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62% of Americans Have Under $1,000 in Savings, Survey Finds

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Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#341

Post by kamaal »

toomuchtodo wrote: post #192
ghaff wrote: post #179

Earlier quoted context omitted.

It's "renters" BTW. [EDIT: Scratch the previous. I am, of course, wrong about the renters correction. Misread.] I'm not sure what he did to get your back up so much or when being a landlord became such a terrible evil. Also, "we" are not suffering. Yes he has a schtick and probably a pretty profitable one. His general advice is probably good for some but mostly isn't my thing because I like restaurants and traveling…

> when being a landlord became such a terrible evil. It's not being evil per se, but being an economic leech of sorts. The only reason people need to rent is because of the requirements to own (down payments, emergency funds to cover your mortgage in tough times so you don't lose your equity). Its an arbitrage between someone on financially sound footing versus someone not so. Disclaimer: My family has a landlord or…

>>It's not being evil per se, but being an economic leech of sorts.

I'm not sure from where this kind of thinking arises. Any investment is supposed to be a vehicle where your money increases without you having to directly work for it.

By that definition, all investments are wrong.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#342

Post by morgante »

toomuchtodo wrote: post #332
morgante wrote: post #330

Earlier quoted context omitted.

> Can you describe an asset (besides US treasuries) that you can be assured of its value in a volatile market? My point is emphatically not that your stocks will maintain their full value. But even at their lowest, their value will be more than enough to cover any emergency fund. A 50% drop on $100k will still leave you with $50k.

Which would ruin your investment outcome for years (if not decades, depending on the value of your portfolio at the event in question). If stocks take a loss that bad, you need the ability to not sell off to get liquid cash . That is what an emergency fund is for.

Ah, but now that your argument is based on decreasing returns we can just do expected value analysis.

Fortunately, many people have already done this, including Betterment: https://www.betterment.com/resources/personal-finance/safety...

Weighted by the probability of happening, you are better off investing all your money. Period.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#343

Post by kamaal »

toomuchtodo wrote: post #284
fancyketchup wrote: post #271

Earlier quoted context omitted.

> The only reason people need to rent is because of the requirements to own (down payments, emergency funds to cover your mortgage in tough times so you don't lose your equity) So, in other words, the landlord is selling a service? In exchange for a monthly fee, you don't have to do any of the crap (down payments, mortgages, property taxes, maintenance) it takes to own a home? Do you view farmers the same way? If it…

> Do you view farmers the same way? Providing food for free is next on my list. I don't need labor. I just need clean energy and automation.

Why not ask the whole world to slog themselves to death and serve you for free?

If they refuse to condemn themselves to such, you can always call them evil.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#344

Post by kamaal »

OrwellianChild wrote: post #314
t2015_08_25 wrote: post #309

Earlier quoted context omitted.

It's got nothing to do with deceit or skimming, it's power . There is no fraud, it would be simply taking advantage of people beyond the amount of value that I would be interesting in providing. Your allusion to a market that would correct the price doesn't account for a market which no tenants can enter because none of them can afford the entrance (a 20% down payment). They'll get the benefit of housing no matter ho…

Not trying to change your mind, and I appreciate the chance for a dialogue... Your perspective seems based on the idea that housing (shelter) is a basic need and should be provided for, and at some fundamental level I'm inclined to agree. (In my mind, it would be pretty basic housing...) I did want to call attention to your gas prices example... Gas prices are driven down to approximately the cost of getting more oil…

>>Your perspective seems based on the idea that housing (shelter) is a basic need and should be provided for

There is a very unfortunate problem with this line of thinking. It takes a lot of effort/money to build a house. You need to procure raw materials, pay for human labor and various other expenses, this is apart from acquiring land.

And the problem with this kind of 'equality for all' argument towards housing is you are assuming, that a good quality home should either come at a cheap price or some one being ready to pay and make up for everybody else. Both of them are problematic, why should every single economic link in the chain related to building a house suffer? Or why are we expecting some people to pay taxes and have houses built for every one else?

You don't have the right to anything unless the cost of achieving that is literally free or negligible.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#345

Post by mkempe »

hiram112 wrote: post #175
branchless wrote: post #150

Earlier quoted context omitted.

This. Now real interest rates are negative as inflation stats don't reflect reality. So 0.5% when prices are rising well above this. Almost nobody on hear is speaking of "real" rates. Disturbing.

I agree. Just because the price of eggs and computers aren't going up doesn't mean inflation is flat. The Fed's printing machine has massively (re)inflated almost all major assets including housing, education, and non-disposables. BTW, this is not the first time I've seen a comment mentioning this fact being downvoted. I would be more than happy to debate this with anyone who disagrees.

