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I have long said that home ownership is crucial for low earners if they are to be able to retire and to pass wealth to their children (if any).
And what kind of market mechanism for low earners is rental housing? Lifetime renting is considerably more expensive than owning, so it seems like precisely the worst financial strategy for low earners.
Dave Ramsey says that "fleasing" is the most expensive way to drive a car. It's also the most expensive way to keep a roof over your head.
way to many variables to make a general statement about costs of housing.
taxes on long island make ownership outragious. cost of labor to fix,repair and maintain can be huge as well.
we no longer want to own a home at all. we are going to contract on our second home we are selling this week and sold our primary about 6 years ago.
Expecting 'magic solutions' is part of the savings problem!
Quote:
Originally Posted by westender
Well, many of us enjoy our working years while we save, as well as we want to enjoy our retirement years. So you save now, enjoy now, and enjoy later.
If you save & die, then you get to designate the cause (spouse, children, charity) that benefits from your thrift.
If you save & live, then you get to enjoy your thrift.
If you do not save, you are at the mercy of a (increasingly) merciless society.
The notion that people who work for 35 years might not save at all for retirement would indicate that they have knowingly locked themselves into a poor outcome. The next few years will see a lot of hand-wringing about these people with no savings. "Forced" to live in slums and among the drugs and criminals, etc. But they are out there in the millions, I've met several recently. Years of opportunities to save, and zero net assets. The 'government' is not going to help, as it's also out of cash.
My suspicion is that a lot of the people reportedly saving 'nothing towards retirement' --- are the same people who are up-to-their-eyeballs in credit-card debt ... and/or facing foreclosure on their houses.
There seems to be a mindset in this country that says, "If I can't afford it today, I can buy it on credit ... and will 'magically' be able to pay for it tomorrow." This same mindset allows people to convince themselves that 'they will 'magically' make-up tomorrow, for what they fail to save today.' Of course, this type of illusion is the substance of advertizing: "You deserve to have it all today!" -- None of these are rational or logical scenarios. They simply feed-into the self-centered desire for 'immediate gratification' (unencumbered with facts or reality!").
Like the government, most people irrationally try to 'manage their savings' without 'managing their spending.' Of course 'saving out of what is left at the end of the month' is doomed to failure. If one wishes to succeed in saving, one must 'pay one's self' (save) first, before paying for everything else. Coincidentally, this is also the fundamental principle of tithing and stewardship. Some things simply have a universal application!
Quote: Originally Posted by freemkt No joke, it's reality. Half are over 25 and half are under 25.
Although workers over age 25 represented about four-fifths of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less.
Comprehension is fundamental.
Unfortunately the very next statement goes on to negate your flipped around sentence. That sentence shows about 3%.
I watched an entire generation run themselves ragged on the im going to retire treadmill. Most of them never made it or if they did died shortly after. At 51 YO and a 7 & 8 YO retirement isnt in the cards. I plan to work until I die in order to put them through college and becvause retirement sounds boring.
Its not that I am not saving for it either. I have a pension and 401K but im hoping to blow that or my wife & kids get it after I pass.
I dont understand people who spend 35 years working to get to a retirement that may or may not be there
Agreed.
Heck, I'm only 28, and just now about to finish paying off my school loans ($3k left of $40k), with about $3k in retirement accounts (Bond Funds, Roth IRA, Traditional IRA) that are only just breaking even after 4 years. I've got another $9k in regular savings as an emergency fund.
I look at the way my parents, and so many of their friends just have so little in retirement savings and have lived frugally for their whole lives and can't envision myself in that trap.
So my retirement plan is to enjoy the money while I have it and can use it (before it's all going into hospital bills, prescriptions and nursing homes). Then once I run out of money, I'll simply kill myself.
way to many variables to make a general statement about costs of housing.
taxes on long island make ownership outragious. cost of labor to fix,repair and maintain can be huge as well.
we no longer want to own a home at all. we are going to contract on our second home we are selling this week and sold our primary about 6 years ago.
It also depends a lot on WHEN you buy; top of the market in 2007 was ther worst time to buy, but most times over the past 30 years were good times to buy.
Living on Long Island is probably just nuts, for many reasons, especially for those who commute to work.
the past was not really so great either. appreciation on homes barely exceeded inflation.
it depends on the alternatives for your money .
i bought my house in 1987 after selling a co-op . we paid 169k... i sold that house for 335k in 2003 or 2004.
sounds great until you realize that same 169k in the same portfolio i have been following was worth 1.9 million. i could have rented all that time ,subtracted out all the rent i would have paid and bought 2 houses with the money.
there is no built in advantage financially to home owership .
each deal,situation and lost oppertunity cost stands on its own.
in our case if we rented, that portfolio easily would have provided the income to pay a lifetime of rent increases each year as well as provide us with a greater lifetime income stream.
our biggest mistake financially speaking was buying and not renting.
thats something thats unique to each persons situation.
if there is any rule about home ownership its dont believe the crap we were handed down about it as the american dream and the only way you can be successful is to own.
people buy homes because they can afford to buy them because they are successful. owning a home in no way makes you successful. even if you sell a house at a profit you still have a lifetime of housing costs ahead of you waiting to suck that money away over time whether you buy or rent.
Last edited by mathjak107; 06-06-2012 at 03:11 AM..
My suspicion is that a lot of the people reportedly saving 'nothing towards retirement' --- are the same people who are up-to-their-eyeballs in credit-card debt ... and/or facing foreclosure on their houses.
There seems to be a mindset in this country that says, "If I can't afford it today, I can buy it on credit ... and will 'magically' be able to pay for it tomorrow." This same mindset allows people to convince themselves that 'they will 'magically' make-up tomorrow, for what they fail to save today.' Of course, this type of illusion is the substance of advertizing: "You deserve to have it all today!" -- None of these are rational or logical scenarios. They simply feed-into the self-centered desire for 'immediate gratification' (unencumbered with facts or reality!").
Like the government, most people irrationally try to 'manage their savings' without 'managing their spending.'
ARe you talking about the government or the people who think the government is doing a fine job because they handle their finances just like the government and expect the magic wand. The very financially illiterate people who will vote for Obama.
The problem is its the responsible people who pay for it all.
Every time you get a handout just remember someone else worked hard for that money.
Why should one consider burger flipping as a career? There is a reason why it is called minimum wage, not liveable wage. Get some skills and improve your income potential.
And, yes, I did start out in fast food.
That would require effort.
Its easier to whine and vote someone like Obama in to office because he promises to rob people who did the right thing and give to the people who can't be bothered with doing what it takes to improve their own life.
Common sense sense if you are flipping burgers and it does not pay well and you know a nurse for example does make a better wage then go to school. Duh!
unless you have endless resources of money coming in to do it all.
Some people believe there is an endless source of money and how they get into trouble in the first place. No worries, Obama will rob other people to pay for your inability to have a head on your shoulder, your lack of financial understanding of your own personal economy let alone the countries economy. Obama has an endless source of money to give to you.
Its called taxes, also known as other peoples money.
Nahh, the people being robbed didn't work hard, did not spend time away from their family for that money.
What is really scary is that people who don't understand finance are also voting and that is what Obama is counting on.
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Expecting 'magic solutions' is part of the savings problem!
