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Date: Sat, 30 Oct 1999 12:14:42 -0600
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Date: Sat, 30 Oct 1999 12:12:16 -0600
From: Jeff Salisbury <jeff.salisbury@xmission.com>
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Subject: Americans are betting on lottery over savings
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Fellow persfin'ers,
It has been a long time since we've seen any activity on our list. I am
planning to make a concerted effort to resurrect our group.
Here is an article on a the attitude of a large segment of Americans
toward savings. I hope none of you feel the same way!
Best Regards,
Jeff Salisbury
==============================
Deseret News
www.desnews.com
Friday, October 29, 1999
Americans are betting on lottery over savings
They don't expect to see $500,000 in lifetime
Associated Press
WASHINGTON -- One-quarter of Americans believe their best chance to
build
wealth for retirement is by playing the lottery, not by patiently
saving and investing, a
survey says. Those living paycheck to paycheck are even more likely to
feel that way.
Misconceptions about how small amounts of money can grow keep
millions of people
from taking the steps that could greatly improve their lot, say
sponsors of the survey
released Thursday -- the Consumer Federation of America and the
financial services firm
Primerica.
"If Americans understood that their chances of winning a big
lottery jackpot were 10
(million) to 20 million to one but that they could accumulate hundreds
of thousands of
dollars through regular saving, more families would put $50 away rather
than spending it
on gambling or unneeded consumption," said Primerica Chairman Joseph
Plumeri.
Invested for 40 years at a 9 percent annual yield, $50 a week would
add up to
$1,026,853.
Stephen Brobeck, the consumer group's executive director, said
banks and brokerage
firms must take some of the blame for the fact that many Americans
don't realize there are
ways to invest profitably even small amounts of money, such as in
savings bonds or mutual
funds.
"I don't think they've done an adequate job in publicizing those
products to the low-
and middle-income households," Brobeck said. "There are decent savings
options out
there for any household."
The poll indicated 28 percent of Americans believe winning a
lottery or sweepstakes
is their "best chance to obtain a half a million dollars or more in
your lifetime."
Among households with annual incomes of $35,000 or less, those
holding that belief
jumped to 40 percent.
Overall, fewer than half -- 47 percent -- of all those surveyed
said saving and
investing some of their income was the most reliable route to wealth.
People were also asked how much $25 invested weekly for 40 years at
a 7 percent
annual yield would amount to. Fewer than a third guessed over $150,000.
The correct
answer is $286,640.
A series of similar questions found that younger and lower-income
Americans, along
with women, tend to most undervalue how savings can add up.
But that $286,640 is still not the half-million dollars the survey
asked about.
"There are a number of households that will have a very difficult
time under any
scenario," Brobeck said. But he noted, "In every income class there are
savers and there
are spenders . . . there are still, even in the lower-income classes, a
minority who save and
accumulate wealth."
The telephone poll of 1,010 Americans 18 and older conducted July
22-25 has an
error margin of plus or minus 3 percentage points.
- -
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