This 4×6 index card has all the financial advice you’ll ever need • Hacker News Board

Re: This 4×6 index card has all the financial advice you’ll ever need

#201

Post by alok-g » Tue, Sep 17, 2013, 4:49 AM UTC

stephenbez wrote: post #189

alok-g wrote: post #185

Earlier quoted context omitted.

>> ... Bump it to 35% and you'll retire after 25 years. Bump it to 50% and retire in 17. Bump it to two-thirds and retire in 10 years. Can you/someone please point to the maths behind this? It sounds to me there are some assumptions about returns on investments and inflation rates.

The math is covered here: http://earlyretirementextreme.com/ Basically the thought is that 20-25 years of living expenses will generate enough income for you to early retire on. If you make 100k (post tax) with a 20% savings rate, you save 20k, and have living expenses of 80k. Ignoring future compound growth, for each year you work, you save 1/4 a year of living expenses. If you go the other extreme, and have 66% sav…

I'll have to read the book for more but the math you explain seems incomplete. The earlier I retire, the more would be my expected number of years in retirement (assuming a given life expectancy). If in one scenario my retirement is 40 years away and I need to save for 20 more years, then in he other scenario where I retire in ten years, I need to save for fifty! That's a factor of 2.5 in this example!

Ignoring growth rates and inflation is also a huge simplification. E.g. 3% yearly growth doubles your money in about 24 years. So it may again be a factor bigger than two between the two scenarios above.

Re: This 4×6 index card has all the financial advice you’ll ever need

#202

Post by refurb » Tue, Sep 17, 2013, 4:49 AM UTC

WildUtah wrote: post #176

coldtea wrote: post #32

Earlier quoted context omitted.

> would include never having a mortgage, which would be a huge lost opportunity for many A lost opportunity? If you can afford a house easily buy one, if you cannot afford it a mortage is anything but a huge opportunity. http://www.jamesaltucher.com/2011/03/why-i-am-never-going-to... http://www.jamesaltucher.com/2011/05/why-i-would-rather-shoo...

The best darn mortgage v. rent calculator I've ever seen: http://www.nytimes.com/interactive/business/buy-rent-calcula... It all depends on your circumstances.

This one is actually a little better...

http://michaelbluejay.com/house/rentvsbuy.html

Re: This 4×6 index card has all the financial advice you’ll ever need

#203

Post by Jormundir » Tue, Sep 17, 2013, 4:55 AM UTC

staccatomeasure wrote: post #156

dragonwriter wrote: post #155

Earlier quoted context omitted.

> Poor people: save money and pay off credit card debts. So, "poor people, get surplus income". Or, equivalently, "poor people, stop being poor". > And saying poor people couldn't save even a dollar is nonsense. If you can reliably meet the requirements of life without charity or depletion of reserves, you arguably aren't meaningfully poor. Poor people can save sometimes , but that's mostly saving a reserve for the b…

No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots tha…

Don't forget to tell them to let their babies die, those things are expensive. Parents too. Taking care of your aging folks can be expensive. Stop taking care of your parents. Any happiness you have now is because you're in the thick of a poor decision that is making you stay poor. Stop smiling, dumb shit makes you smile. Stop going to the doctor. Stop paying for vegetables, can food is cheaper. Stop the tendencies you developed by being raised by worthless, stupid poor people. Stop hanging out with your poor friends. Stop hanging out with your poor ass family. Stop being a fucking human being, open your poor, dumb fucking eyes and make a dollar.

Re: This 4×6 index card has all the financial advice you’ll ever need

#204

Post by lutusp » Tue, Sep 17, 2013, 5:01 AM UTC

mechanical_fish wrote: post #149

jellicle wrote: post #80

There are a couple of good parts about this post. The first is the HN comments, which are an unintentional fountain of hilarity. But the second is the assumptions. 50% of the US population can't afford to put even a dollar into any sort of investment security. Of the 50% of the public that does own some sort of security, most of them are in the three-figures range. This index card, without realizing it at all, has ta…

The percentage of US workers with access to a retirement-benefits plan is 71%. 57% of all US workers participate in such a plan. (Source: U.S. Bureau of Labor Statistics, 2009 National Compensation Survey, http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf ) In Table 2, it says that even 15% of the lowest income decile - people making less than 90% of workers - find a way to participate in a retirement plan. Here'…

> Anyone making over $60k per year could [...] save 20% of their income without dropping below the median household income of $50k.

