231–240 of 246 posts
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It's doable but you need investment skills. 5% after inflation is likely pie in sky for most people. You need a lot more nest egg in the current low interest rate environment. Also at 35 you will still need money to put children through college so the future expense is likely higher than your past experience.
University is free in my country. (And yes, it will be free as in beer, because I won't be going to work, or paying taxes.)
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He's right that all savings are someone else's debt. But, if that is your big sticking point, you can literally load up on the cans of pork and beans as your retirement fund. "Savings account" is an abstraction for that, and it's important to realize how abstractions leak and fail, but for most people the abstraction is just fine.
Savings accounts are not abstractions for loading up on cans of pork and beans. If everyone simultaneously did that, then stopped working, everyone could still eat. If everyone put money into a savings account, then stopped working, they'd all starve. I think this is a deeply meaningful distinction. "Saving for retirement" in the modern financial sense is really more akin to having your kids take care of you when you…
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Ramit Sethi's advice on this really rang true with me "Stop saving on lattes, that doesn't matter, negotiate a $5k+ per year pay increase instead"
Why wouldn't you do both?
But you have to be perceptive enough to see you are "buying" a retirement, not "denying" a Latte.
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First off, insurance companies do not invest annuity value in the stock market, for the same reasons you should not. i.e. - it is risky and a significant loss of capital without further contributions will result in you running out of money. The reason that you get crap all for your money, is that the insurance company is estimating your life expectancy, low risk asset returns, and then using both the investment retur…
You can just as easily turn that last statement on it's head: No insurance company should assume that for their entire retirement portfolio they can produce inflation beating returns without risking significant capital loss and subsequent penury. The reason I can flip the argument is because, ultimately, the value of your investment is irrelevant. If you are investing $10 billion and earn 10%, or you invest $1 mil an…
MMM has a philosophy that is mathematically sound, and might even work for some people. Unfortunately, it's proven to fail for just about everyone (the spend less, save more advice has been around since the industrial revolution, and it isn't working to well: the average American has $16k in credit card debt). The reason it fails is because it ignores basic psychology. The key quote in this article is: >>But simply c…
Not to mention that if everyone stopped spending money tomorrow, then the economy would crash, millions of people would lose their job - meaning both personal savings and government resources are crippled. Which means the chances of you having enough money and a state pension you can live off by retirement age is significantly reduced. While I'm not trying to argue that saving is a bad thing (clearly it's important t…
That number will be different for different dates/amounts from different people, but I can tell you that I have saved pretty consistently and aggressively over the last twenty years, and there's nothing out of the ordinary with my savings schedule - no huge gluts just before a crash or anything like that.
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Not to mention that if everyone stopped spending money tomorrow, then the economy would crash, millions of people would lose their job - meaning both personal savings and government resources are crippled. Which means the chances of you having enough money and a state pension you can live off by retirement age is significantly reduced. While I'm not trying to argue that saving is a bad thing (clearly it's important t…
> Not to mention that if everyone stopped spending money tomorrow, then the economy would crash, millions of people would lose their job This is a poor argument promoted by the media in the last 50 or 60 years. There is no way in which everyone will stop spending money tomorrow. If something like this will ever happen (people spending less) it will happen gradually and the economy will have time to change.
Nobody is suggesting that everyone will stop spending tomorrow. However if an article discusses that people should save instead of spend, then the next logical discussion would be what happens if everyone takes that advice.
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Well, good for you and all that, I mean that seriously. But I'm not confused; I think it is a bit minimalistic to not have a cell phone. A new laptop could be some $500 Dell, a rifle could be anything, so not I wasn't thinking of that as something akin to a middle class style, especially if that's basically it. :)
Of course, you are free to think that not having a cell phone is minimalistic. I personally think of it as very liberating. I bought a brand new MBA ($1300), Canon 60D+Lens (Right on $2k) and a Remington 700 30/.06 ($1200), so I'm not without stuff, I just pick and choose the stuff I want and don't want. We're all free to do that, and I think a lot of people forget that. It seems like you'd much rather complain about…
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Of course, you are free to think that not having a cell phone is minimalistic. I personally think of it as very liberating. I bought a brand new MBA ($1300), Canon 60D+Lens (Right on $2k) and a Remington 700 30/.06 ($1200), so I'm not without stuff, I just pick and choose the stuff I want and don't want. We're all free to do that, and I think a lot of people forget that. It seems like you'd much rather complain about…
I'm not complaining that it wouldn't work for me. But you posted your experience in way that I think was really not showing that this is something realistic for most people but kind of as a way, let's be honest, bragging about your acetic take on income. So don't take this the wrong way, but I think it's a little disingenuous given what you were responding to. :)
Of course my way doesn't work for everyone, but I'll bet there is a way that works for others (that likely doesn't work for me).
I'm not saying everyone should do it my way, I'm saying everyone (including you!) should work hard to find the way that works for them (and it might be a way that nobody else has done yet...)