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Stocks are a house of cards, the only reason they are "worth" something is because others are willing to buy them. They aren't even pieces of paper any more. Real estate has always interested me because it's tangible. Stocks on the other hand can be wiped out to zero.
Stock holders aren't "owners", that is a myth. Perhaps if you own 10% of a company you have a say but this doesn't apply to 99.999999999% of the stock holders out there.
Actually EVERY stock holder IS an owner and has voting rights, which is what the ownership buys you. Your vote can help elect the board of directors for a company which then makes decisions for that company. Most people throw away their vote notices and never attend shareholder meetings. Yes, you might only have a very, very small share in the ownership but you are still an owner.
I come from a pretty frugal family and we always believed in saving until I moved to California. I spoke with some co-workers and they all contribute 6%, which is the max. matching limit set by our employer.
If it were up to me, I would contribute the max of 30% per pay check so I hit the $16k 2009 max. Am I missing something that would preclude people from saving and maximizing their tax benefits? Apart from them having more urgent needs (e.g. buying a car, new family) doesn't it just make sense to save and put away the max. amount of money?
I always wanted to save more, but what with paying for my student loans and barely being able to pay my rent or buy groceries, it really wasn't an option at the time. I had professors in college who talked all about 401k's and IRA's and how starting young was the best thing to do, but in reality, it just wasn't possible. I remember going out with friends, just hanging out at a bar with $2 in my pocket.
Now we don't because we are raising 2 kids, and things are tight. We recently moved to PA to improve our lifestyle...I became a SAHM, after realizing I was paying half my salary for daycare. What a waste! So now we have a bigger house with a smaller mortgage, one car is finally paid off, but we aren't any richer...one day we'll save more, but right now I'd like to be able to afford the occasional Happy Meal, and pay the fees for my son to play soccer.
I'm putting 10% in my 401(k), which has a gazillion investment choices. Because I have twenty-five years left until I retire, the bulk of it is invested in stock mutual funds. My account is down about 30% now. However, I figure that even if we have a "lost decade", I'll be okay after I use the next fifteen years to recover. Also, as I get closer to actually retiring, I'm going to reallocate into safer funds.
It isn't easy to do this; I have two kids, one of whom just graduated from college, and another still in college. However, I can't expect them to pay my bills or help me when I get old; they're going to have their own families to take care of.
firefightermom - I know things are tight...
but in all reality, if you wait until things are 'better', you will never save anything.
You really do need to pay yourself first.
When you paid that car off, the amount of the payment should have gone into a 401k/savings/IRA/whatever... every month, just like the car payment.
Great idea in theory...but again, things are tight now so it's just not possible to just tuck that $300 or so into savings and forget about it. You are correct in saying that you should pay yourself first, and we do put money away every paycheck, towards my husband's pension fund.
Once a couple other required major purchases are paid off, I intend to put the car payment amount into savings, but for now, I'd rather stop taking money out of savings to pay the bills...our heating bill is what is killing us, and I keep the temp at 67F during the day and 62F at night. Our bill is still about $300--so there goes the idea of saving that car payment! I'm looking forward to the summer, when my bill will go down more than half.
Great idea in theory...but again, things are tight now so it's just not possible to just tuck that $300 or so into savings and forget about it. You are correct in saying that you should pay yourself first, and we do put money away every paycheck, towards my husband's pension fund.
Once a couple other required major purchases are paid off, I intend to put the car payment amount into savings, but for now, I'd rather stop taking money out of savings to pay the bills...our heating bill is what is killing us, and I keep the temp at 67F during the day and 62F at night. Our bill is still about $300--so there goes the idea of saving that car payment! I'm looking forward to the summer, when my bill will go down more than half.
I am older. I am retired. So feel free to say that my experience no longer applies, it was ancient history.
I worked a career in the military. EVERYONE KNOWS that the military is underpaid. I have known many sailors who were financially strapped, who did not have a single dollar left over to invest with.
I took courses on budgeting, and I volunteered to help other sailors with their budgets.
I had to learn hos to do it.
My Dw took courses and she volunteered her time, and she gained experience budgeting.
We both took courses on tax filing, and again we volunteered to help others.
We both learned tax planning.
It took a lot of work to gain control of our finances.
To find out where we could cut costs, to learn tax-planning so we could stop paying income taxes. Paying 25% of your income to the Fed is crazy, when it could better be spent yourself.
It was hard to learn to do. It took effort. It took practice.
However looking back; it allowed us to invest. Our investments grew. When I became eligible for my pension I took it. We sold off some of our investments, and bought a farm. No mortgage with cash. So today as a retiree my budget is very low.
But this all started for me, as an enlisted sailor. Making very low wages and supporting a family.
Believe me it is possible.
I retired in 2001, see? ancient history. I was 42 when I retired.
Back in my day, it was possible to learn to budget, tax-plan and invest.
I'd say it is the choices individual companies give their employees. If you have alot of choices (which I had when I was working) then its a no-brainer even if you just put in a small percentage. I've stayed with Vanguard even though I retired and I did not lose money in this last down turn because I had very conservative choices.
I have friends that worked for companies that were manipulative in terms of 401 K choices. If they wanted to get the match it had to be in the company stock, or they had to own a certain percentage of the company stock.
Basically alot of people get no matching contributions. Then many can not afford to do this at their current income levels. Many live paycheck to paycheck.The little some can save needs to be immediately accessible for emergencies.Efven then looking at the difference between those that invest in 401K between those that can manage the moeny investments shows that the returns vary greatly.
bek people like you and me listen to dave ramsey and dont spend much time at the mall or in club med. we retire early. we are not victims. we are not rip off artists. but we are not much fun and we are not in the in crowd. people like us "dont make any sense". most people perceive themselves laid back, they are not, they are laying down.
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