Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
In my example one woul either rent a 500k home or own one.
if folks can afford to buy a house but dont its human nature for most that if they didnt buy a house their money tends to seek its own level like water.
they either rent a lavash apartment for what they would have spent, or buy a better car, take more vacations or spend it on hobbies but usually not much of that dough finds its way into investments.
folks just lack the discipline to save the difference in the early years.
im not one who wants to own a home ,in fact i sold our vacation home just this past week so im not pushing home ownership but the sad fact is for many at least the residual value of the home is a consolation prize at rettrement . renters tend to fall far behind their owner counter-parts just for the reasons above. .
I find that disciplined saving is one of the most powerful methods to join that $M club. I was fortunate in having a long successful sales career. Years that I did well and earned large incentive compensation I saved as much as I could in addition to aggressively investing in my company's 401k plan. The company match used to be dollar for dollar until about 2001 when it became $0.50 on the dollar. Over the years, I built nice sized 401k's across multiple jobs by saving aggressively. In 2003, I began to consolidate them all by rolling the multiple 401k's into an IRA. I also rolled my lump sum pension assets into the IRA 1 year after leaving one of the jobs.
When the IRA hit a certain size, I began to have it professionally managed. That in itself is one of the best things I ever did because I am now well diversified and re-balance quarterly. The result over the past 9 years has been steady growth even in the down years.
So now I find that I am well funded for retirement and have substantial cash/liquid savings that have allowed me to take a layoff a year ago at the age of 57 and decide to just hang it up. It's weird not earning those paychecks like I used to but it's also shown me how little really I need in terms of spending.
Disciplined saving is indeed a powerful feeling because once you gain a degree of financial security, your entire life changes. Unfortunately so many people over the years lacked that discipline that requires you to forgo the immediate luxuries & pleasures that life may have to offer in return for longer term comfort & security. Just no vision or plans I guess. Saving is work too and too may people just don't want to do it.
I'm in my early 30s and I know a few who have already made it. I won't comment on myself since even though we're all anonymous here our IPs are recorded and I probably have enough info on the net to have folks slowly figure it out.
One is a genius computer network security guy and savvy tech investor.
One started mining in Russia through friends he has over there.
Another owns multiple textile factories in Brazil and S. America, and while isn't a "millionaire," if she moved back to Brazil she could live like a queen. Most of her assets are tied up in the machines but she could liquidate pretty easily.
And I agree that a million isn't a lot anymore. Through aggressive savings any run of the mill engineer can be a millionaire by the time they're in their 40s in their 401k alone.
Suze Orman is recommending no one get into a mortgage on a house at this moment. She also says the cost of a house is not just the mortgage. There are endless additional costs no one figures into the cost of buying a house which most people are either unaware of until they encounter them, or are surprised by even if they think themselves very cautious. Love Suze Orman.
shes a trip. her advice isnt always correct though. she tries to give advice that does not fit everyone .
i wrote her on a few things she was just dead wrong on and she never responds.
her answer that 401k loans are taxed twice that she says all the time is just dead wrong.
the bulk of her audience are not successful people but financial failures. her show is really geared for those who are on the verge of financial suicide. her advice is geared to keep you from doing more harm most of the time whether its really correct or not.
i usually watch the can i afford it segment and turn the rest off. her cast of characters is really useless to me as far as learning goes.
i prefer to watch shows that work with people that are successful like consuelo mack where i can actually learn stuff to become more successful myself..
yep those soft costs on home can be huge.
up until last week when we sold it we had a 2nd home which we were thinking of one day retiring to.
we realized the area really wasnt right for retiring to so we decided to sell it. we had paid cash for the house, didnt even live there full time and the soft costs were adding up to huge sums of money.
with taxes at only 3k a year the house cost us 8-10k a year to keep up and once i figured in the lost income on the money tied up in the house that 2nd home ran us 20k a year.
far to much for a place that got used every other week for 6 months out of the year. the winters were just to brutual in the pocono mountains to entertain trying to come up during the winter.
.
Last edited by mathjak107; 07-16-2012 at 03:52 AM..
And I agree that a million isn't a lot anymore. Through aggressive savings any run of the mill engineer can be a millionaire by the time they're in their 40s in their 401k alone.
I totally agree that any run of the mill engineer (or any decent paying profession really) could, butconsdering that there are only about 5 million millionaires in the US, or as many as 15 million if you include the value of their primary residence, out of 300 million people or 120 million households, then it's still that having $1million in savings is not very realistic a goal for a huge majority of the population and it's very unlikely that they actually will. That's about 4-5% of households across the US are millionaires. Add in the fact that the vast majority of the people who actually have that much are 60+ years old or didn't actually earn it themselves but inherited it, the pool of working engineers dilligently saving is actually pretty small.
Then only about 1 million households in the US have more than $5 million; that might as well be a house on the moon.
So the moral is save save save and invest invest invest when you can; you'll join a very rare club.
Million dollar is a lot of money but that depends on your lifestyle. If you are fairly frugal and want to live a frugal retirement life then it is a lot of money. It will most likely be a lot 30-40-50 years from now.
Originally Posted by mysticaltyger
Really? Wow! I can't imagine. I can't even remember the last time I bought a lottery ticket. It had to be more than a decade ago.
Things I see supposedly "poor" people blowing money on:
--Pot
--Alcohol
--Tatoos
--Cigarettes
I could go on, but I think we're both on the same page.
Quote:
Originally Posted by Info Guy
Right, that is why they are poor and they blame the economy and gov't.
When the poor get money they tend to spend it in frivolous ways.
For the most part, because the poor will not even crack a book open to try to learn about personal finance and what they can do to put themselves in a better place, they prefer to blame everyone else, the economy, government, the rich. This is why the poor like Obama so much, its always everyone else's fault lol.
Forget the tattoo, buy a finance book instead, learn why you why $100.00 is NOT $300.00's. Learn and do what it takes to make sure you spend less than you get. Work an extra job, get rid of debt. save for emergency. Its a hard thing to do and why people want the government to take care of them.
If folks can afford to buy a house but don't its human nature for most that if they didn't buy a house their money tends to seek its own level like water.
They either rent a lavish apartment for what they would have spent, or buy a better car, take more vacations or spend it on hobbies; but usually not much of that dough finds its way into investments.
Folks just lack the discipline to save the difference in the early years.
I'm not one who wants to own a home. In fact, i sold our vacation home just this past week so I'm not pushing home ownership; but the sad fact is for many, at least the residual value of the home is a consolation prize at retirement. Renters tend to fall far behind their owner counterparts just for the reasons above. .
Well said .
I guess my whole point is if you want to be well off financially, you can't be like everyone else, whether you're a renter or a homeowner.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
. 
