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Hugh R's Avatar
 
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WTF is up with people who don't put money away?

I'm 57 y/o and if I got laid off tomorrow I could live OK for the rest of my life with, or without SS. With SS would be a bit nicer. I know so many people my age who have put away NOTHING. I have 3 families on my street out of 25 homes (HOA) who can't pay the HOA dues. Yet they have the jet skis, jet boats, RVs. I just don't get it. I've saved with 401K, IRAs since I graduated from college in 1979. I've read that the "average" savings of individuals outside of pensions and what others have put aside is only a few thousand. So I'm expected in the future to be "means tested" for SS. The message is if you don't save, someone will cover your ass, who did save.
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Old 02-15-2011, 07:55 PM
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Old 02-15-2011, 07:55 PM
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Old 02-15-2011, 08:03 PM
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Unfortunately, most people make less than they need.

I have NEVER had any type of savings...Ever.

I don't have a lot of things and tend not to waste money ( movies, dinner, trips, clothes )
I have no car payments or debt and we maintain low monthly expenses/rent.

Fact is, for most of us, we're in BIG TROUBLE.

I don't own a home and cannot afford health insurance.

And, compared to 4/5th's of the world's population, I'm stinking rich...

Oh and then there's the time when money has no value, anyway.
Then what?


KT
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Old 02-15-2011, 10:25 PM
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savings is not part of US culture
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Old 02-16-2011, 12:43 AM
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All of the above is true but I'd add that the notion of "paying oneself first" is lost on most Americans growing up. I ALWAYS do this - I even did it while unemployed and drawing UI. 10% minimum comes right off the top and goes into savings - I then figure out how to get everything else paid with the remaining 90%. Unfortunately sometimes unforeseen things do come up requiring those savings to get tapped from time to time (most recently it's dental work I need...) but at least it's there and the discipline to do it is established.

I also don't think a lot of folks realize just how devastating unemployment is... It's not just losing an income - it's losing health care (COBRA is a joke and a rip-off), it's losing self-respect and self-worth, it's losing direction and purpose and it's DEFINITELY losing the ability to meaningfully save for the future. When one considers the loss of compounding interest effect/benefit, this "unseen" loss is enormous.

In my case I did sell off a lot of stuff (usually at significant losses) and had to wipe out my entire savings and 401k just to pay rent/utilities/student loan and a car payment for a year out of work - on top of the cost of running around hunting for a new job (driving, phone service, plane tickets, hotels, etc). It all takes money - unfortunately it can cost a lot to find/land a replacement job even if you're frugal.

I think this is the situation a lot of folks are in - they're out of work and if they're lucky their UI hasn't run out, which might cover their housing. Everything else (utilities, job search expenses, any relocation costs, etc.) all have to come from someplace else... That "somewhere else" is often in liquidation of assets, plundering savings and/or using credit lines. I know this all too well as I went through all the internal debates about all these myself. I got lucky. I'm rebuilding (slowly) but am still nowhere near pre-2008 levels and won't be for several more years - and that's assuming nothing else bad happens in the meantime.

Many more are not so lucky.

It's easy to look down one's nose and say "well you should have planned better", but I find that only holds so much water and is ultimately the position used as a refuge by those too lazy to defend their inherently heartless and callous/spiteful natures (not directed at anyone in particular here, just a generalized observation).

There IS such a thing as being a victim of circumstances beyond (or mostly beyond) one's control. Unfortunately in our society today EVERYONE likes to paint themselves as the victim rather than taking responsibility (even if its partial) for the consequences of their actions/inactions so it's played out and encourages others to adopt the rather heartless and cold positions they do - because they're sick of hearing the whining from everyone and anyone about everything and how it's ALWAYS someone else's fault.

The reality as I reflect on what happened to me is that a lot of it really was beyond by control, but not entirely. There are some things I could have done differently and/or better to help prepare better and avoid the extent of the damage I suffered. I've adapted accordingly and am trying to make the most of my "new lease on life". That's really all I could ask from others in similar predicaments... That they identify the things that WERE within their sphere of influence/control and adjust them going forward to be better positioned for next time. But to simply throw it all on them and say (like some do), "you shoulda earned more and saved more stupid - I ain't helping you one bit and I have no sympathy for you at all" is pretty lazy and disingenuous too.
Old 02-16-2011, 04:29 AM
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The systematic creation of inflation, teamed with the cultivation of an entitlement mentality have destroyed the motivation and ability of most people to save money. Inflation has likewise made the U.S. uncompetitive in manufacturing.

So for many, as soon as they make a few more dollars, they are literally robbed by a system that destroys the buying power of their new-found earnings. It is a vicious cycle that creates enormous wealth for the investment class.

