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Most of my co-workers work hard, so why aren't they rich?
Because they are not smart . Doing things others can do for themselves or anyone can do will never pay much but the work certainly can still be hard or dirty.
smart is finding the career paths for things others can't or won't do for themselves .
i am always reminded of my septic guy in pa when we had the house . the guy was not very educated but he was smart . he chose a path others won't do . he was quite successful and not only owned the septic cleaning truck but commercial real estate in town .
Last edited by mathjak107; 03-17-2016 at 02:11 PM..
A typical union teacher contract in the Northeast has a pension based on the last 3 years of earnings. Typically, it's 2% per year worked with a cap at 75%. Most states, the pension is exempt from state income tax. If you teach 38 years starting at age 22 and retiring at 60, you have a very nice pension. The pension typically has a cap of 2% on COLA adjustments. They typically also get health benefits at very low cost until they hit Medicare age and might get some deal on a supplemental program once they're on Medicare.
These numbers come from Connecticut, by the way.
That's "present", not "past". It's totally out of whack with what the private sector does and unfunded pension liabilities are likely to crush quite a few states and many cities & towns.
Until last year, I never got any 401(k) match at all. Last year, I got a 3% safe harbor. Barely a dent compared to the $24K catch-up contribution I make every year.
If you do an apples & apples comparison, a million dollars in a 401(k) is roughly a $40,000 income stream. A union teacher in Connecticut with a Masters earns about $90K their last 3 years working. When you factor in the health care perk and COLA adjustments, it's easily worth $2 million in 401(k). You'd need to be putting away something 10% into a 401(k) with a 10% match to have it pile up to $2 million assuming 3% return after inflation. Nobody in the private sector does anything close that I've ever seen.
I don't disagree with your numbers as they seem to be fairly reasonable and based on personal experience. However there is one key point I feel you are missing.
With a 401k that money is yours. You can leave it to your children, a charity, grandchildren, whatever.
With a pension if you work for 40 years and then croak that's pretty much it.
Our economic system is just one huge Ponzi scheme IMO...
How much of the population really wants to spend the time and energy needed for retirement planning and research, which stock market investing seems to require??? Get real, people...
What does your portion of the population want to spend time and energy on?
And some people think what they are doing is "hard" when it is not. Stocking shelves, ringing up customers, pouring lattes are not hard work.
Exactly. Hard work isn't necessarily difficult work.
Some people get insulted by terms like "skilled" vs "unskilled" work. Stocking shelves is unskilled work, just about anybody could learn that task pretty quickly. Try teaching someone to code an algorithm when they've never coded before. Or interpret corporate tax law if they've never picked up a law book. Or wire a circuit breaker, repair an airplane engine, etc. It's going to take much, much longer. And odds are many people aren't going to be good at it, especially right away.
I think some of those people that have "hard" jobs actually have easy jobs that are physically demanding. There's a difference.
And some people think what they are doing is "hard" when it is not. Stocking shelves, ringing up customers, pouring lattes are not hard work.
Ummm...you gotta take into account the customer...on average, convenience store customers are pretty low on the hierarchy of retail customers. Think about who patronizes convenience stores.
Ever handle manual bottle returns with used syringes?
When I was in my 20's I had very little extra money.
Yet I signed up and used the Drip Investor to buy 1 share of a dividend stock a month. I did that for 6 months and *voila*..I had a stock portfolio
Dividends got reinvested and I sent in money to buy more shares every month..$25-$30.
Between stock dividends reinvested, stock splits and my extra money it grew over time to where it was finally worth something.
Most people used their extra money to "buy stuff".
I used my extra money to go to work for me to earn even more money.
Dang! I used the extra money to cover the latest rent increase!
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