More evidence FIRE is alien to the masses...

[FIREd]

I am not surprised... My FIL is 61 years old and he is in the process of borrowing $50K from his 401K to repay a loan from his employer and to pay what he owes to the IRS for 2007. He makes $200K a year, he has no emergency fund (he asked to borrow $2000 last week to repay medical bills), he had $200K in retirement funds before borrowing from his 401K. He bought a house last year with 0% down. He hates his job and wants to quit at the end of June. I had to remind him that if he did he would owe taxes on the money he borrowed from the 401K. He can't afford to quit.

 

[mountaintosea]

Well, at age 41 I had about 80,000 saved. I really didn't start thinking about retirement until about 45 or so. However I did decide to start saving more even though I would receive a pension. In 14 years it grew to over 1m. Granted he may not follow that route, but it can be done. I was never a big spender and never carried much debt. Just the same he's not doomed yet!

 

[Walt34]

I think it was in my late 30's that it sunk in: The "far distant future" has a rather disconcerting habit of becoming "the present". Those people will figure it out in about another 20 years.

Makes me so glad I married an accountant who knows how to run a spreadsheet. She's quiet, cute, and very, very, smart.

 

[chinaco]

I know quite a number of people in similar situations.

 

[Gumby]

I saw that he was "selling camera equipment that he owed money on". Since he is a trucking company executive and not a professional photographer, this would seem to be the category of discretionary spending. In my view, using credit cards to finance discretionary spending on consumer goods is probably responsible for more financial misery in this country than anything else.

Part of the blame lies in better communication, mostly television. When I was young, we were very poor, but so was everyone else around us and so we didn't feel very bad about it. Now, anyone who watches TV can see extravagant lifestyles on display. They feel the need to keep up with Joneses who live in an entirely different part of the country, not just the neighbors.

 

[growing_older]

Not only do they see extravagant lifestyles on display (constantly) but the lifestyles are way beyond the reach of even the affluent. Huge mansions in resort areas. Young and very attractive new college graduates have interesting jobs that seem to take very little time but pay astonishingly well, or don't work at all but never seem to lack for funds.

 

[Khan]

Not only do they see extravagant lifestyles on display (constantly) but the lifestyles are way beyond the reach of even the affluent. Huge mansions in resort areas. Young and very attractive new college graduates have interesting jobs that seem to take very little time but pay astonishingly well, or don't work at all but never seem to lack for funds.

And on TV, even the poor are rich.

 

[freebird5825]

And on TV, even the poor are rich.

TV? what's that? just kidding. actually i watch very little of it.

love your avatar. just made the association between your online name and one of my favorite Star Trek movies. i've watched it at least 5 times and never tire of Khan's speech "I stab at thee...". Herman Melville quote from Moby Dick?

anyway, back on topic. the cashers of 401(k) for consumer debt payoff are gonna pay the fiddler later on...my 401(k) was my escape route from a miserable job, but at least I converted it into an immediate annuity, for life, at 5.25% fixed. translated monthly paycheck to set me free. the tradeoff was my health, sanity, and happiness. no brainer.

 

[chinaco]

Part of the blame lies in better communication, mostly television. When I was young, we were very poor, but so was everyone else around us and so we didn't feel very bad about it. Now, anyone who watches TV can see extravagant lifestyles on display. They feel the need to keep up with Joneses who live in an entirely different part of the country, not just the neighbors.

Yes. It also seems that every generation of parent tries to provide a bit more for their children. It seems that we are at a point where the current generation that is entering the workforce has mighty high expectations for immediate gratification in spending. The middle class in the US is turning themselves into financial wrecks... they want it all right now. They have become spoiled. Forget financial independence... most are not even financially stable.

 

[growing_older]

When I was a young adult, we lived in a small (really small) rental apt in a larger house to save up some money before buying a first "starter house" that needed a lot of work. With some careful planning we've been able to spiral up from there and now live in a pretty nice place - though not extravagant and not up to TV standards.

I have coworkers much younger than I who used jumbo loans to finance a first house immediately out of school which was nicer than their parents "pretty nice house". For the parents, that lifestyle was a product of a lifetime of financial efforts and slow building of resources. For the offspring, that lifestyle was a starting point and they expect to have it all (and more) as soon as possible. It has required lots of debt, they seem to have some plan to refinance something all the time, and I don't think it's sustainable.

 

[Texarkandy]

What a lot of folks don't understand is that you can't argue with math.

Numbers add up to what they add up to & are not influenced by individual desires and/or perceptions of how things are, how things ought to be, or what one feels they "ought" to have, "deserve", or are "entitled" to.

 

[Walt34]

Some people apparently just can't stand seeing money in the bank. "Gotta have it now." Reminds me of the different behaviors with myself and the ex. When the house sold, I put the money in the bank for down payment on a house and started an IRA. She took a six-week trip to England with her sister.

 

[clifp]

What a lot of folks don't understand is that you can't argue with math.

Numbers add up to what they add up to & are not influenced by individual desires and/or perceptions of how things are, how things ought to be, or what one feels they "ought" to have, "deserve", or are "entitled" to.

What a terrific observation. I think I am going to steal this line. Do you want credit or did you steal it from somebody else?

 

[Texarkandy]

What a terrific observation. I think I am going to steal this line. Do you want credit or did you steal it from somebody else?

Totally original - I tell my daughter this all the time

 

[Marquette]

What a terrific observation. I think I am going to steal this line. Do you want credit or did you steal it from somebody else?

edit: The above is from xkcd.com

xkcd - A webcomic of romance, sarcasm, math, and language - By Randall Munroe

 

[ladelfina]

And on TV, even the poor are rich.