Those that work the system can sometimes ride along, but most will suffer with the feeling that they can never earn enough to simply maintain their standard of living, much less save money on top of that.
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Old 02-16-2011, 04:49 AM
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In ten years it's going to be hard to find a job at Wal Mart. I think that's where these folks are headed And there's alot of them
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Old 02-16-2011, 05:32 AM
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I am 40 years old and I have managed to save ~$250k for retirement so far. That is not a lot, and could be wiped out by another crash of the stock market. I started working late in the US at 29. Had nothing saved before that, but the nice part is I did not have student loan to repay either.
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Old 02-16-2011, 05:53 AM
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Gotta save it when you can and pay things off before retirement, if ya make it that far! I'm blessed to be down to taxes & utilities. No bills,no car payments. What little I have is paid for. With prices going higher every day for everything, any "extra" reserve goes down every day.
We're a long way from a turnaround if it ever comes! My best advice is to stay frugal regardless of income or station of life. Hang tough kids!
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Old 02-16-2011, 05:59 AM
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Way too busy spending the money on booze, girls and fast cars and the rest I just squandered !!!!

Lets say well.....I like it like that.......
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Old 02-16-2011, 06:00 AM
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I have always been a saver, I think some of it has to do with my family. My Grandfather and Father were big savers. I have friends that live very well, but put nothing away. I guess they want to appear wealthier than they really are. I quit working when I was 50, I'll be 54 in May and I'm worth more now than I did in 2007. I understand that some don't have the ability to save as much as others, but I have a hard time believing that most cant save something. Everyone makes choices, some good, some bad.

I may have passed on a few toy's over the years, or more likely just delayed getting something that I wanted until I could pay for it. But it sure is paying off now. And we need all those who live beyond their means to keep working till they drop. We need those wage slaves to keep toiling along and paying into Social Security and buying all that junk that make our stock prices climb.

And look at all the bargains that they give us when they miss a paycheck and have to start selling their toys.
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Old 02-16-2011, 06:14 AM
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It's way worse than you all are thinkin'. Almost everyone, and I mean 99+%, think in terms of dollars. The problems we have at this moment are monetary. The days of blaming it all on bad policy, spendthriftiness, poor planning, etc., ARE OVER. When it all comes crashing down, it will be because the dollar went to zero. The paper you all are holdin', including dollar bills, will be used to start fires to stay warm.
Old 02-16-2011, 06:22 AM
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I understand living on the edge, I've been their, which is why I live well within my means. I'm talking about the three families on my HOA street of 25 homes who are months behind in dues. Boats, newer Escalades/Surburbans, jet skis, five and six vehicles. One works in the Biz as a screen writer (should know better, he's only as good as the last script he got picked up), a commercial RE agent (he should know better than anyone).
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Old 02-16-2011, 06:24 AM
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Old 02-16-2011, 06:26 AM
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Quote:
Originally Posted by trekkor View Post
Unfortunately, most people make less than they need.I have NEVER had any type of savings...Ever.

I don't have a lot of things and tend not to waste money ( movies, dinner, trips, clothes )
I have no car payments or debt and we maintain low monthly expenses/rent.

Fact is, for most of us, we're in BIG TROUBLE.

I don't own a home and cannot afford health insurance.

And, compared to 4/5th's of the world's population, I'm stinking rich...

Oh and then there's the time when money has no value, anyway.
Then what?

KT
I don't think people "make less than they need" They make less than they spend. The US mentality isnt to save it is to spend. Get a new car every few years, name brand clothes, jetski's, vacations, etc, etc, etc. That's why we have they credit problem in this country we have. American's don't ask "how much does it cost?" the question is " how much down and what's the monthly payment?" Personally I don't buy much on credit. If I can not buy it cash I don't buy it. I generaly buy cars off lease and keep them untill they die. My current daily driver is a 99 Acura SLX.

Back to your question HughR- I do have a Savings account, a Roth IRA and some stocks (there not my strong point so I tend to shy away from them). Most of my long term planning was directed toward my businesses and real estate. Most of my real estate holdings are commercial with leased space, owned free and clear and was purchased before or early in the boom. While value is down it's not far off of the purchase and cash flow is still present. I also have a Real Estate office that as you can imagine isnt setting the world on fire right now either but is paying the bills.

My cash cow is my insurance office. I am 46, 3 years ago I had to move more then an hour and a half from my office in order to finalise a custody agreement that took four years and an upper 5 figure cost. As a result I go on "workation" to my office in the winter months. I commute two or three times per month to the office and back the same day. In summer when my daughter is out of school and we can go back home I work more often and go in two or three times per week. Lastly, I have never collected unemployment and I don't even think about SS if i get it, I get it If I don't I don't. I am cetanly not going to depend on it
Old 02-16-2011, 06:27 AM
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Part of the problem is that M-TV (and the M-TV mentality) is teaching our kids. You're nothing if you don't have 22's, air jordans, and an IPhone. Cribs shows you what you can have if you just go out and buy it. The majority of the world has gotten drunk on credit, which leaves very little for saving.