20% of 60k is 12k, 60k - 12k = 48k. So no, the claim isn't true for the most trivial of reasons.

Re: This 4×6 index card has all the financial advice you’ll ever need

#205

Post by jjoe » Tue, Sep 17, 2013, 5:09 AM UTC

First advice: max your 401k. That's selfish.

That's what Wall Street wants you to do. Reality is whomever manages the funds has only one short-term goal in mind: year end bonus. It's very common for traders to move on shortly after bonuses are given out leaving "cooked" books for the next trader to deal with. The plan is always to never get caught holding the short term strategy book.

I find the typical trader archetype to be repugnant. There's so much of it that goes against technical-minded people with even the tiniest sense of ethics. If you're financially disciplined you're better off investing elsewhere.

Re: This 4×6 index card has all the financial advice you’ll ever need

#206

Post by Jormundir » Tue, Sep 17, 2013, 5:12 AM UTC

azelfrath wrote: post #173

staccatomeasure wrote: post #156

Earlier quoted context omitted.

No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots tha…

I could not agree with you more had I said those words myself. A year ago I had a great job as a sysadmin, then I got laid off. Shit happens. I got a job doing landscaping for $10 an hour til I could find something better, and when winter came I worked in a restaurant serving people in the city. What did I do? I stopped eating out and put my cooking skills to use saving money by eating in. I cut out cable, lowered my…

You didn't learn much at all then. To think that being poor and having a tendency to make bad decisions, is just a matter of having developed negative personal habits throughout your life is just plain naive and ignorant.

Poor people are not just personally poor, they were raised by poor parents who taught them different values, albeit seemingly dumb ones (though I know a lot of poor people who are wayyy happier than a lot of wealthy people I know following the note card). They were taken to crappy schools, if their parents took them, or made them go at all. They were fed all sorts of unhealthy food their whole lives. They're lied to relentlessly by businesses saying things are healthy, will help them, or are good decisions (always campaigns run by wealthy people taken advantage of poor people).

They have everything around them working against them, and some dumb, naive, asshat, born to the middle class, thinks (s)he was poor for a little while and it was kind of enlightening and fun, ignorant guy telling them to put money in a 401k. Will it put rims on my car, because that would make me happy? When I'm 65? Fuck that.

Re: This 4×6 index card has all the financial advice you’ll ever need

#207

Post by staccatomeasure » Tue, Sep 17, 2013, 5:14 AM UTC

Jormundir wrote: post #203

staccatomeasure wrote: post #156

Earlier quoted context omitted.

No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots tha…

Don't forget to tell them to let their babies die, those things are expensive. Parents too. Taking care of your aging folks can be expensive. Stop taking care of your parents. Any happiness you have now is because you're in the thick of a poor decision that is making you stay poor. Stop smiling, dumb shit makes you smile. Stop going to the doctor. Stop paying for vegetables, can food is cheaper. Stop the tendencies y…

Don't let your babies die, but really try not to have them if you can't afford them.

I never said people's poor decisions made them poor, I'm saying they can help get out of poverty by making good ones.

And if you have kids, yes, make a dollar. You brought life into this world and you have a responsibility. You can let your kids get stuck in a cycle of poverty by feeling like a victim or you can bust your ass to try and get them out of poverty. If I had a child in poverty I wouldn't be smiling, because I'd know that I brought life into this world at a disadvantage and I'd work my ass off until I did what was right. So you can keep telling poor people that they're helpless, or you can, like I do, believe they have a great perseverance and aptitude that they need to tap into and provide a better life for their children.

I'm not saying they need to do it alone; quite the opposite - we as a nation need to believe in the ability of our disadvantaged to become productive members of society and promote programs to help them get there. But we do not need to act like any nudge towards taking matters into your own hands is an implication of blame. It is not. It is a suggestion that betting your children's future on government intervention is a colossal mistake. I'll vote for legislation that enables the poor, I'll pay higher taxes and donate to 401cs and get the word out, but there is no single greater factor in the equation of your children's happiness than you yourself.

