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If you're feeling bad about your financial situation, this will make you feel better.
I have an uncle who has spent nearly all of his savings, including his retirement and taking an lump sum pension on lottery scratch off tickets. He also puts tickets on his credit card but doesn't quite understand the concept of paying interest and how interest compounds, etc.
His parents enabled him his entire life, and when they passed away and he was on his own, he was like a child.
Maybe someday he'll hit the $10 million dollar prize and all his finanical worries will be over but until then, it's an incredibly frustrating situation for the family.
Someone like that will even blow $10 million pretty quickly.
I know of someone who inherited 700K around 10 years back. He blew through the money, gambling in Reno and buying a lot of Disney paraphernalia, and various other assorted junk. This, even though he lived in an expensive area, was HIV+, and into his 50s. He could have set himself up to be comfortable, maying drawing an income from the inheritance (it was invested in municipal bonds) and then maybe working part time. Instead, he was stressed out and living payday to payday.
Someone like that will even blow $10 million pretty quickly.
I know of someone who inherited 700K around 10 years back. He blew through the money, gambling in Reno and buying a lot of Disney paraphernalia, and various other assorted junk. This, even though he lived in an expensive area, was HIV+, and into his 50s. He could have set himself up to be comfortable, maying drawing an income from the inheritance (it was invested in municipal bonds) and then maybe working part time. Instead, he was stressed out and living payday to payday.
Studies have show that people who inherit, win the lottery are more likely to lose that money fast then someone who actually had to work for it.
Studies have show that people who inherit, win the lottery are more likely to lose that money fast then someone who actually had to work for it.
I am going to butcher it so I won't try to quote him, but Warren Buffett explained why he wasn't going to leave hoards of $ to his children -- he didn't want to deprive them of the satisfaction of earning itthemselves. I think that's brilliant. When you've worked hard for your pennies, nickels, and dimes you take pride in that money and are more likely to covet it, protect it, and make wiser decisions with it. After all.... you WORKED for it! When given a large sum of money it almost doesn't seem real to a lot of people; it's like they're playing Monopoly and they'll spend, spend, spend. Why not, right?! It's FUN Not to say there aren't plenty of folks who are good with their inheritance and manage the money they are gifted wisely, but I do see why the above quote is true. Gifted money feels like a credit card.... it isn't "real".... it isn't "tangible".... you didn't give up your time and energy to earn it. Interesting.
Location: where you sip the tea of the breasts of the spinsters of Utica
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I never asked him, but the one really wealthy guy I knew (inheritance) didn't seem all that happy to me. He's a fundamentalist Christian, maybe that had something to do with it.
I actually agree, but I hate to break it to you guys that median family income in the US is about $55k, and invidiual income is $32k for those over 25 years old. That means that half of the people in the US who are over age 25 and employed make less than $32k a year. Being broke if the water heater goes out is middle class in the US; therefore "rich" begins at the point where a broken water heater plus a vacation is no big deal and ends at the point where you have a higher net worth than something like 1/7 (~30 million) of the working people in the entire country.
I think that the US's horrible income disparity is disturbing; not that definitions of "rich" are disturbing.
It's sad and awful thst so many don't have more than they do and very likely they never will...
but that doesn't mean they get to re-define what middle class is to accommodate the math of
having so many more poor than there should be.
Now you're finally getting back to the actual problem.
But changing the definition of middle class to include what used to be just plain poor
to make all these poor people feel better about themselves isn't the solution.
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ps: If you can't manage to do the WH repair without stressing your financial world
then you probably shouldn't be a homeowner at all.
You hit it on the head. Part of the problem is that a number of people tend to live beyond their means. You should be able to take care of all expenses, have an emergency stash, and be squirreling away a nice amount for your retirement, and maybe the kid's college fund. If you are not as described, you are living beyond your means, should not have kids, and should live in a cheaper abode.
Last edited by goldengrain; 09-03-2012 at 07:19 AM..
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Not to say there aren't plenty of folks who are good with their inheritance and manage the money they are gifted wisely, but I do see why the above quote is true. Gifted money feels like a credit card.... it isn't "real".... it isn't "tangible".... you didn't give up your time and energy to earn it. Interesting.
