to your new retirement plan and delay applicable income taxes. Not everybody can do this, such as those who are owners of 5% or more of the business sponsoring the retirement account.

Before trying this strategy, consult with your previous and new retirement plan administrators and your financial adviser to avoid any potential penalties and have a full picture of the process.

4. $2 Million Is the New $1 Million

More and more financial advisers are making the case to upgrade the old rule of thumb of $1 million for retirement to $2 million. Consider the following:

In 2016, the average student loan balance was $37,172, up from $33,000 two years earlier.
In the last four years, rents are rising quickly, with a 3.8% increase in 2016, alone.
According to NerdWallet, in 2015, the average U.S. household carrying debt had a $15,675 credit card balance, a $27,865 auto loan balance, and a $172,341 mortgage balance.

In 2012, 30% of adults age 65 and older had outstanding debt, up from 44% in 1998. Given that more Americans depend on debt to get by, many have to address the fact that some debts don't just go away even after they're gone. Combine that with ever-rising living costs and you can understand why some of us need to plan for a higher retirement saving goal. (See also: What Happens to Your Debt After You Die?)

5. Americans Are Living Longer

Another reason why more Americans are deciding to postpone their retirement age and looking into bigger nest eggs is that they are living longer. Back in 1980, the life expectancies for American men and women were 70.0 and 77.4, respectively. According to the latest data from the SSA, a man and a woman reaching age 65 today can expect to live, on average, until age 84.3 and age 86.6, respectively. However, about 25% of those 65-year old Americans will live past age 90 and 10% of them will live past age 95.

Knowing that you're very likely to live longer should be great motivator to set up your retirement plan and have your retirement strategy in place. Even if you're 15, 10, or even five years away from retirement, you can still take several steps to boost your nest egg. (See also: 7 Retirement Planning Steps Late Starters Must Make)

Today is the best day to get your retirement saving plan back on track.

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 American Cities Where You Can Retire On Just Social Security

Aaron Crowe — Tue, 20 Sep 2016 10:30:05 +0000

The statistics on how unprepared Americans are for retirement can be terrifying. The median retirement account balance is $2,500 for all working-age households and $14,500 for near-retirement households, according to a 2015 study by the National Institute on Retirement Security.

Two-thirds of working families fall short of conservative retirement savings targets for their age and income based on working until age 67, the report finds.

With virtually no retirement savings for the average working household and 45% (nearly 40 million) of working households not having any retirement assets, their best hope for surviving after age 67 may be income from Social Security.

What Social Security Pays

The average monthly Social Security check as of June 2016 was $1,234, according to the Social Security Administration, or SSA. Where could you afford to live on such an income?

There are some good options, but before we get to those, let's be a little more generous with the SSA income, based on the government's statistics.

While the average monthly benefit was $1,234, 82% of beneficiaries receive a little more — $1,280 from "Old-Age and Survivors Insurance" SSA beneficiaries. The largest average monthly SSA benefit was $1,348 for retired workers, who made up 67% of the pool.

Assuming you're a retired worker receiving the average $1,348 each month from SSA, that's still a low amount of money to live on each month, considering that a retirement planning rule of thumb is to plan on having 70%–80% percent of your pre-retirement income replaced with SSA, a retirement account, or other form of income in your old age.

At 80%, that $1,348 would equate to a pre-retirement monthly income of $1,685, or $20,220 per year. If you were comfortable living on $20,220 per year before retirement, then living on 80% of it during retirement should be just as comfortable, the theory goes.

For a couple who are both retired, their SSA income would double to $40,440 per year. But for our purposes, let's assume one retiree is living by themselves.

So, where to live on the average SSA check of $1,348 per month for retired workers? In no particular order, here are five cities where it's affordable.

1. Buffalo, New York

Buffalo may come as a surprise for being a cheap place to live because it's in New York state. But the median monthly rent in Buffalo is $512, making it the cheapest city in the U.S. to live in, according to a SmartAsset analysis. Buffalo also has the lowest cost of living at 79.34, meaning that the U.S. average is 100 and that $100 in groceries, for example, would cost $79.34 in Buffalo.

2. Johnstown, Pennsylvania

If you're looking for the cheapest rent in the country, this city of 20,576 residents has it with a gross median rent of $466 per month, according to data from the U.S. Census. Since housing is one of the biggest expenses in life, such low rent can make other expenses a lot more affordable.

