No Surprises At The 1999 Financial Derby

SPENDING wins "going away", SAVING a distant last.

by Mike Farley

There were smirks aplenty after the running of the 1999 Financial Derby. Cheered on by 97% of the adult population SPENDING solidified his place as the economy's darling.

SPENDING's trainer, the legendary Ban K. Rupt, described his strategy for the classic confrontation. "Prior to the race we were highly stimulated by the ongoing strong economy and low interest rates. It was an easy decision to continue to spend more than we were making because there was no apparent, short-term risk associated with this approach. We felt we could always make up the deficit at a later time."

Interviewed just before post-time, Mike (Belt & Suspenders) Farley, long-time trainer of SAVING, indicated that a sound strategy of saving 10% of earned income would be his game plan for the race -- leaving plenty in reserve for the stretch run.

As the powerful thoroughbreds broke from the gate SPENDING took the early lead fueled by the upward-spiraling stock market. SAVING stayed just a half-length back -- content that his fully-funded tax deferred retirement plan would provide the answer on this memorable day.

As they rounded the first turn and entered the back-stretch -- SPENDING's lead increased when he was able to negotiate a new 125% , loan-to-value, first mortgage on his residence. But SAVING's spirit was bouyed when he learned of an Orthodontist and his wife who, previously not being able to establish any liquidity, had began to "sweep" $1,000 a week into a money market account -- instead of frittering it away.

Moving into the far turn SAVING began to make his move -- encouraged by three General Dentists who had each started a Rainy Day Fund -- and the knowledge that SPENDING was now burdened with information that the current "hot economy" was being fueled, primarily, by the high-earners who were purchasing durable goods that they didn't even need! But SPENDING, spurred on by visions of sugarplums and a new 26' cabin cruiser (10 yrs; 15.9% interest) sustained the furious pace.

As they entered the homestretch it became apparent that SPENDING had used up all of his cash-flow and was beginning to fall back. But sensing this, the crowd roared frantically -- reminding SPENDING that there was still an unused $8,000 on his MasterCard. Reinvigorated, SPENDING padded his lengthy lead. SAVING, now burdened with the news (U.S. NEWS AND WORLD REPORT) that Americans had spent 101% of their "sweat of the brow" income during 1998, broke stride and fell out of contention.

As SPENDING crossed the finish line the ecstatic crowd hoisted Ban K. onto their shoulders and ran off to a sneak preview of the new BMW M5 ($70,000+.)

As dusk settled on the deserted racetrack, Mike F. slowly walked away -- pondering the disaster wrought on Dentistry by the severe economic downturn of 1979-83 -- and humming the old Peter, Paul and Mary tune "When Will They Ever Learn."