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Old 08-21-2009, 03:28 PM
 
Location: Central Ohio
10,560 posts, read 13,685,928 times
Reputation: 15475

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Quote:
Originally Posted by CosmicWizard View Post
Randomdude wrote:
Maybe thats because other factors ARE to blame for their economic futility. Maybe if young people had the opportunities their grandparents had, and werent simply waiting for their grandparents and parents to die to cash in on their collected wealth, they wouldnt be blaming at nearly the rate.
Let us hope that anyone playing the blame game quickly understands the futility of it. The only likely outcome of blaming anyone or anything for a problem is that the one doing the blaming feels increasingly powerless and bitter the longer the game is played. It won't change the situation, and it certainly won't change the person being blamed. Blaming is a totally dis-empowering strategy.
The 20 somethings playing the blame game just remind me how stupid many of them are.

What do they think I got after working 45 years?

I got a house, I got a car and maybe enough money saved where I can take $500 a month out after a retire. After 45 years of work don't you think I should own my own house?

Hate to break it but a lot of baby boomers didn't lose it because they never really had it in the first place.

The big mistake baby boomers made (I definitely include myself in this mix) is we didn't save beyond putting money away into an IRA or 401k account.

We hear stories of the 58 year old who made darn good money his entire life until last February when he was laid off for the first time in his life. Now he is broke, scared, nobody is returning his calls and he is missing paying bills. This is not pretty.

But for 30 years he and the wife both worked. His take home pay averaged $960 per week while his wife took home $390 for a total of $1,350 per week which isn't all that bad in terms of take home pay.

Their mistake was not saving 100% of her paycheck for the last 20 years. Instead of having accumulated $405,000 in cash (not counting interest which at just 4%, which they would have received in the most safe of savings accounts, would equal $615,000) they purchased Harley Davidson's and went on some world class ski vacations.

If they had the $615,000 they wouldn't have to worry about having a job at 58.

Ok, things were tight. What if they had saved just half her check? Certainly they could do that. Just half would be over $307k and in many, many parts of the country you can purchase a pretty good house and live several years after on zero income with that.

Baby boomers were stupid, we followed our federal governments example and ran up deficits while forgetting we couldn't just print money.

I was in the same boat but five years ago I saw this mess coming and did something about it to get ready. I sold the McMansion, right at peak , and bought down. We paid the bills and my goal was to set us up so 10 years before retirement we could save $2,000 per month for 10 years cash. My hope is to be able to halfway make up for what I was to dumb to start doing when I was 35.

For many 50 or 60 somethings it is to late but if you are 30 take this lesson to heart and start saving now. My advice is to save 10% of your take home income in addition to any retirement you might have. Sorry, but if you can not save 10% because it's "to tight" then you're living to high on the hog. I know, I did this.
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Old 08-21-2009, 09:38 PM
 
5,747 posts, read 11,353,927 times
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The best financial advice I ever received came from my husband's Godfather shortly after we bought our first house as young twenty-somethings. Knowing that it was likely that our careers would find us living in a succession of houses, he suggested that we keep to a thirty-year mortgage plan no matter how many houses we ended up owning.

We lived in our first home for seven years, so when it came time to purchase our next house, we bought a house that we could afford to pay off in 23 years without exceeding 30% of our net income. Our next house came two years later, and we stuck to the plan. A few good investments and generous raises allowed us to pay cash for our fifth (and hopefully last) house only nineteen years after that first purchase.

Today's housing market may not make it possible for young people to do the same thing, but if possible I highly recommend it. I think it was absolutely central to our financial success.
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Old 08-22-2009, 01:57 PM
 
1,841 posts, read 4,268,477 times
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Quote:
Originally Posted by formercalifornian View Post
...

Today's housing market may not make it possible for young people to do the same thing, but if possible I highly recommend it. I think it was absolutely central to our financial success.
Correct on that paragraph. In the new paradigm all your scheme would effect is that you would have to downgrade homes every 7 years as nominal appreciation rates will not overcome transaction costs in the span of time of less than 10 years. Which is diametrically opposed to the reason people got into home ownership for in the first place.

