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How YOUR Saving Advice Caused The Financial Crisis

Once upon a time there was Joe who made living by selling hairdresser’s furnishing. One day Joe started reading personal finance blogs. Until that day he used to spend a lot of money for eating outside, gas, clothes, movies, popcorn, gadgets and his home. The economy of his country was working fine (well, almost).

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But the day he started reading blogs, Joe learned that the way he lived his life was wrong. He learned that he had to save money instead of spending it all. He learned that eating outside was bad, so he started cooking rice and potatoes at home. Because rice and potatoes were the best food. He read that in the blogs. Meat and fruits were not as good because they were expensive. He started wearing his clothes more and buying less new clothes. When he bough any new clothes, they were produced in China, because they were cheaper.

Joe decided not to buy a new house. Instead of that he could live in a van. Vans were cheaper and you could get one without mortgage. Because having a mortgage was bad. He learned that from blogs.

Instead of going to movies Joe stayed at home and played cards. Spending money on movies was not a good investment. He had to save money. He read that in the blogs.

One day a friend of Joe – Sam – lost his job flipping burgers at McDonald’s. His bosses said that more people cook at home, less people eat burgers and there was no more work for Sam. Sam had to limit his expenses as much as he could. One of the many things he had to stop buying was sweets for his children.

Wendy worked in the sweets shop. She was selling home made sweets that she and her sister were making. But not only Sam stopped buying sweets. So did many people who were flipping burgers and also had lost their jobs. The sales went down and down, Wendy and her sister couldn’t pay the rent so they closed their shop. The two sisters had to limit their expenses. One of the many things they stopped doing was to go at the hairdresser’s. So did aunt Barbara – the host of their sweets shop. She had no tenants any longer so she had to limit her expenses too.

Since many other women had to stop doing their hair-style, many hairdresser’s had to close shop. Joe had no more customers to sell his furnishing to. He had to use his saved money to survive. He was very upset, but he read in blogs about the financial crisis and how everything was going bad for everyone.

So it wasn’t his fault. Or was it?

23 Responses to “How YOUR Saving Advice Caused The Financial Crisis”

  1. Mary@SimplyForties Says:

    Oh no, poor Joe. He thought he had it right and then he read in another blog that he was doing it all wrong and had personally caused the financial crises. Now he’ll have to move to the woods and disconnect his Internet because the rest of the country hates him. Poor Joe.

  2. admin Says:

    Nice one!

  3. financial wellness project » festival of frugality #152: affected by recession edition Says:

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  4. Moments of Fame « Funny about Money Says:

    [...] to get on the staff of a popular magazine!). The Shark Investor comments, as I did Monday 11/18, on the new trend to blame the deprecession on frugality. This festival has about a jillion really interesting posts—if I [...]

  5. Coping With The Recession In Silicon Valley Says:

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  6. admin Says:

    Thanks to Pinyo for posting it at

  7. Dangerman Says:


    A negative net savings rate and skyrocketing debt means that Joe’s “spend a lot of money” was spending money he DIDN’T EVEN HAVE. Therefore, the the economy of his country WASN’T working fine at all.

  8. savers caused the financial crisis - Personal Finance Forums Says:

    [...] savers caused the financial crisis This got me steamed.

  9. Harvey Kinko Says:

    Joe should try self-immolation.

  10. Rich Life Carnival #20 | Rich Life Carnival Says:

    [...] Shark Investor presents How YOUR Saving Advice Caused The Financial Crisis posted at The Shark Investor, saying, “Instead of frugality, focus on providing more [...]

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    [...] Savers caused the financial crisis [...]

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    [...] How YOUR Saving Advice Caused The Financial Crisis posted at The Shark Investor. [...]

  13. tim Says:

    Uhhhh….I’m pretty sure McDonald’s has reported a boost in sales as people flock to their value menu and cheap-calorie options. But don’t let those silly “facts” derail your story.

  14. jIM Says:

    The money saved is invested so banks and other institutions can lend it.

    If I save and put money into a 100k CD, my bank can then lend that money out to another person which is willing to take more risk than me. That risk grows the economy and creates opportunity.

    If I send that $100k to vanguard or T rowe price, that broker will invest the money into a company and that company can choose how to use my 100k to further expand its business to
    a) make them more money
    b) eventually makes me more money

  15. Intelligent Speculator » Blog Archive » Investment Talking Says:

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    [...] Shark Investor with How YOUR Saving Advice Caused the Financial Crisis. People always talk about how capitalism makes for a selfish society. An issue that isn’t [...]

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    [...] talks about “How your savings advice caused the financial crisis.”  Very cool, but maybe we just reset what our true spending should [...]

  18. Meg Says:

    How about the people who kept spending because it was “patriotic”. They spend more than they could afford. They got in debt instead of growing their savings.

    Then when things went south (i.e. when gas and other prices went up or their hours were cut at work or they lost their job or they had medical bills to pay), they couldn’t handle the bills anymore and they didn’t have an emergency fund to sustain them through troubled times. So, they went into bankruptcy and/or foreclosure.

    Foreclosures put a strain on the banks and investors, and flooded the market with cheap houses, lowering the value of other homes for sale and hurting the equity of other homes. People who needed to sell their homes couldn’t.

    Bankruptcy also hurt the businesses that they owed money to — businesses that then decided that they were going to be stingier with credit, making it harder for other businesses to take out loans to pay their workers before profits started rolling in. So they fired more people and the cycle continued.

    Meanwhile, Mr. and Mrs. Frugal had an emergency fund because they spent within their means. When Mr. Frugal lost his job, they were able to weather the storm until he found another one. They tightened their purse strings a little until he had a new job lined up, but overall their spending was steady because they were used to counting every penny.

    In fact, they might have even spent a little bit more than usual, taking advantage of genuine bargains and putting some money into the stock market knowing that by the time they need that money again the market will have recovered and they’ll have made more money.

  19. Carnival of Twenty Something Finances - Thanksgiving Hangover Edition — Broke Grad Student Says:

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  20. Jessica Says:

    Yeah, Joe having enough money to not default on his loans during a recession totally did screw the banks. He probably should have taken out a risky loan he couldn’t afford without doing research like his neighbors right?

    I sincerely hope you’re kidding. Pushing consumerism on people is pretty disgusting. Living within their means and not defaulting on debt shouldn’t be cause to make someone feel guilty. It was a lack of personal and corporate responsibility that caused the credit crunch, and a shark investor should be good enough at fiscal math to see that obvious.

    I hope you are kidding. Otherwise I feel quite sorry for you.

  21. Faran Says:

    I liked the story until it became a little stupid, i think the exact part was when he decided to live in his van..
    The potatoes and rice thing was kinda stupid too..

    “the blogs” don’t tell you to live like a hobo, they do tell you to be conscious of your spending and not going to the movies and not eating out are good life strategies, not just a way to save money

  22. admin Says:

    “I sincerely hope you’re kidding.”

    I expected that to be obvious but this is the first comment which is suggesting it. Which probably means it can’t be entirely a joke.

    There is at least one serious thought in the post – I think people should concentrate more on providing value than on frugality.

  23. Money Hacks Carnival #39 : Moolanomy Says:

    [...] How YOUR Saving Advice Caused The Financial Crisis posted at The Shark Investor. [...]

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