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Old 05-30-2019, 08:19 AM
 
25,967 posts, read 32,962,923 times
Reputation: 32145

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Quote:
Originally Posted by RationalExpectations View Post
I'd rather extinguish lit cigarettes on my tongue than "go shopping."
LOL. You are much like my BF. I thoroughly enjoy shopping. I find it very relaxing. But only when I am not searching for anything in particular. If I am, then shopping becomes a frustration, usually.

I probably enjoy it because I rarely have time for it.
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Old 05-30-2019, 08:25 AM
 
2,136 posts, read 524,377 times
Reputation: 3724
Quote:
Originally Posted by fluffythewondercat View Post
I don't even think the "$400 emergency" is a real statistic.
It is NOT a real statistic. It is the result of shoddy journalism plus biased journalism (biased in the sense of having a an agenda and then seeking data to confirm it.)

In a survey, if someone were to ask me "Do you have at least $400 saved in a savings account that you could use for an emergency?" My answer would be "No. I don't have a savings account." The shoddy, biased journalist will use my response to report, inaccurately, that I cannot cover a $400 emergency. I can easily cover a $400 emergency. I can easily cover a $4,000 emergency. I can easily cover a $40,000 emergency. I just don't have a savings account.

Many people, like me, do not have savings accounts.
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Old 05-30-2019, 08:43 AM
 
Location: Maryland
1,762 posts, read 561,837 times
Reputation: 3871
My one fault in that list is cars. I have one practical car that is a sleeper and one hobby hot rod.
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Old 05-30-2019, 08:43 AM
 
5,405 posts, read 2,813,304 times
Reputation: 10100
Quote:
Originally Posted by RationalExpectations View Post
It is NOT a real statistic. It is the result of shoddy journalism plus biased journalism (biased in the sense of having a an agenda and then seeking data to confirm it.)

In a survey, if someone were to ask me "Do you have at least $400 saved in a savings account that you could use for an emergency?" My answer would be "No. I don't have a savings account." The shoddy, biased journalist will use my response to report, inaccurately, that I cannot cover a $400 emergency. I can easily cover a $400 emergency. I can easily cover a $4,000 emergency. I can easily cover a $40,000 emergency. I just don't have a savings account.

Many people, like me, do not have savings accounts.
The point is not what financial object the emergency funds lie in. The point is how quickly acessible it is, and can it be drawn on without screwing over someone else.

There are people who stash cash. That isnít in a savings account, either, but it sure is liquid.
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Old 05-30-2019, 10:07 AM
 
2,136 posts, read 524,377 times
Reputation: 3724
Quote:
Originally Posted by pikabike View Post
The point is not what financial object the emergency funds lie in. The point is how quickly acessible it is, and can it be drawn on without screwing over someone else.

There are people who stash cash. That isn’t in a savings account, either, but it sure is liquid.
I agree -- and that is precisely why poorly designed surveys with shoddy/biased journalism is the root cause of the incorrect headline regarding people not being able to cover a $400 emergency. It just isn't true.

It is like the game of telephone among kids. Put a dozen 10 year olds seated on the floor in a circle. The first person whispers something to the person on her right, who then whispers it to the person on his right, etc until it gets back to the person who initiated it. What comes back is frequently vastly different than what was initially whispered.

What starts out as a question about location of liquid funds comes back as shoddy statement that most people can't cover a $400 emergency. Hogwash.
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Old 05-30-2019, 04:10 PM
 
431 posts, read 104,127 times
Reputation: 1027
Here's the basis for that "Americans don't have $400 for emergencies".

https://www.federalreserve.gov/publi...lds-201905.pdf

Only 17% of those surveyed don't have any way to cover a $400 emergency expense. The rest have cash, credit or can borrow.
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Old 05-31-2019, 01:55 AM
 
7,894 posts, read 5,024,944 times
Reputation: 13528
Quote:
Originally Posted by LillyLillyLilly View Post
This article is talking to the 75% of Americans who don't have $400 saved for an emergency. For them, buying $4 coffee drinks is an extravagant "want" that would be easy to learn to live without. ...
The accumulated benefit of foregoing small but recurring costs, grows substantial only if we assume good annual rate of return, compounded over many years. Presumably the people who can't find $400 for a sudden emergency aren't much adept with stock-market investment, or really any investment. Their idea of savings and investment is the local bank. Their savings lose money to inflation every year... and they're on the hook for income-tax on what meager interest-rate they do manage to earn. Foregoing 100 lattes this year, might mean the capacity to buy only 50 lattes a couple of decades from now. In other words, splurging on the lattes is actually a better investment for such people, than foregoing the near-term wants, in favor of trying to amass greater resources long-term.