The average per capita income in Johnstown is $16,153, according to FindTheHome, putting the average SSA income in retirement above the average there. In this city, you'd be rich.

3. Memphis, Tennessee

If you're looking for a large U.S. city that's affordable in retirement, Memphis is it. This city of 653,450 has low housing costs. The average apartment rent of $709 per month is 21% below the U.S. average, and the median home value of $98,300 is 46% below the U.S. average, according to Kiplinger.

4. Akron, Ohio

Living in the center of the country is usually cheaper than it is elsewhere, and Akron, Ohio proves that point by being one of the most affordable places to live in the country. Its median home price listing in August 2015 was $120,450, and the median household income was $45,628 — putting the average SSA income at just below the median. The amount of monthly income spent on housing, utilities, and commuting in Akron was 28.9%, allowing retirees to spend about 70% of their income on other things.

5. Indianapolis, Indiana

Listed by Trulia as one of the best cities to move to for a high-paying job, Indianapolis has low home prices for Millennials looking for work and for retirees, too. The median home price of $130,000 is $58,900 below the median home price in America. That allows about two of every five renters to be able to afford a typically priced home there. For retirees who sell their homes and have enough money to buy a home outright or put down a large down payment, then living with little or almost no housing costs can leave a lot of room in their budget for other things.

The good news is that there are plenty more U.S. cities that are affordable for retirees who only have an income from Social Security. These are only five of them, and are a good start to investigate more when deciding on the cheapest places to retire.

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This article is from Aaron Crowe of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 More Fun, Affordable Train Trips

Amanda Meadows — Thu, 17 Sep 2015 11:00:34 +0000

Trains are not only a huge part of our history and economy, but they make for relaxing and scenic travel. We last gave you five enjoyable and reasonably priced train trips for the summer. Now, try going on one of these five additional fun, affordable train trips this fall.

1. Cross Country: California Zephyr

Have you always wanted to venture out into what was the wild west of the 1800s without the horrific summer heat? The California Zephyr travels on a 2,438-mile route from Chicago, IL to Emeryville, CA, passing through seven states on a journey made by western settlers during the Gold Rush and other big migrations. The terrain changes from canyons, to rivers, to mountains, to deserts, to valleys with dramatic beauty. Key sights to see: Colorado River, the Donner Pass, the Rockies, and the Painted Desert.

Price: As low as $163 per adult and approximately $80 per child for this 51-hour train trip.

2. New Hampshire: Mount Washington Cog Railway

New Hampshire is beautiful as the leaves turn gold and the air gets crisp. What better way to usher in the season than by riding the Mount Washington Cog Railway, the world's first train to climb a mountain? The historic cars are cute and photo-worthy on their own. This makes for an easy day trip, because the ride is only three hours long, which includes an hour to hang out on the top of Mount Washington and snap pictures of the view. You'll want to try this one before winter settles in, as that's when the schedule is very limited.

Price: $73 per adult, and $39 per child for this three-hour scenic ride.

3. New York: Adirondack Scenic Railroad

Of course, Upstate New York in the fall is quite the stunner, too. The Adirondack Scenic Railroad is definitely not hyperbole: this train weaves from Utica to Lake Placid, through the small hamlets in between. Keep your eyes on the window for the gorgeous scenery of lakes, rivers, and the pretty peaks of the Adirondacks. Additionally, lots of deer, bears, geese and other migrant birds are plentiful and on display through the trip. Fall events on this train include beer and wine tastings and a family Halloween theme.

Price: Adults cost $39.50 and children cost $29.50 for this trip.

4. Washington State: Mount Rainier Scenic Railroad

If you're a fan of mountains and the Pacific Northwest, this is a must-do attraction. The Mount Rainier Scenic Railroad and Museum happens to be the longest running steam train in the region and takes you through the forests and foothills of Mount Rainier. This two-hour train ride includes lots of information on the history of using steam locomotives for logging, the chief industry in the region in the late 19th through early 20th centuries. The MRSR also offers a Civil War package complete with a Civil War reenactment.

Price: This train charges $32 per adult, $72 per child between five to 12 years old, $18 per child under three to four years, and infants under three are free.

