Future Spending

A number of years ago, I attended a conference where the keynote speaker was futurist and author Alvin Toffler, whose ground-breaking 1970 tome “Future Shock,” chronicled the rapid acceleration of structural changes in society, specifically how America was evolving from industrial to “super-industrial." He threw out to attendees several then-unfamiliar terms (at least to yours truly) such as "digital revolution" and "knowledge workers."

In a brief interview afterwards, he broke it down in terms simple enough that even I could understand, as how technology and the knowledge revolution were ultimately transforming us.

“Bill if you own one share of McDonald’s, you own fractions of the buildings, equipment and even the hamburger buns. However, if you own one share of Microsoft, 90 percent of what you own is the employees’ knowledge.”

But as with almost every breakthrough comes the law of unintended consequences.

Apparently, part of this wave includes the consumer masses forgoing prudent savings in lieu of spending money on digital products like sailors on shore leave. Well almost.

In conjunction with National Financial Literacy Month, the AICPA and Harris Interactive showed that the average digital subscriber spent an average of $166 a month for services such as cable TV, Internet, satellite radio and streaming video. According to the Institute, that comprises about 17 percent of the national average for the monthly rent or mortgage check (Somehow I don’t think the pollsters were privy to my house payment stubs). For those who frequently download songs, you can tack on an additional $38 month.

Apparently, the allure of the latest smartphone or tablet outweighs that of an IRA or variable annuity. The AICA/Harris survey found that 56 percent of Americans believe that technology has made it easier to spend money and just 3 percent indicated it has made it easier to save.

At Chez Carlino, where I’m frequently threatened with eviction if all family members aren’t carrying iPhones like sidearms, or in my offspring’s strange perception of austerity, we’re subscribed to just 10 HBO channels instead of the 125 or so offered, I can surely attest to this skewed spending priority.

Like it or not, the digital revolution isn’t going anywhere, and obviously, neither is my retirement portfolio.

If I can just find that manual Smith-Corona typewriter, maybe we can start saving again.