Quote: People don't know how to handle money. We don't teach it in the schools. Personal finance should be taught in high school. I see lots of middle-class people living paycheck to paycheck just wasting money left and right, neglecting their own safety net. For a country that supposedly has a "shrinking middle class" we sure have a lot of people who waste their money at Starbucks. We sure have a lot of people who drive nice cars. It's a lot more than 1% of the population.
There's no excuse for borrowing money to buy an expensive car. I see commercials for companies like BMW which tout their financing options. No one has any business buying a BMW if they have to finance it. If you're borrowing money to buy a BMW or a Mercedes, that is a stupid choice.
So many of these struggling middle class people are struggling because of their own personal choices. I guarantee you, half of the people in this country have enough income that they could get rich if they had the discipline. It just takes time and discipline.
I have a lot of sympathy for truly poor people, and I think we should help them a lot more than we do. But I have a lot less sympathy for the mass of people who have good jobs and cannot get ahead because they make stupid choices and don't know how to handle money.
Very well put. :thumbsup:
I remember a while back working with a guy that is the very example of this. At the time (early 2000's) we were both earning roughly $65,000.00 per year. I can remember him coming in to work at night (we worked the overnight shift) with a cup of Starbucks coffee and talking about him and his wife going out to a sushi bar for dinner.
However, he would also talk about getting utilities cut off for being late on his bill, talk about being behind on car payments, etc. He also talked about "floating" and eventually bouncing checks. Now the company that we were working for at the time offered medical insurance, and it wasn't exactly "cheap" but it was reasonable, especially for a family. Instead, he opted out of the insurance plan, and when he and his wife decided to have a baby, they used medicaid.
I remember him talking about getting a pretty good sized tax "refund" and rather than catching up on his bills or putting money in the bank, he went out and got a new
gaming PC.
He used to drive his other three children to and from school in Mandarin from the Westside because it was "a better" school (read "white" school).
His actions eventually cost him his job because we were required to maintain a security clearance, and part of that clearance involves having a good credit history.
The point is, he was trying to live an "upper class" lifestyle on his middle class income. Rather than save or invest part of his earnings he spent recklessly to "fit in".
One thing that I find kind of ironic. Prior to him getting fired and losing his job I do remember that he had a John Kerry bumper sticker on his car.
Quote: People don't know how to handle money. We don't teach it in the schools. Personal finance should be taught in high school. I see lots of middle-class people living paycheck to paycheck just wasting money left and right, neglecting their own safety net. For a country that supposedly has a "shrinking middle class" we sure have a lot of people who waste their money at Starbucks. We sure have a lot of people who drive nice cars. It's a lot more than 1% of the population.
There's no excuse for borrowing money to buy an expensive car. I see commercials for companies like BMW which tout their financing options. No one has any business buying a BMW if they have to finance it. If you're borrowing money to buy a BMW or a Mercedes, that is a stupid choice.
So many of these struggling middle class people are struggling because of their own personal choices. I guarantee you, half of the people in this country have enough income that they could get rich if they had the discipline. It just takes time and discipline.
I have a lot of sympathy for truly poor people, and I think we should help them a lot more than we do. But I have a lot less sympathy for the mass of people who have good jobs and cannot get ahead because they make stupid choices and don't know how to handle money.
I don't think it's that people don't know how to handle money. I think it's that they prefer comfort to safety. And I think most people are this way to an extent.
My wife and I would be much better off if we didn't have kids. But we did, and I think we're happier than if we made personal choices that wouldn't have given us children. We had to buy a new house because our old one was falling apart. Sure, we could have chosen to rent an apartment instead. But we both feel a family needs a home, not an apartment. Of course we've made sacrifices. I gave up on my bachelor's degree so my wife could finish college, and so we could put money into a college fund for our kids. Of course if I lose my job, that sacrifice will hurt more because finding another job will be difficult (and will likely pay much less)
Some frugality should be expected. But there's a limit to it. Comfort and Safety need to be balanced. Having money in the bank makes you safe, but if you're not comfortable safety doesn't mean a whole lot. That sort of balance is a lesson I'm not sure can be taught, because for everyone it's different. And it's a hard lesson to learn.
Quote: I guarantee you, half of the people in this country have enough income that they could get rich if they had the discipline. It just takes time and discipline.
That is an outright lie, especially for those people that have children.
Quote:That is an outright lie, especially for those people that have children.
Please give an example of how that is an "outright lie".
Is the decision to have children or not a decision? Sometimes decisions have consequences, and if those consequences result in a poor situation, it's all on the people who made such decisions, not on the "evil rich".
If someone age 25 earned an income of say $35,000.00 per year and put a percentage of that away in an interest bearing endeavor, would they not be able to reach the "millionaire" goal? How long would it take for them to reach that goal?
Saving and investing is not taught, but is available to everyone.
Putting money into a savings or money market account at the very least is better than spending it on useless stuff. If someone works for a company that offers a 401k with matching contributions, then they are a fool if they don't participate. Guess where those 401k plans invest? It's in the "evil" corporations.
So how do the "rich" get there? It's not from spending money on "comfort" it's about investing money on "safety".
Quote:Please give an example of how that is an "outright lie".
Is the decision to have children or not a decision? Sometimes decisions have consequences, and if those consequences result in a poor situation, it's all on the people who made such decisions, not on the "evil rich".
If someone age 25 earned an income of say $35,000.00 per year and put a percentage of that away in an interest bearing endeavor, would they not be able to reach the "millionaire" goal? How long would it take for them to reach that goal?