5. North Carolina: Great Smoky Mountains Railroad

The Great Smoky Mountain Railroad takes you through a uniquely pretty trail of the South. North Carolina boasts tons of indigenous beauty: 125 types of trees, 1,000 varieties of flora, and over 300 different animal species. You'll also get a chance to look inside the Great Smoky Mountains Train Museum. Like some of our other favorite train rides, this one also has various food and drink tasting voyages. For Halloween, there is a Peanuts Pumpkin Patch Halloween theme for the kids as well as a Halloween Masquerade theme for grown ups.

Price: For the average trip (non-themed and in family cars), adults cost $66 and children cost $38 per round trip ride.

Have you ever taken any of these train rides? How was it?

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This article is from Amanda Meadows of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

America Is Back: 4 Economic Predictions for 2015

Damian Davila — Tue, 10 Feb 2015 14:00:04 +0000

With 2014 already in the books, everybody is dusting off their crystal balls and predicting what the 2015 U.S. economy will look like.

And the predictions are looking awesome. Here are four that explain why 2015 may be a great year for the U.S.

1. U.S. Minimum Wage Will Be Higher

Americans are overdue for a better hourly rate. At the federal level, the last minimum wage increase was back in July 2009. However, before 2007 the minimum wage had been stuck at $5.15 per hour for 10 years.

Though the labor market has experienced significant recovery in recent years (the unemployment rate is now a much-improved 5.9%), many people are still stuck in low-paying jobs, and demanding better pay. Accordingly, lawmakers have agreed to raise the minimum in several U.S. cities and states in 2015:

$12.25: Oakland, CA (March 2, 2015); San Francisco, CA (May 1, 2015)
$11.00: Seattle, WA (April 1, 2015); Berkeley, CA (October 1, 2015);
$10.50: Washington, D.C. (July 1, 2015)
$9.15: Connecticut (January 1, 2015); Vermont (January 1, 2015)
$9.00: Rhode Island (January 1, 2015); Massachusetts (January 1, 2015); Minnesota (August 1, 2015); New York (December 21, 2015)
$8.75: Alaska (January 1, 2015); West Virginia (December 31, 2015)
$8.00: Nebraska (January 1, 2015); Maryland (January 1, 2015)
$7.25: Federal minimum wage

The years ahead look even better. For example, my home state of Hawaii is set to experience minimum wage increases every year for the next three years: $7.75 (2015), $8.50 (2016), $9.25 (2017), and $10.10 (2018).

2. U.S. Consumer Spending Power Will Be Strong

The fracking revolution has increased oil production, which, combined with lower global energy demand, caused oil prices to decrease about 50% in 2014. This has benefited the average U.S. consumer by providing extra room in their budget. Some places around the country are enjoying gas prices below the $2.00 per gallon mark. However, there are several other goods and services that will also experience price drops. (See also: 8 Buys That Will Be Cheaper in 2015)

The best news is that no matter which U.S. inflation forecast you peruse, price levels are forecast to remain stable in 2015, meaning your dollar will buy just as much (if not more in some cases).

3. U.S. Will Continue to Attract Foreign Investment

In 2015, the U.S. is poised to outperform almost all developed nations. Our country is finally experiencing the benefits from the end of 2009's recession and our GDP is expected to grow 3% for the first time in 10 years. Some of the key drivers of our strong economic growth are:

Lower oil extraction costs due to the shale oil boom;
Increase in U.S. natural gas exports in 2015;
Lower gas prices;
Overall increase in consumer spending in goods and services;
Increase in government spending; and
Increase in affordable new homes in 2015.

These and other economic factors create an ideal scenario for America's economy, and economists forecast that our positive economic outlook will attract strong foreign investment in 2015.

4. U.S. Interest Rates Will Go Up

This is the consensus from Wall Street's biggest banks.

And this is not bad news at all. Given our stronger economic growth, the Federal Reserve needs to tighten up interest rates a bit. Otherwise, the economy would get "too hot." Plus, it rewards savers by giving their accounts a boost. According to the economists from those same Wall Street's big banks, here is what we can expect:

Short-term rates: Forecasts put this federal funds rate at 1%.
Long-term rates: The expected rate for longer-term securities, such as a 10-year T-bill, is around 2.5%.
30-year fixed mortgages: A separate report predicts that this critical interest rate should be just 4.4% at year-end. This is a slight increase from current 30-year fixed rates averaging between 3.60% to $3.90, depending on location.