That said, I put into my 401k for the last 25 years. I started small (around 1-2%) and I increased the percentage every year when I got a raise and have been at 20% for a long time. Two years ago, I left the corporate life and am now self employed - I still save but it's a lot harder to take it to the bank than it was having it taken from my check.
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Old 02-16-2011, 06:27 AM
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Tabs is behind the curve, he still thinks in dollars. Tabs still thinks in terms of structured societies. I have said many times, I hope (but now I pray) that I am wrong. Our only hope right now is to STOP. Freeze everything. Bail out on the wars, reduce spending across the board by a minimum 20%. Tear up the treaties, drill the schlit out of the gulf. What will happen is apocalyptic. It is global. The wonks in DC are talking in 100's of billions. Don't you get it? The problems are in MULTIPLES OF TRILLIONS. A trillion of anything is incomprehensible. A trillion dollars is outright fantasy, it's imaginary, it's meaningless. And that is just in the US.
Old 02-16-2011, 06:38 AM
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Quote:
Originally Posted by Hugh R View Post
I'm 57 y/o and if I got laid off tomorrow I could live OK for the rest of my life with, or without SS. With SS would be a bit nicer. I know so many people my age who have put away NOTHING. I have 3 families on my street out of 25 homes (HOA) who can't pay the HOA dues. Yet they have the jet skis, jet boats, RVs. I just don't get it. I've saved with 401K, IRAs since I graduated from college in 1979. I've read that the "average" savings of individuals outside of pensions and what others have put aside is only a few thousand. So I'm expected in the future to be "means tested" for SS. The message is if you don't save, someone will cover your ass, who did save.
I think that means testing is pretty darn wrong - however taxing SS if you have additional income - that seems sensible.

I have saved too Hugh - and who knows what will come of SS. A good idea has become a flawed plan.

Forced retirement savings isn't a bad idea - those 'idiots' on your street that have the jet skis and other toys at least have been paying into the 'till' for a while. Without the 'forced' nature of SS they would have just been taking that additional money and been buying another boat... They certainly wouldn't have been saving for retirement. And when retirement came - the government would have been supporting them anyway - we, as a society, aren't going to let our old become destitute. So - either way you would have been covering their 'asses'. At least this way, with SS, they have had to cover some of that same 'ass'.

It does need to be overhauled - I certainly think that individual accounts would be a good way to start. I read a great article a few years ago that addressed this - having 'levels' that change depending on the amount you have put into the account. There is a minimum level that needs to be reached, which would be what you could 'barely' live on when you retired, and that amount would be in a government system, and revert back to the government if any remained when you died. Beyond that - there would be levels where you had more control over the investments, but some would always go into the government system. It would still be 'forced' investments however, but with a chance of perhaps a better rate of return - or the equal chance of losing money, but the 'core' of your retirement would remain untouched until you retired.

There are a lot of other things too - the age has to be bumped up, the idea it is a catch all for children and spouses... that sort of stuff needs to be closely reviewed, and changed. Those would also be easier to address if individual accounts were set up.

SS was created because there was a need - society was becoming older, and the traditional means of caring for them (churches and families) were becoming overwhelmed with the costs. It hasn't kept up with the times, and it is yet another one of the 'entitlements' that need to be overhauled soon. Keeping track of individual accounts would have been a nightmare when SS was set up - but now, it is easy - we all get our statements every year - it can become more of a 401K, and less a government sink hole. But it needs to remain 'forced', unfortunately. I don't particularly like the idea, but the fact that if it weren't, there would be millions of people that wouldn't be saving a dime for their retirement, and eventually, I would be paying for them anyway, is even worse.
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Old 02-16-2011, 06:40 AM
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Originally Posted by Crowbob View Post
Tabs is behind the curve, he still thinks in dollars. Tabs still thinks in terms of structured societies. I have said many times, I hope (but now I pray) that I am wrong. Our only hope right now is to STOP. Freeze everything. Bail out on the wars, reduce spending across the board by a minimum 20%. Tear up the treaties, drill the schlit out of the gulf. What will happen is apocalyptic. It is global. The wonks in DC are talking in 100's of billions. Don't you get it? The problems are in MULTIPLES OF TRILLIONS. A trillion of anything is incomprehensible. A trillion dollars is outright fantasy, it's imaginary, it's meaningless. And that is just in the US.
Yeah a trillion dollars it's a crazy number. the 15 richest people in the world only total $451.8 Billion. Imagine that Only and Billion in the same sentence Now that there is funny.

Washington is playing with $100,000,000.00

$1,000,000,000,000.00 Trillion
$ 1,000,000,000.00 Billion
$ 100,000,000.00 100 million

I think I did that right?
Old 02-16-2011, 06:50 AM
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