The Past, the present, and the future

Last week I commented on Henry Tapper’s post ‘We should be proud to have an opt-out!’ I ended the comment with

Weaning is definitely necessary. Irresponsibility seems to be a bit of a drug when it comes to some of my parent’s generation. Choice and change are part and parcel of a free society, but choice without being informed is like a baby looking at a knife and thinking ‘shiny’  

This post is to elaborate what I meant by that statement. My father came to the UK in 1977 via a commonwealth/federal scholarship. He gained a BSc, MSc, MPhil and an MBA. This is where he met my mother who also gained a HND, BSc and MBA. So some would say I come from intelligent stock. Armed with their education and a USP they decided to start their own business. They were in control of their salary, their future and the future of their young children. At the business’s peak, we could make £6000 in a week and had up to 10 members of staff. We were introduced to many families similar to ours. Strong educated family units who valued loyalty and hard work.

They secured our long term futures by taking out bonds, trusts, life insurance policies and buying property. They had abundant savings.  Everything was always about how they didn’t want us to suffer as they did. They made sure we valued our education, so we would have more options when we grew up and have more financial security than a self employed person.

So how come so many of us, these family units (classified as upper working class maybe?) are now in ‘hard times’? My parents are not stupid, they have been exposed to higher education and so have many of our family friends. They like many others made certain decisions that seemed profitable, or worth the risk at the time. Taking out 100% mortgages, even though they had enough savings to make a deposit. Then there are the loans, credit cards and business accounts that their business manager at their local bank, may or may not have condoned. The local accountants that in order to keep their books afloat, made it appear like theirs were afloat too. Everyone was seduced to living a little or in some cases way above their means.

So my parent’s generation has made quite a few mistakes. What I think is annoying is that nobody wants to accept that however small, everyone is to blame, not just the government and the banks. They do have their part to play in this mess, but what about everyone else? I am sorry, but social responsibility is a two way street. They say charity begins at home, well so should financial education, since money makes the world go round. Understanding the small print, budgeting, knowing the best deals that work for the individual, all this should be part of growing up in a developed society.  Everyone finishes compulsory education with no idea how far their potential salary will stretch and therefore what they can really afford. I was working with a group of year nine students in a school last year and they thought £12,000 per annum was ‘Awesome’.

At the beginning of our ‘hard times’ I decided to take out a credit card to help my parents out. I was a student, but I was working so I thought I could keep up with the repayments. Before I knew it I had two! I wasn’t getting the same wage every month as it was per hour not per month. I was trying to get on with studying, but my mind was filled with minimum payments. I was beginning to fall into the same trap my parents did.

Here you have a financial butterfly effect that is not only ruining the country, but the whole of western civilisation. I hope someone is taking some notes; otherwise history is sure to repeat itself. The next generation will be the ones looking at a knife and thinking ‘shiny’, just like I did with those silly credit cards.  

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