The first time I felt the impact of big bucks was in my youth, while window shopping at the old J.C. Penney store in Las Vegas, exactly where Beall\u00e2\u20ac\u2122s operates now.<\/p>\n
I had been selling newspapers downtown and ran in to a fifth-grade classmate who I thought to be the richest kid in town. We began talking about finances. I\u00e2\u20ac\u2122d been proud of having opened my own passbook-savings account, at the First National Bank, and, solely through sales of Optics, I\u00e2\u20ac\u2122d built up a nest egg of about $7.<\/p>\n
The incentive to save was great. At the time, one could request a bank book \u00e2\u20ac\u201d literally. That handsome bank looked exactly like a hardback book. A slot on top was for coins, another in back for dollar bills, which I seldom saw.<\/p>\n
I liked the thrill of taking my full bank book to one of the tellers, Charles Keyes, who used a bank-kept key to unlock the treasure and even counted the coins, deposited them and returned the book.<\/p>\n
It really was a great experience, seeing my savings account grow each week.<\/p>\n
But once, I left the bank with hurt feelings when the teller shook my bank, surmised it wasn\u00e2\u20ac\u2122t worth counting and suggested I come back when I really had something to deposit. I\u00e2\u20ac\u2122d placed a 50-cent piece in my bank and assumed the ritual of watching someone count my cash would somehow radically increase the balance.<\/p>\n
I told my classmate about the experience, and in the vein of not being an egoist, I asked him if he too had a savings account. \u00e2\u20ac\u0153Yeah, I\u00e2\u20ac\u2122ve got a couple of thousand in one bank.\u00e2\u20ac\u009d Geez, if that\u00e2\u20ac\u2122s what he has in one bank, what does he have in the others? He showed me. We went to the same bank, where he fished out a five-dollar bill to deposit, got the passbook and showed me the balance, closer to $2,600.<\/p>\n
As impressive as the balance was, all I could think of at the time was the amount of annual interest. Let\u00e2\u20ac\u2122s see . . . the interest rate at the time was 2 percent. I did some quick math and realized that each year my classmate would earn $52, much more than my total amount. He impressed me as one who gave more in tips than I earned. And the money he deposited that day, to provide an excuse to see and show off his passbook, was far more than I could deposit in two months.<\/p>\n
In those days of minimal inflation, $52 represented a real profit. Nowadays, interest is merely a partial hedge against inflation.<\/p>\n
Well, what could a dollar buy in those days? One could eat at a downtown restaurant, main course, drinks, dessert, for about a buck. That amount would easily purchase five gallons of gas. Tuition at my school, Immaculate Conception, was $45 a year, or about a dollar a week. That was less than what my classmate earned in interest. And if we could string a thousand of those dollar bills together, that would buy a good new car.<\/p>\n
\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0 \u00e2\u20ac\u00a2\u00e2\u20ac\u00a2\u00e2\u20ac\u00a2<\/p>\n
But enough of the greatly-influenced-by-inflation comparisons. I\u00e2\u20ac\u2122m trying to determine what kind of clobbering many of us received through the recent stock market crash.<\/p>\n
It amazes me that members of Congress were practically high-fiving one another after passing the $700 billion \u00e2\u20ac\u0153bailout\u00e2\u20ac\u009d of the industry. Well, Mr. and Ms. Congressperson, did you have to be so generous with our money? If a mom-and-pop operation in Las Vegas runs into trouble, will Uncle Sam bail it out too?<\/p>\n
Like a person passing an accident who at once wants to look and not look, I cracked open some of my own financial records, something I almost never do.<\/p>\n
The first disclosure is that my portfolio, created through 25 years of investing in annuities, once was in the very low six figures, but for the past several years it\u00e2\u20ac\u2122s been in the high five figures. Yesterday\u00e2\u20ac\u2122s conversation with my financial adviser showed that my account is $30,000 poorer than it was several months ago. Yes, I realize $30,000 barely buys a car anymore, and $30,000 would have made even my I.C. classmate quite comfortable, back in 1950. But the beating many of us took this year really hurts.<\/p>\n
First, Congress used our money to rescue financial institutions across the country, and at the same time, our savings have been raided. So we pay twice. Thanks!<\/p>\n
One of the axioms in the financial world, when someone\u00e2\u20ac\u2122s portfolio begins to shrink, is that \u00e2\u20ac\u0153It\u00e2\u20ac\u2122s only on paper.\u00e2\u20ac\u009d Those who say that also believe \u00e2\u20ac\u0153It\u00e2\u20ac\u2122ll bounce back before you know it.\u00e2\u20ac\u009d<\/p>\n
Oh yeah?<\/p>\n
Here\u00e2\u20ac\u2122s the rub for us seniors: When annuitants reach 70-and-a-half years of age, they\u00e2\u20ac\u2122re required to begin withdrawing portions of the funds. So exactly a year from now, when I turn 70-plus, I\u00e2\u20ac\u2122ll need to do just that, even though the funds will not have had sufficient time to bounce back.<\/p>\n
My friend and neighbor Grover Durham loaned me a book, \u00e2\u20ac\u0153Whose Rose Garden is it Anyway?\u00e2\u20ac\u009d by Art Buchwald. \u00e2\u20ac\u0153You\u00e2\u20ac\u2122ve gotta read the chapter on Savings and Loans,\u00e2\u20ac\u009d Durham said. And although the book carries a 1988 copyright date, the ideas apply today. Buchwald, who died almost two years ago, must have been prophetic.<\/p>\n
He wrote about S&L representatives knocking on people\u00e2\u20ac\u2122s doors and demanding $25,000 from every member, to bail out the beleaguered industry. Buchwald wrote that even if people protested that they didn\u00e2\u20ac\u2122t even have a loan with the S&L, they weren\u00e2\u20ac\u2122t absolved from the financial obligation.<\/p>\n
And when people asked if those who made the bad loans had been fired, the reply would be, \u00e2\u20ac\u0153It\u00e2\u20ac\u2122s too late to punish anyone. When a savings and loan goes bankrupt, we don\u00e2\u20ac\u2122t believe in taking it out on management.\u00e2\u20ac\u009d<\/p>\n
Accordingly, the CEOs responsible for the stock market crash in September got bailed out and got issued golden parachutes. One company spent more than $1 million to celebrate the bailout. And we pay for it \u00e2\u20ac\u201d twice.<\/p>\n
The loss my portfolio incurred corresponds to the mythical $25,000 to bail out the S&Ls.<\/p>\n
In fact, we could almost say I gave at the office \u00e2\u20ac\u201d and threw in a whopping tip.<\/p>\n","protected":false},"excerpt":{"rendered":"
The first time I felt the impact of big bucks was in my youth, while window shopping at the old J.C. Penney store in Las Vegas, exactly where Beall\u00e2\u20ac\u2122s operates now. I had been selling newspapers downtown and ran in to a fifth-grade classmate who I thought to be the richest kid in town. We […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=\/wp\/v2\/posts\/298"}],"collection":[{"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=298"}],"version-history":[{"count":0,"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=\/wp\/v2\/posts\/298\/revisions"}],"wp:attachment":[{"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=298"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rezio.net\/woa\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}