Re: This 4×6 index card has all the financial advice you’ll ever need

#208

Post by dionidium » Tue, Sep 17, 2013, 5:19 AM UTC

kamaal wrote: post #194

dionidium wrote: post #85

Earlier quoted context omitted.

The idea that your retirement years are a better time to live than your 20s and 30s is a serious mindset problem.

And at the same time, saving nothing in your 20s and 30s. Having all the fun in the world, and then expecting the government to take care of you when you are old is also a very serious mindset problem.

Luckily, I didn't suggest that.

Re: This 4×6 index card has all the financial advice you’ll ever need

#209

Post by Jormundir » Tue, Sep 17, 2013, 5:33 AM UTC

staccatomeasure wrote: post #207

Jormundir wrote: post #203

Earlier quoted context omitted.

Don't forget to tell them to let their babies die, those things are expensive. Parents too. Taking care of your aging folks can be expensive. Stop taking care of your parents. Any happiness you have now is because you're in the thick of a poor decision that is making you stay poor. Stop smiling, dumb shit makes you smile. Stop going to the doctor. Stop paying for vegetables, can food is cheaper. Stop the tendencies y…

Don't let your babies die, but really try not to have them if you can't afford them. I never said people's poor decisions made them poor, I'm saying they can help get out of poverty by making good ones. And if you have kids, yes, make a dollar. You brought life into this world and you have a responsibility. You can let your kids get stuck in a cycle of poverty by feeling like a victim or you can bust your ass to try…

Now that sounds more sensible, and I agree completely that ultimately you can only help someone who wants to be helped.

Your earlier comments were showing that you don't understand the poverty problem at all and you don't know how to motivate people at all. The problem is not that poor people are constantly choosing to be poor, or making no choice and allowing themselves to fall into poverty, but that they are raised in poverty. Being raised poor means all sorts of things: you are taught poor values by your parents, you likely get a terrible education, you likely only have access to be friends with fellow poor people, you probably eat poorly, and worst of all your poor parents and poor friends have reinforced your entire life that these poor decisions you're making are actually good decisions.

You will never accomplish anything (or sound smart or practical at all) by slapping individuals in the face and telling them to make better decisions. They're told that these good decisions us well off people make, by their friends and by the vast majority of us well-offers, are actually making us terribly unhappy people (and in a lot of cases they're not wrong). The only way real change can happen is by addressing the cultural cycle of poverty, and by supporting, positively teaching, and motivating these people to make better decisions.

Re: This 4×6 index card has all the financial advice you’ll ever need

#210

Post by BrandonMarc » Tue, Sep 17, 2013, 5:43 AM UTC

dragonwriter wrote: post #161

staccatomeasure wrote: post #156

Earlier quoted context omitted.

No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots tha…

> No. Poor people cut out non-essentials, be more efficient, and save money. If you have surplus income after paying for essentials, you aren't poor.

Then you'd be amazed at what the government defines as "poor" now. Using data from the Census Bureau, the Department of Energy, and many other federal agencies, see this detailed report (tons of charts, numbers, and links to sources).

http://www.heritage.org/research/reports/2011/07/what-is-pov...

You may be surprised to see "poor" households usually include:

* the usual money-saving appliances (fridge, stove, microwave, coffee maker, clothes washer, dishwasher)

* plenty infotainment (2-3 TV's, DVD, VCR, stereo)

* money-draining luxuries (cable / satellite TV, xbox subscription, smart phone)

Yes, the last items are luxuries, if you're going to complain about poverty. Heck, I'm middle class and I don't have any of those three.

Let's talk about food, too. From the report:

Temporary food shortages have increased during the current recession but still remain atypical among poor households. During 2009, less than one poor household in five experienced even a single instance of “reduced food intake and disrupted eating patterns” due to a lack of financial resources.[26] Strikingly, only 4 percent of poor children experienced even a single instance of “reduced food intake and disrupted eating patterns” due to a lack of financial resources.[27]

Regrettably, most discussions of poverty in the U.S. rely on sensationalism, exaggeration, and misinformation ... an effective discussion must be based on an accurate assessment of actual living conditions and the causes of poverty.

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This is all to say, with concrete data, that people we consider "poor" tend to have the essentials and then some.