Saving and investing is not taught, but is available to everyone.
Putting money into a savings or money market account at the very least is better than spending it on useless stuff. If someone works for a company that offers a 401k with matching contributions, then they are a fool if they don't participate. Guess where those 401k plans invest? It's in the "evil" corporations.
So how do the "rich" get there? It's not from spending money on "comfort" it's about investing money on "safety".
Having a 401k or money market accounts does not make someone rich.
Quote:Please give an example of how that is an "outright lie".
Is the decision to have children or not a decision? Sometimes decisions have consequences, and if those consequences result in a poor situation, it's all on the people who made such decisions, not on the "evil rich".
If someone age 25 earned an income of say $35,000.00 per year and put a percentage of that away in an interest bearing endeavor, would they not be able to reach the "millionaire" goal? How long would it take for them to reach that goal?
Saving and investing is not taught, but is available to everyone.
Putting money into a savings or money market account at the very least is better than spending it on useless stuff. If someone works for a company that offers a 401k with matching contributions, then they are a fool if they don't participate. Guess where those 401k plans invest? It's in the "evil" corporations.
So how do the "rich" get there? It's not from spending money on "comfort" it's about investing money on "safety".
So lets play the game.
Someone makes 35k a year. Take home is about 29k. Maybe they own a modest home. So lets say between a mortgage, property tax and homeowners insurance it's 1000 a month. So you are down to 17k a year. Add in basic utilities (electric, water, internet, phone). There is at least 200 a month, probably higher in the summer. So you are down to 14k. Add in insurance (health, life, auto) and there is probably another 200 a month. So we are down to under 12k a year. This isn't including food or gas. There is probably another 500 a month at least. Down to under 6k a year to invest. And this is assuming the person does not have any revolving debt like credit cards. Or an auto loan. And this does not account for incidental expenses like auto and home repairs, unexpected health care costs.
So how is this person becoming a millionaire?
Quote:So lets play the game.
Someone makes 35k a year. Take home is about 29k. Maybe they own a modest home. So lets say between a mortgage, property tax and homeowners insurance it's 1000 a month. So you are down to 17k a year. Add in basic utilities (electric, water, internet, phone). There is at least 200 a month, probably higher in the summer. So you are down to 14k. Add in insurance (health, life, auto) and there is probably another 200 a month. So we are down to under 12k a year. This isn't including food or gas. There is probably another 500 a month at least. Down to under 6k a year to invest. And this is assuming the person does not have any revolving debt like credit cards. Or an auto loan. And this does not account for incidental expenses like auto and home repairs, unexpected health care costs.
So how is this person becoming a millionaire?
$100 per month in a mutual fund for 40 years. But that takes discipline and most people dont have that.
Quote:$100 per month in a mutual fund for 40 years. But that takes discipline and most people dont have that.
You listen to too much Dave Ramsey.
Show me something, anything to back this claim up.
Quote:You listen to too much Dave Ramsey.
Show me something, anything to back this claim up.
I'll save you the time. You won't be able to. It's a fantasy.
Quote:I'll save you the time. You won't be able to. It's a fantasy.
Just because you couldn't do it doesn't mean anything.
The hardest words in the English language are "no" and "it's not in the budget."
And man who say it cannot be done should not interrupt man doing it.
Quote:Putting money into a savings or money market account at the very least is better than spending it on useless stuff. If someone works for a company that offers a 401k with matching contributions, then they are a fool if they don't participate. Guess where those 401k plans invest? It's in the "evil" corporations.
IMO, putting money in a 401k right now is slightly less profitable than putting it under your mattress. Our retirement is being sacked away into a savings account, and once we have enough amassed that we'll qualify for the really high-interest CDs, that's where it goes.
My get rich plan is to live simple stay out of debt and have my home paid for before I'm 45.
I'm on my way
Investing is great if you assume the markets not rigged or the state won't one day confiscate it all to pay for their reckless spending.
Quote:Just because you couldn't do it doesn't mean anything.
The hardest words in the English language are "no" and "it's not in the budget."
And man who say it cannot be done should not interrupt man doing it.
You are right. I couldn't do it. And neither could you or anybody else.
The $100 a month for 40 years is a Dave Ramsey fantasy that has been disproved.
In order to accomplish that, you would have to get a 12% return, which is completely unrealistic.
Most rich people have just stayed rich from their parents money. Let's not pretend most have earned it with extreme saving on low wages. Or they have the right networks to get the high paying jobs.
Quote:Really high-interest CDs? Are those the ones investing in unicorn futures?
The S&P 500 gained on the average about 3% per year since 2000. That's not great, and CDs don't pay close to that. Some mutual funds have a better record, and unless you know a stock that is going to skyrocket, that's where your money should go.
$100 per month for 40 years is not going to get you $1 million. Certainly not at 3% per year.
Purely in my opinion, CDs are a much safer investment over the long term than the stock market is. With a CD, you know your return. With a 401k...well, let's just say that a former coworker of mine lost about $50k the day that the stock market crashed by 700 points in 2008(?). Delayed his retirement by about a year. I don't want to be in his shoes. I don't want be stuck working until 66 because the market tanked and took my 401k with it.
I'm don't particularly care about being a millionaire, tbqh. I want my wife and I to live comfortably and not have to move for a new job in a new city every three years. That's good enough for me. If the minimum wage jumps by anywhere from 60-90% in an extremely short amount of time, artificial inflation might leave me no choice but to end up with a couple million dollars.
Quote:Maybe that's true in Australia.
The US is one of the least socially mobile countries in the world. More so than Australia.