The price of eggs has been going up.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#346

Post by kamaal »

nemo44x wrote: post #105
david927 wrote: post #19

A lot of people here think this is about you parse "savings". It's not: 47% of Americans say they lack the cash to pay a surprise $400 bill http://www.politifact.com/punditfact/statements/2015/jun/09/...

I think the audience on this site is mainly out of touch. When you're making a fine salary it's easy to forget that most people don't. When you're spending your time looking up at those above you and positioning to get to their level (because upward mobility is an option) it's easy to forget to look at the piles of people below you where it isn't It's easy to assume throwing $100 around here or there is normal when y…

>>Many people can't.

Any what are they doing about it?

Please don't just stop at that. World today is at a point, where any skill can be gained at a very little price, which is almost free. You can learn anything you want, provided you 'want' to learn.

If you stretch a little, sleep a little and push harder you can learn how to repair stuff, build websites and what not.

I think most people can bail themselves out of poverty in first/developing world countries, if they learn simple management skills. Planning, setting goals, reviewing, taking next logical steps etc.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#347

Post by akeck »

Avshalom wrote: post #251
brianclements wrote: post #29

So many people live paycheck to paycheck that saving is just this intangible concept that "wealthier" people do. No one they know saves, no one taught them to save growing up, and even if they tried, they probably couldn't. Cost of living has outmatched wage growth; it's a mess. On the personal responsibility side of it though, I'm willing to bet that over recent decades, another thing that has also inflated is many…

>, and even if they tried, they probably couldn't For instance near as I can tell it takes like 10 grand to get into an index fund. Even if that didn't represent years of savings for most families there are so many things that 10 grand needs to be used for before [[2-5%/y return on investment over 20-30 year period IF the market doesn't crash shortly before you need to start drawing on it]] is a compelling propositio…

You can buy Vangard market index ETFs. VOO is their S&P500 ETF and BND is their bond ETF. Maintaining a 60/40 split of VOO/BND is hard to beat over long time frames. Substitute VYM for VOO for more cash flow at the expense of higher volatility.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#348

Post by UK-AL »

ryandrake wrote: post #338
UK-AL wrote: post #257

Earlier quoted context omitted.

You don't put that money in a stock market. And than it goes up by 10%. What's worse? Either way you've lost money you could have had. Humans tend to be loss averse though. In both situations you probably have liquid equivalents at hand

Losing 10% is clearly worse than losing 0% while watching someone else (irrelevantly) gain 10%.

It's opportunity cost. If it goes up 10% without putting money. That's 10% you could have had if you made the right decision.

The stock market going down 10%. That's 10% you could have had, if you made the right decision.

Logically its the same. However humans loss averse, which makes one seem worse.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#349

Post by ghaff »

kdamken wrote: post #315
lmm wrote: post #297

Earlier quoted context omitted.

> Most people do spend large amounts of their paycheck on things they don't need. Maybe. Or maybe they're spending their paycheck on things that they do need because they have to work for a living, they can't live by renting out their assets like MMM can. Example from the other branch: MMM can say "buy a bike instead of a new car" because he had the privilege of putting his "job" (rental properties) as close as he li…

Yes, we all have bills that need to be paid. But many people (especially those who aren't making great money) continually and stupidly buy stuff they don't need, not even realizing they can't afford it. You make 35k a year? Then you really shouldn't be buying a brand new iPhone with a large data plan, or a new car with monthly payments that eat away at your already limited income. Or maybe instead of going out for lu…

I'm really not sure how this thread turned into a honeypot for "Kill the landlord" types. Especially given how things turned out the last time public policy decided to make it relatively easy to get mortgages even for people who were a bit shaky on being able to make regular payments and cover upkeep.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#350

Post by branchless »

kamaal wrote: post #344
OrwellianChild wrote: post #314

Earlier quoted context omitted.

Not trying to change your mind, and I appreciate the chance for a dialogue... Your perspective seems based on the idea that housing (shelter) is a basic need and should be provided for, and at some fundamental level I'm inclined to agree. (In my mind, it would be pretty basic housing...) I did want to call attention to your gas prices example... Gas prices are driven down to approximately the cost of getting more oil…

>>Your perspective seems based on the idea that housing (shelter) is a basic need and should be provided for There is a very unfortunate problem with this line of thinking. It takes a lot of effort/money to build a house. You need to procure raw materials, pay for human labor and various other expenses, this is apart from acquiring land. And the problem with this kind of 'equality for all' argument towards housing is…

This is so wrong it hurts. The cost of the "house" is the land. Building houses has never been cheaper. Just like everything else has never been cheaper.
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