2015 is likely to be the year when the U.S. economy's recovery is felt by most average Americans. While not every single economic problem has been solved, these four predictions show us that there is good reason to stay positive.

Do you expect 2015 to be better for the economy — and your pocketbook?

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How More Vacation Time Can Increase Productivity

Glen Stansberry — Tue, 02 Nov 2010 20:11:13 +0000

Link:

http://www.openforum.com/idea-hub/topics/lifestyle/article/how-more-vacation-tim...

In a previous article, I wrote about why Germans are more productive than Americans but still have more vacation time. While researching the article, I found plenty of examples of other countries that also kick the pants of Americans in terms of workplace productivity, despite taking more vacation and often working less hours.

We Americans pride ourselves on our hard work ethics, rooted deeply in our Puritan background. It could be argued that "hard work" is part of our culture and heritage, and deeply important to our identity as a culture — but if other countries have fewer working hours and longer vacations, and are producing the same or more than us, then our work ~~process~~ obsession might need to be reevaluated.

How the U.S. Ranks in Productivity

In 2009, the consulting firm Mercer ran a study to determine the most competitive countries based on their gross domestic product (GDP). In terms of competitiveness, the U.S. is still the best in the world. However, if you look a little closer at the numbers and compare them with other labor statistics, you'll find that the U.S. ranks below other countries in terms of gross domestic product per hours worked.

In layman's terms: We're not as productive as other countries that take longer vacations.

A 2009 study by Expedia found that the United States ranks last in vacation days with an average of 10 days a year. Here are a few successful countries that thrive while giving more vacation than the U.S. (data taken from a BusinessWeek article):

Finland

Finnish workers have an average of 40 vacation days a year and rank 6th on the Global Competitiveness scale.

France

French workers also have an average of 40 vacation days, and France is 98.2 percent as effective as the U.S. in terms of GDP per hours worked.

Austria

Austrians average 38 vacation days a year, and 35 work hours a week. Despite all the "downtime," they still rank 14th on the Global Competitiveness scale with an unemployment rate of 4.3 percent. (At the time of writing this piece, the U.S. is at 9.2 percent unemployment; it was at 9.4 percent when the BusinessWeek article was written.)

Sweden

Swedes have 36 vacation days a year and are still ranked 4th on the Global Competitiveness scale.

What do these countries prove? While the U.S. is still king in terms of competitiveness (as of 2009), other countries where employees work fewer hours per week are still nearly as productive (if not more) than the U.S. while taking more vacation.

Take Belgium and the Netherlands. Data from the Organization for Economic Cooperation & Development shows that these countries mandate 30 and 28 vacation days a year, respectively, and are still 2 percent more productive than the U.S. Tiny Luxemborg dishes out 32 yearly vacation days and is a whopping 27 percent more efficient than the U.S.

The Cost of Not Taking Vacations

The evidence above proves that taking vacations is good for not only your sanity but also for the bottom line. Benefits like relaxation and rejuvenation are immediate effects of vacation. (I myself just came back from a cruise in the Bahamas with my wife and can vouch for these fantastic benefits.) However, there are more benefits to vacations than meet the eye.

When you take more vacations, you relieve stress. Stress is a major health issue for workers and has even been called the "New Tobacco" because of the physically damaging effects it creates for your body. Studies also show that men who don't take regular vacations are 32 percent more likely to have heart attacks than those who do, and women are 50 percent more likely to have heart attacks if they don't take vacations.

The recent recession might have a silver lining — researcher Dr. Stephen Bezruchka of the University of Washington School of Public Health believes that the recession and the rising unemployment rates have had a positive impact on American's health. According to Bezruchka, Americans are sleeping more, eating better (by not eating out as often), and spending more time with family. Even though one never wants to see unemployment as a benefit, it seems clear that working less has a direct and positive impact on overall health.

What about employees who have accrued vacation time, but don't take advantage of it? Expedia conducts a yearly study concerning vacation times, and in 2009 it found that 34 percent of Americans don't take all of their allotted vacation time. Not only is this a health factor (higher stress, etc.), but organizations who let employees' vacation times accrue might have to pay for those days upon termination, which could be quite costly to the organization.

