Save What?

One of the nation’s foremost economists sums up our woes:

America has a terrible saving problem and a slumping economy. But our national mantra, underscored by last week’s payroll-tax cut, is spend, spend, spend.

Yet, countries can’t spend their way to prosperity. This demand-side voodoo-economics approach is driving us further into hock. The right mantra should be save, save, save.

~Laurence Kotlikoff, on Bloomberg.com

The remainder of his article discusses the virtue of saving, the theory behind his assertion and statistics to back it up.  But let’s just remove the “save, save, save” for a moment and talk about those who can’t even do that because they’re not making enough money.

Is your business flush with cash?  Do you have reserves allocated to foreseeable and unforeseeable outlays?  Or are you “growing” on credit, hoping to score some future jackpot?

The road to success is littered with the bankrupt, out-of-business fools who spent more than they earned.  Who failed to produce in sufficient volume to outrun any Big Bad Economy.

Decide where you want to end up: the sidelines, or the Top (the bottom is too horrid to think about).  Work out what it is that your company does best.  (That could mean it’s your best service or item, or that you do it better than anyone else.)  Once you’ve got that figured out, calculate your income requirements to blow away any debt and start creating a retirement.  If you need a million dollars to make it through the year, work out how you’re going to produce five million in goods or services, how you’re going to market and sell them.

Then Do It.  You’ll wind up with something new to worry about: “What am I going to do with all this money???