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i learned along time ago that life with out choices can be pretty horrible . i strived my entire life to get as much saved as i could so i could have as many choices as i could .
being forced in to a crappy medicaid home 100 miles away from family and friends because that is where the open beds are can be brutal.
my best friend growing up pleaded to guilty to a crime he did not do because he had no money for a choice . his family was just over the limit for legal aid but did not have enough money for an attorney .
It should be about balance but a measured balance. I have trouble spending especially when it comes to cars but I have wanted a Jaguar F-Type for some time I just can't bring myself to pull the trigger. I would say it might be reaching if a substantial portion of 3 years worth of savings still leaves you with a note on your car. It might be too expensive at that point
The bolded is what I'm thinking, too. I just bought a car myself--to replace the 20 year old car I had. So I very much had this "what good is money if you're not going to use it?" discussion with myself as well, as I was dragging my feet on getting another car. But I sold some taxable mutual funds that I bought over a decade ago for the purpose of buying another car and paid cash for a 2 year old used car. No payments for me, thank you very much.
Its all about balance. There is a lot of black & white thinking on most finance boards with regards to saving. I get it. Most people don't save enough. 5% isn't going to be enough for most people and nothing certainly isn't enough.
Correct.
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Originally Posted by JO783
But saving nothing isn't necessarily any worse than scrimping and saving every penny to the point that you are subsisting off rice and beans and haven't taken a vacation in 20 years despite a 200k salary. .
Talk about black and white thinking.....what percentage of people making 200K live as you describe? The percentage is so small it's not even worth considering.
Admonishing people because in order to retire to 80% of peak value income they have to live on literally 20% of their wages, is elitist and self-righteous privileged speak..
What a nonsensical statement. The beauty of living on 20% of what you make is you don't need to replace 80% of your income. The hyperbole is soooooo tiresome.
Why is it that people in a poor country like China can have a 30% savings rate but people in a rich country like America only save 5%. We've become a bunch of soft crybaby whiners---or complainypants as Mr. Money Mustache would say.
But I sold some taxable mutual funds that I bought over a decade ago for the purpose of buying another car and paid cash for a 2 year old used car. No payments for me, thank you very much.
Not a dig... But was that really the best idea? With 72 month interest rates on even used cars being around 2.5% wouldn't it have been wiser to keep your money invested? Shorter terms might even get you under 2%.
"Personally" it bothers me when people with positive net worth talk about paying off cars/houses early at the expense of paying taxes now and locking up capital so that they can avoid payments.... What's so wrong with having payments? At 5+% I might start paying cash, but interest rates are so low it doesn't make sense "to me"
Not a dig... But was that really the best idea? With 72 month interest rates on even used cars being around 2.5% wouldn't it have been wiser to keep your money invested? Shorter terms might even get you under 2%.
I'm not sure if it was the best idea, since you can't know what the optimal decision was until after the fact. I do know that if I had made payments, I would've had to cut back on my retirement contributions which would have meant paying more income taxes. Plus, selling the funds in taxable accounts meant I didn't have to calculate dividends & capital gains on 4 different fund holdings every year. It just simplified my life to sell 4 different funds, all of which were pretty small holdings. Not including taxes, I made about 5K on the 4 funds over the time I invested in them (some for more than a decade) so I figured enough was enough. Because I really don't know what stock and bond markets are going to do over the next 5 years, anyway. The outlook for bonds is dismal (I had some bond funds) and stocks are considered fully valued, if not overvalued, too.
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Originally Posted by volk2k
"Personally" it bothers me when people with positive net worth talk about paying off cars/houses early at the expense of paying taxes now and locking up capital so that they can avoid payments.... What's so wrong with having payments? At 5+% I might start paying cash, but interest rates are so low it doesn't make sense "to me"
Well, I just told you what was wrong with it in my specific case. I also think what's wrong with it is we all have a tendency to spend more when we borrow money. Yeah, I know, you're the one person who's the exception. The other issue is just one of mental bandwidth. I want simplicity in my life. One less payment to think about is a good thing. Plus, it would have been more time and paperwork to sign when I bought the car.
Talk about black and white thinking.....what percentage of people making 200K live as you describe? The percentage is so small it's not even worth considering.
I'm thinking you took that statement quite a bit more literally than I intended it....
After reading a few pages, it's obvious that there is no one "right" way to live, just as there is no job that is secure. We can use the best of our common senses, but life is also a great big crap shoot.
I had two friends that were living on modest means but with different values. One was saving for a house and drove old and used cars, while the other cared less about his living domains but always chose to have new cars with less hassles. I saw both sides to their preferences.
I have other friends who seem to spend a lot of money on travel and entertainment, but they don't have any kids to consider when they're gone. They have more fun than any other couple we know.
And yet, I have other friends who have spent much of their savings on adult kids who - basically - could not get their sh-t together for various reasons (one son is in prison now), and they will never see that money again. They live on a very tight budget as a result and she never looks particularly happy.
For us, I probably don't save as much as I should because, while I want retirement security for our future, I also want to enjoy today before we're too decrepit to enjoy the same things later. Our health is already not what it used to be. Our house will be paid off in one year. At one time we considered willing our home to a favorite nephew, but have changed our minds.
i learned along time ago that life with out choices can be pretty horrible . i strived my entire life to get as much saved as i could so i could have as many choices as i could.
Yes, And along the way -- like all of us -- I'd imagine you made and had "choices" to make about spending vs saving, to allow for choices about living, care and lifestyle "choices" later. Choices along the way…..set up the possibility of having others "choices" later. And of course, some people even have fewer "choices" (different?) early on than others.
A couple thrown the loop of having a disabled child has different finances than a couple with a "normal" child…let alone different choices than a couple with no children. A SINK making 30K has different finances than a SINK making 100K.
Of course one could say the "choices" are the same….there's just less or more money available to allocate. But that's not totally true because clearly the couple with the disabled child has "choices" the other couples don't have to make, yet may have less money to allocate (for those choices) than those other couples.
Last edited by selhars; 09-04-2016 at 11:56 AM..
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The other issue is just one of mental bandwidth. I want simplicity in my life. One less payment to think about is a good thing. Plus, it would have been more time and paperwork to sign when I bought the car.