As we Americans continue to find ways to become more connected with our work through technology, it might be helpful to look at how the "old" way of working could be beneficial: taking more vacation, leaving "work" for the workplace, and taking better care of our health.

After all, it is just a job.

This article is from Glen Stansberry of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Americans' savings rate up to almost 7% - who benefits?

Xin Lu — Mon, 29 Jun 2009 21:31:24 +0000

According to the Bureau of Economic Analysis, the personal savings rate in May 2009 was 6.9%. This a 15 year high and a far cry from the negative savings rates of just a few years ago. Although a part of the increase in savings comes from the large stimulus bills passed recently, most of the increase seems to come from changes in Americans' spending habits. So who benefits from a higher personal savings rate?

First of all, it seems that banks should be happy with this development. Since the stock market took a nose dive most people are putting their savings in cash deposits. According to the LA Times savings deposits at U.S. banks have surged by $4.48 trillion since last September. Additionally, banks are paying very meager rates on savings deposits now, so this means that they are raking in oodles of profits when they lend the money out.

Next, businesses that help people save money are also winning big as Americans shift to being more thrifty. For example, stores like Walmart, Ross, and Dollar Tree are doing well because they align with consumers' goals of paying less. Vegetable and fruit seed companies also reported rises in sales due to consumers' desire to save money through growing their own food. Basically the concensus is that frugality is now "in".

Many economists say that the increase in savings rate is actually bad for the current recession because it means that Americans are spending less as a whole. Since America's GDP is mostly based on personal consumption it makes sense that more saving takes a bite out of the GDP. However, it seems to me that Americans are just starting to behave rationally and that cannot be a bad thing. Historically Americans' savings rate has been above 7% until the early 1990's and it seems that things are just beginning to return to normal now. I think the higher savings rate shows that Americans as a whole are starting to realize that living on credit is not sustainable, and eventually this shift in mentality will benefit the country as a whole.

Who do you think benefits the most from the higher savings rate in America?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Patriotism and Personal Finance - A Brief Walk Through American History

Xin Lu — Fri, 04 Jul 2008 08:00:02 +0000

To all the Americans out there, happy Independence Day! I think this a great day to reflect upon how personal finance and patriotism is so intertwined in America. So I dug up a few tidbits from American history and summarized them here.

Before 1776

"No taxation without representation" is an iconic slogan that points to one of the main reasons why the American colonists sought independence from Britain more than 200 years ago. Simply put, the Americans were angry that their personal incomes was being taken without their consent. The first direct British tax on American colonists was spelt out in the Stamp Act of 1765, a law that required every newspaper, pamphlet, and other legal documents to have a British stamp upon it. Since the stamp costs money, it sparked outrage amongst the Americans because they had no need for this stamp and they did not want to pay for it. The Stamp Act was repealed in 1766, but the later Townshend Acts imposed more taxes on many other goods, including tea. These new taxes led to more unrest amongst the colonists and British troops being sent to America. Eventually, the anger over the taxes led to the Boston Tea Party, and in response to this unrest the British Empire passed the Intolerable Acts which spurred the growth of the American Revolution and eventually led to the Revolutionary War. With this history, it can be argued that the American Revolution was all about the freedom of personal finances. The Americans wanted the freedom to spend their own money how they wanted, and do business without being unjustly taxed.

The Great Depression

The Social Security Administration was formed in the midst of The Great Depression by Franklin D. Roosevelt. In a famous speech now known as "The Four Freedoms" speech , he said this, "I have called for personal sacrifice, and I am assured of the willingness of almost all Americans to respond to that call. A part of the sacrifice means the payment of more money in taxes. No person should try, or be allowed to get rich out of the program, and the principle of tax payments in accordance with ability to pay should be constantly before our eyes to guide our legislation... If the Congress maintains these principles the voters, putting patriotism ahead pocketbooks, will give you their applause." The basic message was that if people did not want to participate in the Social Security program they would be unpatriotic. Roosevelt also outlawed the ownership of gold by private citizens except in jewelry, and basically allowed banks to print as many bank notes as they want without having to redeem it for gold.

