Tuesday, February 12, 2008

Don't Be Afraid to Spend It!!

The talk of the town seems to be divided between Britney Spears and what you should be doing with your rebate check from the US Treasury. Since the talented Ms. Spears doesn’t listen to me let’s focus on the check.

By way of history, our economy has slowed down considerably over the last six months. Perhaps it is the years of high oil prices, high food prices and relatively stagnant wages catching up or maybe it is the gloom over the sub-prime mortgage mess coupled with falling house values and the schizophrenic market that is affecting the consumer. Something has and the Government has decided to take action to give a jolt back into the economy, and that jolt is the cumulative effect of taxpayers spending “free money” from the Government. The House of Representatives, the Senate and the President have all agreed that this is the policy that they want to employ. At this point in time the debate is over as to whether it is a good policy or not, it is THE policy and now the goal is to make it work.

That simple belief is one reason why I advocate spending. Now I know that my clients are all fiscally responsible but how about the person who isn’t and is facing foreclosure? The answer is obvious, use the rebate to help keep the house!

I was reading Suze Orman’s column and she advocates that you don’t spend it. Her advice is to pay down debt or invest it. In five years that check could be double! Her column reminds me of an advertisement where the annuity company points out that if you didn’t buy that expensive wrist watch now you could have an extra $323,765 in retirement, give or take. Now I truly regret buying Karen Becker a hamburger and milk shake 48 years ago. While the afternoon was enjoyable, I realize that I was depriving myself of future security. I digress.

Go out and spend the rebate money on something you need or want. Spend CASH. Do as the Government wants. Give their plan a chance of success. If you truly believe that the idea of the rebates is wrong and will not help the economy then void the check and mail it back.

I am not sure how successful the rebate plan will be however I do know that if we just put the money away and not use it for current consumption then the plan will fail.

The time for debate has passed and now let us play the game.


Anonymous said...

Apologize to Lesley Gore instead.

Morris Armstrong CFP, ChFC, CDFA, AIF, EA said...

I did and thank you!