Quote:
Originally Posted by Piney Creek View Post
You're touching on an important point. I think lists like these are geared for younger people. ...
Quite true. For younger people who are willing to invest aggressively (see point above), the ensuing decades of life matter greatly. Time helps. For older people, foregoing the small daily indulgences just doesn't amount to either significant total savings, or significant time for saved money to compound. Indeed, one can argue that one of the pleasures and benefits of growing older, is that one can afford to treat oneself to such small daily indulgences without feeling guilty.

Quote:
Originally Posted by hotzcatz View Post
It may be for the folks who want to spend $4 on a latte, that they don't have that many other options for 'luxury' items. If they can't come up with $400 for an emergency, they're not gonna come up with that much for a luxury item (one would suppose, anyway) so the $4 latte may be a desperation "I'm worth it" gesture.
Exactly. Such behavior might look stupid from the viewpoint of comfortable people, who are hankering to increase their net-worth. But to the impoverished, these small pseudo-luxuries are a better return on investment. After all, if the point of money is to derive enjoyment and a sense of personal autonomy and significance, and if Vanguard Flagship Premier membership is intractable, the $4 latte is an excellent substitution.

Quote:
Originally Posted by TaoistDude View Post
The article focuses on small things, which do add up over time. But it neglects the big-ticket items which are probably more wasteful - and less enjoyed. Those include motorcycles, ATVs, watercraft of any kind ...
True, but I'd go even further: the really big-ticket items are things like divorce, criminal convictions, law suits, major accidents or health-disasters. Some of these are preventable, some are not. For some, one can hedge risk via insurance; and for some, one can not. An affluent person would lose a lot more from divorce, than from taking lavish vacations, buying a ridiculous sports-car or some mega-yacht thatís expensive to store and that never gets sailed. The wealthier we get, the more it becomes important to make good judgment (and to enjoy good luck!) in the major regards, and the less it matters how frugally we shop or even if we have an extravagant sports-car habit. To give an outlandish but illustrative example, it would be cheaper for Elon Musk or Jay Leno to overpay millions of dollars for a classic Ferrari or Cobra, than to lose say a sexual harassment lawsuit for $100M.
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Old 05-31-2019, 02:48 AM
 
Location: Washington State
18,438 posts, read 9,548,793 times
Reputation: 15732
Quote:
Originally Posted by VTsnowbird View Post
I tend to agree with this writer https://humbledollar.com/2019/05/farewell-money/


Just wondering, did you manage to save for a good retirement by avoiding these money wasters, or did you do OK still having a latte twice a day and with 25 pairs of shoes in your closet? Or, choice #3, did you spend on all these kind of things throughout your life and now you wish you had put more away for retirement?
Those are good ones that I would agree with. We probably are guilty on quite a few of those but we did put away for the future so we're fine ( I think)
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Old 05-31-2019, 05:12 PM
 
Location: Sylmar, a part of Los Angeles
3,971 posts, read 2,533,474 times
Reputation: 8487
I grew up poor and it never left me. So I was real frugal all my life and now my financial advisor tells me to spend more and I just can't.
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Old 05-31-2019, 05:27 PM
 
864 posts, read 197,106 times
Reputation: 1004
Quote:
Originally Posted by TMSRetired View Post
Here's the basis for that "Americans don't have $400 for emergencies".

https://www.federalreserve.gov/publi...lds-201905.pdf

Only 17% of those surveyed don't have any way to cover a $400 emergency expense. The rest have cash, credit or can borrow.
but they have a great cell phone data plan ---I've seen homeless begging on the streets of Tampa texting on their phones while I the cheapskate, refuse to buy into a data plan to save myself $500-1000/yr.
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