World War II

During World War II, the general message was for Americans to be frugal with their money and support the war effort. A Disney propaganda cartoon called "The Spirit of '43" showed the good side as a thrifty and hardworking Donald Duck who paid his taxes, and the film explained that if you did not pay your taxes a good soldier out there would die. The propaganda message was that if you spent your money you would be helping the Axis powers and if you saved your money for taxes you would be helping your country. Many war bonds posters were also made to encourage people to invest in the war effort. In the present day, many of these colorful posters have become collectibles.

Now

After World War II, consumerism somehow became synonymous with patriotism in America. Americans are systematically encouraged to spend their money. In the fifties and throughout the era of the Cold War Americans were told to spend in order to be as different from communists as possible. After the Cold War, consumerism is already a big part of America's GDP. After the September 11 attacks in New York, the country slid into a recession and many companies created ads that linked spending money to helping America. Additionally, the Federal Reserve made it cheap to borrow money to encourage spending. Recently, homeownership was also touted as a way to fight terrorism and keep our country secure. This year, nearly every tax paying American is receiving a "stimulus check" that they are expected to spend to give a boost to the economy. President Bush said in a speech in February that "the purpose is to encourage our consumers. The purpose is to give them money …Consumerism is a significant part of our GDP growth, and we want to sustain the American consumer, encourage the American consumer…". The dominant message out there is that if you want to help your country, you must take out your pocketbooks and spend like there is no tomorrow.

I realize that this is a extremely abbreviated collection of American history, but I think it is interesting how the idea of patriotism affects the personal financial decisions of Americans. There is also a stark contrast to how taxes is viewed in the different eras of American history. At first it was a sign of oppression, but eventually it became a symbol of power, freedom, and patriotism. I feel that the current state of promoting rampant consumerism as patriotism is a bit irrational, but I guess propaganda always appeal to the emotion and not reason.

I know that some Americans also show patriotism by only purchasing items made in America, or refuse to travel abroad. Do you show your patriotism with your pocketbook? If so, how do you go about it?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Jettison the Junk: Why Clutter Clouds Your Mind and Saps Your Energy

Andrea Karim — Tue, 07 Aug 2007 23:54:15 +0000

There's a man who lives down the street from me who's a big fan of dumpster diving. And by "fan", I mean, that's all he does. His backyard is a sea of garbage. He has 30 broken refrigerators on his giant back porch. His truck, which is parked in front of my house, is overflowing with discarded junk like broken baby strollers, cardboard boxes, paving stones, and dried out cans of paint. (See also: Clutter-Free: The Zero-Accumulation Household)

To my knowledge, Dumpster Dan is not employed, and probably not eating well. He's impoverished. Yet he has all this crap lying around. Which is partly why I was so delighted to read the first sentence of Paul Graham's July 2007 essay about stuff:

I have too much stuff. Most people in America do. In fact, the poorer people are, the more stuff they seem to have. Hardly anyone is so poor that they can't afford a front yard full of old cars.

Oooh! Snap!

And also an interesting point — in the same way that the poorest Americans are also the fattest Americans, the poorest Americans still accumulate a whole lot of junk. As Graham says, "Stuff has gotten a lot cheaper, but our attitudes toward it haven't changed correspondingly. We overvalue stuff."

When Less Is More

I've only recently become enamored over the joys of having less. Buying less, owning less, and wanting less. I'm not a zen master of simple living, not by a long shot. And I came by the joy almost on accident.

A friend of mine was planning a visit to my house and was bringing her one-year-old daughter along. In a slight panic, I ran around my home, attempting to 'baby-proof' the entire thing. Papers were shredded, junk discarded, floors mopped and swept, heavy vases hidden away in tall, locked cabinets.

After looking around, I suddenly realized how WONDERFUL my house looked. It was downright beautiful. Looking around a spic-and-span room relaxed me. Coming home, opening the door and being greeted by the sight of an organized kitchen made me feel truly at home.

That's why I'm loving Paul Graham's essay about having too much stuff (via Unclutterer). In between Fight Club-esque moments of "your stuff owns you", he says:

And unless you're extremely organized, a house full of stuff can be very depressing. A cluttered room saps one's spirits. One reason, obviously, is that there's less room for people in a room full of stuff. But there's more going on than that. I think humans constantly scan their environment to build a mental model of what's around them. And the harder a scene is to parse, the less energy you have left for conscious thoughts. A cluttered room is literally exhausting.

