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I don't think there's any disagreement. Financial education should be MANDATORY in the schools. And employers should require at least some financial education as part of employee orientation.
As they say.."you can lead a horse to water, but you can't make him drink it."
It's still up to the employee to learn how to manage their own money. If advisors and educational material is made available no employer can be held to blame.
I have no formal personal finance education either. But there is information out there for those who want to self-educate.
Unfortunately, most Americans would rather spend their time watching American Idol, Dancing with the Stars or some other
mindless entertainment than spend time self-educating to improve themselves.
I don't disagree with any of this. But the reality is that most people will NOT self educate in financial matters. I find this frustrating, but it is reality. Would most people learn to read if this task was solely left to the family or to the individual's own devices? I think not...or at the very least, it would have taken a lot longer for the literacy rate to rise if compulsory schooling had not been part of the equation.
Not quite. If you dump money every payday into a 401k and DO NOTHING you will achieve a decent savings rate. You don't have to actively manage a 401k, and I suspect that many people who try actually get worse growth rates because they chase the market.
Yes, of course that's true. But many people are not going to be willing to participate in something they don't even understand. Yes, I get it. People should be more interested in their finances. But most are not. That is why this stuff should be a required subject for high school graduation.
Quote:
Originally Posted by Roadking2003
You don't have to have an education to live within your means. You don't need to be an engineer to understand that you should take responsibility for your personal finances. You don't have to be an IT genius to decide that you should put money in a 401k rather than buy a new car or smart phone.
Of course, all of this is true. But certain personality types come by saving more easily than others. If we want most people to be financially responsible, then we need comprehensive financial education in the schools. This is just not something we should leave for people to figure out on their own because most won't. You and I can sit back and feel smug and superior about how we lived financially responsible lives and be snarky about how others are not doing that, but I would rather live in a country where most people have their finances in order, as it not only is helpful to others, but it's helpful for me as well.
I am not a fan of King's Highway's brand of religion. But I will say that religion can, and often does give people a value system and the discipline needed for financial prosperity. Most of the world's major religions frown upon or prohibit things such as:
--Excessive alcohol consumption and drug use/smoking
--Having kids without being married (a major financial killer)
--Divorce and maintaining good relationships (Divorce is another major financial killer)
Psychologists are finding that those who attend religious services regularly tend to be healthier and happier (although they can't pinpoint all of the reasons for that). But being happier and healthier generally helps people to earn an income, save money, etc.
I'm atheist and I don't do any of those things.
Many of us have value systems without religion.
It has been proposed that those who are "religious" are happier because they don't think.
Who knows?
BTW, the dreaded Muslims have religious value systems, too.
The truth is that the financial markets are a pretty big scam that largely benefits insiders.
I have my money in a 401K only because of my employer match and the tax benefit.
Just take a look at all the fees you are getting soaked for to pay some clown with a BMW to simply manage the fund...when most of them perform below the basic index in their classes. You have to pay a managment fee for that "expertise"?
Well, for that matter, the whole money system is a scam (at least the way it's currently run). But if you are going to be dependent on the money system, then you should save and invest some of your money consistently.
It's true insiders benefit, but there are plenty of mutual funds that have done ok or even well over the last 10 to 15 years. A totally boring, plain vanilla fund like Vanguard Balanced Index (60% stocks/40% bonds) got 5.82% over the last 15 years and 7.11% over the last 10 years. Of course, most people do worse than the published returns because they sell when their funds are down and buy when their funds are high.
But there are also plenty of fund with good performance that don't charge rip off expense ratios. However, if your 401K has crappy funds, then you should complain to your HR department about it at work.
That's right, despite the crash in October 1987, the overall stock market was UP for the year 1987.
07-23-2012, 03:44 PM
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n/a posts
Quote:
This constant drumbeat about how people are struggling because of cell phones and TV's now ......tatoos...the numbers don't add up.
Tattoos are irrelevant unless you're at the shop getting new ink done every month. Cell phones and TV have a somewhat larger impact, since they are monthly expenses. Take a family of 2, and use the $100/month (probably more, but let's say they keep basic service) they're spending on cell phones, and the $100 or so they're spending on cable, and you're at $2400/year. Doesn't sound like much, but after 30 years that's $72,000 that could have been in the bank, assuming you didn't invest it at all, or even bother to stick it in a savings account.
Even saving $100/month or so would put people above the pathetic $30,000 mentioned in the opening post.
I'm not saying people should give up all luxuries or whatever, but it wouldn't hurt to take the occasional look at the long term impact of those little things we usually don't give a second thought.
It basically already is too late for them and they sort of admit it. One of them at least does not blame anyone else. The other blames everyone and everything else but himself.
I'm not a big fan of tatoos, but in all seriousness, how much does a tatoo cost? A hundred bucks? A few hundred?
This constant drumbeat about how people are struggling because of cell phones and TV's now ......tatoos...the numbers don't add up. I know it makes people feel better about themselves talking about how others waste money, but the decline of the middle class in the US has little or nothing to do with cell phones,TVs, or EVEN tattoos!! . It has everything to do with outsourcing, downsizing, real wages, health care costs, college tuition, and property taxes. My father was able to buy a house with no college education. My mom didn't have to work, we had new cars every 5 years, cable TV, pay for some state college for us,and he was able to retire with a pension..in a private company!! That's the America of 40 years ago.
But you guys can keep patting yourselves on the back because you didn't pay $200 for a tatoo. It's completely irrelevant in the grand scheme of things, but it makes you feel smart.
It's not the either/or you're making it out to be. America threw away it's savings and frugality ethic just when it needed it most. (Yeah, that was smart!).
Even those right wing nut jobs (sarc.) at the New York Times are starting to point out that a significant part of the decline of the middle class is the result of the huge increase in out of wedlock births and single parenthood:
I am not disagreeing with you about a lot of the stuff you mention. But we are not powerless against the forces that work against us. You seem to think small things don't add up. You're absolutely wrong about that.
$50 a month in a boring, plain vanilla index fund like Vanguard Balanced Index would yield
$68,681 over a 35 year working lifetime (assuming a conservative 5.82% rate of return). and
$95,303 over a 40 year working lifetime (assuming a conservative 5.82% rate of return)
More important is the savings habit itself. People who get in the habit of saving $50 a month for retirement usually will save more over time.
Last edited by mysticaltyger; 07-23-2012 at 03:57 PM..
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