I know..!! Our house was a bit better-looking than, say, Archie Bunker's.. but that was still well within the range of 'normal'. I think if they tried a TV set like that today, some kind of obscenity law would kick in; it wouldn't be allowed.

All the US TV I see shows really de-luxe accomodations, even on cop shows (ask yourself if a single cop would really live in the apt.s they show them having) or on "Nanny 911", where even the family with six rampaging kids and the mom in tears has everything HUGE, brand-new, and spic and span. (They must do some serious staging before they let the cameras in, but still...). It's so manipulative. We get the British and the Italian versions of Nanny 911, too, and the difference is stark; there they show 'real' houses and don't shy from filming the chipboard furniture or the mis-matched sheets. So on top of feeling guilty that your kids are brats, at least you don't have to feel guilty that your home is just average and not a showplace.

 

[FIREd]

We get the British and the Italian versions of Nanny 911, too, and the difference is stark; there they show 'real' houses and don't shy from filming the chipboard furniture or the mis-matched sheets.

I agree with that. I watch a lot of shows on BBC America, and they are not afraid to show it like it is. Mismatched kitchen cabinets, formica countertops, cramped bathrooms and dodgy carpets. There is a real contrast with what you see on American TV. If you believe what you see on TV nowadays, granite countertops and matching stainless steel appliances seem to have become standard for the masses. The kitchen has become "gourmet" (even for people who don't cook), the master bath has become a "spa", the master bedroom a "retreat". But you just have to look at pictures of real American homes (on Real Estate websites for example) to realize that not everybody in America lives like that...

 

[ladelfina]

Right.. but imagine you're a US kid brought up in one of those McMansion HOAs (no oil stains allowed in the carports!!!).. imagine the shock if your family ever had to downsize! Or imagine you're a foreigner who gets their idea of the USA from TV. You really would think the streets are supposed to paved with plasma TVs.

I never was a fan of soap-operas but I watched "Eastenders" a couple of times on BBC and almost got hooked! Working class folk 'goin' down the pub' with "real" money/life problems as opposed to the contrived "problems" of Dallas, 90210, and they use 'real'-looking (bold but not so beautiful) actors.

 

[freebird5825]

Some people apparently just can't stand seeing money in the bank. "Gotta have it now." Reminds me of the different behaviors with myself and the ex. When the house sold, I put the money in the bank for down payment on a house and started an IRA. She took a six-week trip to England with her sister.

is there any chance that my DH-to-be's ex and your ex are related? could be clones. no trip to england, but a spending spree that didn't stop. and still doesn't.

be glad, no make that ecstatic, that you aren't jointly liable anymore.

i know my guy is happy happy happy to be out of debt after over 2 decades of it.

 

[FIREd]

Or imagine you're a foreigner who gets their idea of the USA from TV. You really would think the streets are supposed to paved with plasma TVs.

I was one of them! I grew up watching shows like Dallas. So you can imagine my surprise when I arrived to the US... Whhhhhuuuuuuttttt! There are poor people in America? What are those "trailer parks"? And where is my government-mandated swimming pool, huh? Yeah, And wait a minute, I thought everyone was downing a quart of bourbon a day like JR... American TV... Selling dreams around the world since (at least) 1980...

 

[Retire Soon]

Now that easy credit is quickly disappearing, People still need that money fix. It's much like trying to ween a drug addict off of methamphetamines, it's very difficult to do. We have a large population that is addicted to easy money that came from home equity lines of credit and a never ending barrage of credit card offers. Now that their supply has been cut off, they still need to satisfy their financial craving, so they're raiding 401Ks. Americans have to experience all of their wants and desires immediately with no waiting period as deferred gratification has gone by the wayside. This should come as absolutely no surprise to anyone. It's much like having pity for drug addicts as they suffer withdrawal symptoms.

 

[W2R]

Right.. but imagine you're a US kid brought up in one of those McMansion HOAs (no oil stains allowed in the carports!!!)..

Yikes! Just veering off topic for a moment, there's one excellent reason why I am not interested in any HOA. Nobody's going to dictate whether my car is allowed to make an oil stain on my property, or not!

Amazingly, I guess I will have to pay LESS (in sales price as well as HOA fees) in order to obtain a house without such a PITA HOA.

Each to his own, and I hope those with HOA's are not offended! I respect your choices, and I will be living in that "other" neighborhood, over there (the one without the HOA).

 

[REWahoo]

Each to his own, and I hope those with HOA's are not offended! I respect your choices, and I will be living in that "other" neighborhood, over there (the one without the HOA).

As the president of our neighborhood HOA (and the enforcer of the "no pig farming allowed in your back yard" restrictions), I do understand why you want to live where you and your next door neighbor can do anything and everything your heart desires.

 

[Sarah in SC]

All HOAs are not created equal. We have one (there are 8 total lots here, but just 4 houses so far), costs $200 a year (to maintain the dirt road and dock) and my neighbor has 3 cars on blocks (we only have one) and periodically fixes the Corvette enough to do some drunken donuts in his front yard. Oh, and he fixes boats for a "living" so there are usually 8 or 10 of those next door. To say nothing of the ATVs. But he's never once complained about the dogs barking....

 

[W2R]

As the president of our neighborhood HOA (and the enforcer of the "no pig farming allowed in your back yard" restrictions), I do understand why you want to live where you and your next door neighbor can do anything and everything your heart desires.

Each to his/her own! If the roosters wake me up at dawn in ER, I'll know I should have listened.