--- break break---

As to the poster that suggested a more aggressive savings is the ticket to having enough for retirement, I agree with you in principle, but I find it a pipedream when juxtaposed with the culture of "american" expectations boomers and millennials alike have been subscribed to.

Let me put it this way. I've gotten away with saving 25% of my net income for the past 2.5 years, and my life is predictably one of a monk. Not fun. However, in the same amount of time I've drawn from those savings to deal with the idiosyncrasies of life. Traveling to bury a family member, medical emergencies, transportation costs that are not budgeted in the bare-bone monthly cost of living, et al. Entertainment is comprised of cable TV, two movies and getting the wife a gift on the anniversary. No fancy vacations, no new cars, and no children! If I had to truly put the entire scope of my savings out of sight, out of mind for 35-40 years, I'd live a miserable quality of life during my productive years just to end up underfunded anyways at the age of 70, at which point I've given up the pursuit of my passions in life for the ability to fund my lifelong wait for a final hospital stay.

As much as I gripe the boomers for screwing up the pooch for us Gen Y+, I'm with them on that one, forget that life. Harleys and skiboats at the age of 70 is not par for the course, it's retarded. And this is coming from the guy who saves 25% of his net income (pre-kid mind you....), imagine that Rx plan for the carpe diem crowd. Forget it. 401Ks are a non-starter. I consider myself sensible and frugal, but I value feeling ALIVE today much more than I value the ability to live past 70. To each their own.

The reality is that the early boomers could live on 80% of their net income and fall back on a pension to take them home. A Gen Y will in aggregate never see a 75% high three pension, and this guy is being expected to live on 50% of his income just so he could substantiate his own living past 70, all while taking an inflation-adjusted paycut from the boomers time? As it turns out, early boomers lived on 100% their net income and fell back on their pensions, a Gen Y living on 100% net income (again an aggregate paycut from the boomer) is just hosed. This country's going through a social contract overhaul that will become apparent and UGLY once the boomers retire en masse.

As it stands Gen Xrs and beyond are outright incapable of retiring as a generation in the current construct. People don't fall off the grid just because they are incapable of retiring, it just becomes more of a social burden. Private industry can't/won't offer pensions? You just forced the europization of america. You can't have it both ways. As a Gen Y, I'm cool with that, I know I'm not getting rich and I sure as heck ain't gonna spend my thirties living like a monk like I did in my twenties, foregoing the pursuit of LIFE while trying to attain the prescribed education requirements that amounted to a de facto high school diploma, with underemployment at the end of it for my troubles. I'll take the proverbial harley now and screw retirement; if I can't get there with 25% savings at the age of 30, I can't afford it outright.
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Old 08-22-2009, 02:03 PM
 
Location: NJ
2,212 posts, read 6,676,804 times
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Quote:
Originally Posted by car54 View Post
I was watching "Woodstock, Then and Now" the other night, and it struck me....I know why gen X&Y hates us. Their music sucks and they're jealous!

So many tunes from the Woodstock era are used in contemporary films and advertising....the stuff is still fresh and unaffected by the passage of 40+ years.
You do realize don't you that the big musicians so lauded by the Boomers - Joplin, the Stones, Hendrix etc were all members of the SILENT GENERATION. They're not Boomers. You were just the guys who listened to them.

The music you deride, late '70's, early '80's - THOSE guys are Boomers.
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Old 08-22-2009, 04:54 PM
 
Location: Seattle
1,369 posts, read 3,105,212 times
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Hindsight,

For many of us the solution to the problem is to not have kids. It solves about 90% of potential financial problems that the world is facing (high health care, education costs) and alleviates so much financial pressure. I would rather live an upper-middle class yuppie lifestyle than live a frugal lifestyle just for the privilege of having children. The fact that kids turn upper-middle class young people into frugal people is just ridiculous, IMO. Between increased healthcare costs, saving for college, private school (or paying way more for a good school district), daycare costs (or the loss of one income) and household expenses, it's just SO much higher compared to a generation ago. By all accounts we make quite a bit of money, however, we are conservative. When I think of the expenses of having one or two children it makes me absolutely cringe.
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Old 08-22-2009, 06:22 PM
 
Location: Colorado Springs, CO
2,221 posts, read 4,944,721 times
Reputation: 1702
Quote:
Originally Posted by drshang View Post
Hindsight,

For many of us the solution to the problem is to not have kids. It solves about 90% of potential financial problems that the world is facing (high health care, education costs) and alleviates so much financial pressure. I would rather live an upper-middle class yuppie lifestyle than live a frugal lifestyle just for the privilege of having children. The fact that kids turn upper-middle class young people into frugal people is just ridiculous, IMO. Between increased healthcare costs, saving for college, private school (or paying way more for a good school district), daycare costs (or the loss of one income) and household expenses, it's just SO much higher compared to a generation ago. By all accounts we make quite a bit of money, however, we are conservative. When I think of the expenses of having one or two children it makes me absolutely cringe.
I chose to force my children to shoulder the burden of their own college educations, as I did myself. In my case, health care costs did not dramatically rise with kids...the reality is that the most expensive health care goes to the elderly as they near the end of life. Private school in the US is, for the most part, a luxury--the public school system, when augmented by attentive parents, does its job far better than the public schools in most of the rest of the world. For those that see child-rearing as a no-cost-spared process ending up with a BMW gifted at graduation from an ivy league school, yeah, it may be too expensive. But like all endeavors, you can get there comfortably without going Gucci. And of course having kids and raising a family is not done for the economics--the biggest return on investment won't show up on the family balance sheet.

The europeans have a similar dynamic going on, and yet they have the very french audacity to lament the cultural shifts that are occurring as their working generations are filled in by muslim immigrants from northern africa and atheists from formerly communist eastern europe.

The societal cost of not shouldering the responsibility for your own replacements is that maybe someone else that doesn't look like you or share your mores will fill in the gaps in your place. ¿Puede hablar español, amigo?
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Old 08-22-2009, 07:33 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,564,356 times
Reputation: 4343
Quote:
Originally Posted by Bob from down south View Post
I chose to force my children to shoulder the burden of their own college educations, as I did myself.
This is typical for white lower-middle class to middle class families. But it has a number of disadvantages. Your kids are in a sense your greatest retirement savings, helping them at their start of their life is likely to pay off towards the end of yours. Refusing to help them because it will "make them strong" is likely to be meant with a similar attitude when you're older.

Of course the opposite extreme has negative consequences too, giving your kids everything they want is not good. But helping your kids with college, buy a home, start a business, etc is a way of giving them a head start in life. As an investment its likely to pay off in numerous ways.

I think a lot of boomers are going to be surprised at how unhelpful their kids are when they age, but after continuously telling their kids that they should stop whining and and "do things themselves" it should be expected.
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Old 08-22-2009, 07:37 PM
 
Location: southern california
61,303 posts, read 81,236,584 times
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interesting, i see 2 types of CDF posts, those complaining old folks wont retire and posts complaining that we gota pay old folks that do retire.
the driving message --get out of my way old man make some room.
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Old 08-22-2009, 07:46 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,564,356 times
Reputation: 4343
Quote:
Originally Posted by Huckleberry3911948 View Post
interesting, i see 2 types of CDF posts, those complaining old folks wont retire and posts complaining that we gota pay old folks that do retire.
Boomers may delay retirement, but they are still likely to retire at some point.

In terms of paying for old folks when they retire, there are a number of issues. Why are the younger generations going to have an interest in supporting them, when they've done so much to remove assistance to them when they were starting out their lives. Basically, after the boomers climbed up the ladder they knocked it over. Additionally, many of their entitlements are just too large. Although they paid into pensions systems, etc they did not do so enough to support their entitlements so something has to give. Either the younger have to produce more than they consume, or the entitlements have to decline. Anybody that thinks the former is going to occur is fooling themselves.
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Old 08-22-2009, 08:04 PM
 
Location: Central Ohio
10,560 posts, read 13,685,928 times
Reputation: 15475
Quote:
Originally Posted by Bob from down south View Post
I chose to force my children to shoulder the burden of their own college educations, as I did myself.
Parents do not owe their children a college education.

If you want to, and if you can, that's great but parents do not owe it.

You do owe them moral support and maybe dinner on Sunday if they come home.
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