So, so true. Frustrations are multiplied when you don't have a clean, empty space to rest your eyes upon. Not only are piles of junk mentally jarring, but they remind you of how much work you still have left to do — sorting, organizing, and storing the stuff.

A sink full of dirty dishes from three days ago isn't just unpleasant to look at — it reminds you that you have to do the dishes. And that you haven't had time to do the dishes for three days. THAT'S exhausting.

"Bargain" is Not French for "Free"

I'm delighted that Graham touches on one of the insane aspects of our culture, which is accumulating more stuff when we don't need it just because it's free, and having more stuff makes us feel richer:

That was a big problem for me when I had no money. I felt poor, and stuff seemed valuable, so almost instinctively I accumulated it. Friends would leave something behind when they moved, or I'd see something as I was walking down the street on trash night (beware of anything you find yourself describing as "perfectly good"), or I'd find something in almost new condition for a tenth its retail price at a garage sale. And pow, more stuff. In fact these free or nearly free things weren't bargains, because they were worth even less than they cost. Most of the stuff I accumulated was worthless, because I didn't need it.

I'm frequently tempted to buy things that can be resold with a little fixing. You know, lovely old dressers that need a new coat of paint. Clothing that can be made "hip" again with a few tucks here and there. But the truth is, I don't have the time or the space to handle projects like these. If I had my own workshop and a flexible job, I'd jump at the chance to restore antiques or resell clothing.

But I have to accept the fact that my time and my living space are very limited. Remember, free or almost free stuff is only a great deal if you (a) use it, or (b) have the time, space, and energy to restore it and sell it for profit.

How to Stop? Don't Start

Simply getting rid of stuff isn't going to keep your life junk-free. Part of the trick in eliminating junk in your life is to refrain from accumulating more stuff you don't need and can't afford. As Graham writes,

The really painful thing to recall is not just that I accumulated all this useless stuff, but that I often spent money I desperately needed on stuff that I didn't. Why would I do that? Because the people whose job is to sell you stuff are really, really good at it. The average 25-year-old is no match for companies that have spent years figuring out how to get you to spend money on stuff. They make the experience of buying stuff so pleasant that "shopping" becomes a leisure activity.

Anyone who has ever spent $67 on a bottle of shampoo and some organic fruit at Whole Foods understands this sentiment. Shopping is a way to spend a Sunday afternoon, right? It's so pleasant, so breezy, so self-affirming.

Shopping centers know this. All of the malls in my area are undergoing major renovations, making them more attractive places to hang out in. The University Village, which is near the University of Washington but packed with stores that students are too poor to shop in, has been wildly successful in turning an ugly, rundown strip mall into a lovely and appealing shopping destination. Replete with playgrounds, fountains, lovely landscaping, outdoor seating — you could spend an entire day in the Village and not be lacking in any services or products.

That's a dangerous situation for me. The longer I linger, the more I want to spend. So I've learned to avoid langurous afternoons in the Village.

Self-Interrogation

In his essay, Graham discusses some of the tactics that he uses to keep himself from buying stuff that he doesn't need:

[A]sk yourself, before buying something, "is this going to make my life noticeably better? [W]ill this be something I use constantly? Or is it just something nice? Or worse still, a mere bargain?

Here's what I ask myself before buying something that I don't really NEED:

Is this going to help me achieve any of my goals? (Running shoes, yes; lip plumper, no.)
Which of my friends will be impressed by, or envious of, this item? If all of those friends would be disinterested in this item, would I still want it?

Those questions help me mentally suss out the motivations behind my desire for an object. Peer pressure can be a powerful thing, and I try to use it for the forces of good rather than evil. If I imagine that all of my friends disapprove of a shiny new iPhone, I can offer myself a more unbiased opinion about my own feelings regarding my desire for one. If I bought this, and everyone hated it, would I still think it was a great purchase?

That's how I avoided purchasing: a fast motorcycle, lip injections, and a tattoo on my forearm.

As I slowly work towards a less cluttered life, I'm constantly realizing how empowering it is to have less. Of course, this is the opposite of what we are told by advertisers; we are led to believe that only owning things will give us a feeling of power. It's almost jolting to discover what a lie that is, even if I've proclaimed all my life that I understood the falsehoods behind the marketing.

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This article is from Andrea Karim of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: