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A lot of people go from rainy day until the next rainy day. If everyone had all of the conditions of the Dave Ramsey plan then none of us would need the advice and inspiration of Dave Ramsey.
Do you think that people do not know how to think, do not want to work, do not want to get ahead?
I will tell you what...you show me a total orphan with no family who has a job with USPS and a constant raise or cost of living adjustment who lives in the garage apartment of the little old widow lady and buys 1000 dollar cars at garages sales that run without repairs and I will show you the person who can retire at 65 with 19 million dollars. And that will only be as soon as Dave Ramsey unveils that 12% annual return mutual fund.
I see the miserable misers with the envelope full of coupons at the grocery checkout and I see the party animals at the lake. I know which camp I want to be in.
I will say, 40K, even in the south, is treadwater money even for a single individual.
I'm calling you out on this one. That's BS. I live in high cost California (SF Bay Area) and only make 52K per year. I sock away over 12K in my 401K and will have saved a few thousand in cash as well. There's no reason why a single person can't live on 40K if they don't have any unusual expenses.
I'm 41 and have a net worth in the low 6 figures. I don't get what's wrong with people .
I know. I know. I'm one of those statistical outliers on the CD who actually saves money. I find this frustrating because I don't see why it's so hard to save if you have a half decent income (and 40K definitely qualifies as decent).
Hey all, thank you for contributing mostly intelligent replies to this topic.
How many of you would say that the problem in the US has mostly do do with individuals' spending habits, as opposed to systematic failures of the banks/fed etc to regulate the situation accordingly?
I'd say it's 80% individual spending habits/dysfunctional cultural attitudes about spending money. 20% irresponsible government/systemic/bank failures.
The government and the banks in other countries are corrput, too....yet people in other countries manage to save more than Americans do.
Ultimately, the ciitzens are responsible for what happens in their country. When the citizens stop being vigilant, you get the mess we've got.
Right. I'd like to see how many people are making say over 100k but can't come up with 2k.
Most probably could....but you'd be surprised at how many couldn't. In her book, The Difference, Jean Chatzky referred to these folks as "high income paycheck to paychecks".
They interviewed 1900 people and extrapolated about the rest of us 34 million?
That's a pretty big far leap. And we also don't know how they picked who they picked to interview. We don't know if this is a legitimate cross section of people in this country.
That's why I call this bogus....
Actually if the got enough cross sections of each demographic (race/ethnicity age, city/suburban/rural) 1900 is more than enough people.
And he is the difference, the Harley is here and now. The Roth can get wiped out next week.
You can live rich and die poor or you can live poor and you can die rich. But now there is a new paradigm..you can live poor and you can die poor.
Squeeze your nickels and enjoy that IRA 401K Roth or whatever you call it. I would sooner own a RV or a horse if that what what I liked.
See, this is what I don't get. You set this up as an either/or all-or-nothing proposition.
Most people earn enough money where they can blow some and still save for the short and long term. Even frugal people do blow money on dumb / fun stuff.
It's like another poster said, Americans have this entitlement mindset. They think...I went to college, I should have XXX lifestyle. Or they simply want XXX lifestyle. The problem with this whole consumer entitlement attitude is that once you get a few rungs bove povery level, it doesn't even make you happy.
So, not only are people bad at managing money, they are bad at predicting what will make them happy. Don't believe me? Ask any psychologist who studies the relationship between money and happiness. Once a very basic lifestyle is acquired, the stuff money can buy doesn't bring more happiness.
It turns out that money actually can buy happiness, but not a lot of it. At some point, well under $100,000, the happiness value of a dollar starts to plummet, according to Richard Easterlin, economics professor at University of Southern California. This is because social interactions impact happiness more than money does.
A lot of people go from rainy day until the next rainy day. If everyone had all of the conditions of the Dave Ramsey plan then none of us would need the advice and inspiration of Dave Ramsey.
Do you think that people do not know how to think, do not want to work, do not want to get ahead?
I will tell you what...you show me a total orphan with no family who has a job with USPS and a constant raise or cost of living adjustment who lives in the garage apartment of the little old widow lady and buys 1000 dollar cars at garages sales that run without repairs and I will show you the person who can retire at 65 with 19 million dollars. And that will only be as soon as Dave Ramsey unveils that 12% annual return mutual fund.
I see the miserable misers with the envelope full of coupons at the grocery checkout and I see the party animals at the lake. I know which camp I want to be in.
Sorry, but I find your mentality to be ridiculous. How do you know the people with the coupons are miserable and that the partiers are happy? Those are assumptions on your part. Is it not possible to be a coupon cutter and a partier at the same time?
Maybe when you come out of your black/white mindset, you'll see some other possibilities.
BTW, I DO agree with you on Dave Ramsey saying you can get 12% in a mutual fund. it's possible, but not likely. However, even a really boring mutual fund like Vanguard Balanced Index has gotten almost 7% over the last 15 years...and the last 15 years were not known as a stellar time for investment returns.
Someone making 30K per year who puts $250 a month in a fund like Vanguard Balanced Index and gets 6.88% would have:
$17,945 aftter 5 years.
$43,233 after 10 years.
$129,086 after 20 years.
$299,576 after 30 years.
$638,138 after 40 years.
Not luxury, but not bad. And I assumed the same dollar amount of $250 per month though a person's entire life. I just don't get what's so hard about savving a lousy $250 a month. Drop the cable TV. Skip the cat or dog (or the extra cat or dog since people don't seem content with just one pet anymore, get a roommate, skip the $4 coffee, etc.) It's not that freakin' hard!!!
mystic,
When you spend the money, you get the stuff.
If you Scrooge, you are Scrooge.
My problem is I suspect your defininition of a Scrooge is way off and skewed from reality.
Some day maybe you will understand that once you have a certain level of stuff, you will have "enough"...and having more of it doesn't add to your happiness.
Again, I appreciate your thoughts and considered replies but I wonder where you are coming from?
Do you think that real life is some Candyland game and everyone has enough more and it is just a matter of how wisely they handle that excess of money?
The single Mom working a minimum wage job and then another minimum wage job does not exactly have the choices to run the Dave Ramsey plan.
Perhaps in 1958 everyone with a will could run the Dave Ramsey plan. But this is a long way from 1958.
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