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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:27 PM   #21
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Donzo
A good example of spending - needing the biggest and best....
In 2001 I bought(brand new) a Kawasaki Prairie 400 ATV - it was the biggest and badest quad out there then. I bought the quad because where I live now has incredible places to ride to and enjoy.

I ride w/ a group of 5-7 at least 2x per month. I still have the same quad - runs perfect, looks good - - it is the oldest and smallest quad in the group now. All others are 650 - 800s - these guys buy new quads every time there is an increase in cc! I am the same age - or younger and the only one retired. It is almost like they can't enjoy the ride if they don't have the biggest, best machine and this attitude extends thru their lives.

They ask me when am I gonna get a new machine...I tell them when I can't keep up with them! Has'nt happened .... yet.
I work with several folks like this...one needs a new boat and toys every few years....also know some that get new cars every few years.....I actually think some of this comes back into the attitudes in the workforce (not finding fulfillment in stuff and looking for it at work=more @@@holes)
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:33 PM   #22
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by brewer12345
Its a whole book, but briefly they show that the basics (buying a home, family car, etc.) consume most of two incomes for most families, vs. much of one income back in the day.

I still think having a 3500 sq ft home vs. a 1100 sq ft one and a new 30K SUV vs. a basic 14K (or even used) car has something to do with it. I think couples that work hard want something to show for it.

You can still make it on one income but you won't "look" successful.

I never cared what other people thought because I knew I was on the right track. Now I enjoy waving to my neighbors as they go to work in their new SUV,
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:41 PM   #23
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by bbuzzard
I figure the easiest way to solve this problem is to accept that when they are retired and eating dog food because they spent all their money on HDTVs and trips to Cancun when they were younger, the government will institute a wealth tax, because it obviously will not be fair that I have $2M and they have nothing.

I can't wait !

Or maybe this is too close to the truth to be funny.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:55 PM   #24
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by brewer12345
Um, any of you read "The Two Income Trap"? A somewhat flawed analysis, but very eye-opening and makes it pretty clear that the problem isn't SUVs and lattes.
I agree! Very interesting reading. I remember one big motivator for people was trying to buy houses in "good" public school districts because they're worried that their kids will have a hard time in life without the best education. Which then drives up the cost of housing in those districts and elsewhere, which means families need two incomes just to pay the mortgage in addition to other bills...

Not that people couldn't consciously choose to live in a smaller place or otherwise cut back on expenses, but because of all the new ways to get into debt, it's much easier to get in over your head before you realize what happened. It's not intuitive to most people that one income might be better than two.

The same authors (Warren and Tyagi, I think?) wrote another book along the same lines about why it's harder than it used to be for young adults to get a good start financially. Not that it's impossible to do well from a young age, but you have to be a lot more financially savvy now that credit is marketed so much more aggressively, college costs have greatly increased so a lot more people start their careers in debt, etc.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:05 PM   #25
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Bikerdude
You can still make it on one income but you won't "look" successful.
Maybe, maybe not. I am the sole breadwinner for my family and we do not live extravagantly, but there is absolutely no way we would make it on one income of, say, $70k gross. We live in a middle class neighborhood (my neighbors range from the retired to a firefighter/union carpenter to a water plant foreman to a couple of actuaries) in a 2k sq ft. house, with a commuter car and a minivan. Pretty ho-hum stuff. But if you buy a house here you will be paying $350k and up, paying $5k or better in property taxes, etc. Ain't happening on one even fairly healthy 70k salary for a family of four, assuming you don't have some huge pile of capital to fall back on.

If you rent, you are looking at $1500 a month or so for something "OK." Buying used cars only gets you so far.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:12 PM   #26
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Bikerdude
You can still make it on one income but you won't "look" successful.
Single income guys also sacrifice their future to look successful. A colleague of mine in the next office who I've known for quite a number of years is a prime example. About 3 years ago we both re-located to the new world wide HQ in Houston - me from Louisiana and him from New Jersey. We are both the same age - early 50's - and DW and I took the opportunity to downsize to a 1400 sq ft apartment, but he super-sized to a 4,000 sq ft McMansion. (promotion = more money so got to have the trappings of success)

He is amazed that I plan to retire in 3 years because even though he would be eligible for ER from the company, he can't afford it. Last week we were talking about energy costs and I mentioned that I have kept track of utility bills for many years and in 2006 the total bill was right at a $1,000 - half what I paid in 1991. He couldn't believe it as he is used to summer bills of over $500/month for electricity alone. I also told him that we are now down to our last 2 electrical appliances that we bought when we first came to the USA on a 2 year contract in 1987. Our coffee maker finally popped its clogs and we had to splash out for a new one which cost less than $15. Owning electrical appliances that are approaching 20 years old is completely foreign to him.

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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:14 PM   #27
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Dog
Back then, people didn't make a purchase unless they had the money in hand to pay for it. Today, we figure if we can afford the monthly payment, or defer payment for 6 months, then we can afford the purchase. Just think how often financing is used to sell a product today....you can drive this car off the lot for only $250 a month (oh yeah.....$250 a month for 60 months).
I have had a friend like that. However he DID own his mobile home....only because insurance bought it for him after a storm destroyed his old one....HOWEVER, he DID lose this one too....because of his financial "storm"

Anyway, he ALWAYS bought EVERYTHING on credit! ALWAYS had to have the latest/greatest stereo/TV/VCR, bought nearly every movie that came out on VHS/DVD. He didn't eat at home....ate out ALL the time....and only at the fancier joints. His credit was so bad he couldn't even get a car loan, so he always drove beater-junks.....and dumped money into their repair. He w*rked at an OLD, rundown factory (a.k.a. sweatshop) and made a very poor wage. He had graduated from Devry, but wouldn't look for a job that he could use his training and skill on....because it would be a hassle to even 'look'.

His company revamped production and he REFUSED to do any job other than the one he had been doing.....He was terminated!!! Instead of looking for another j*b, and leaving his pension alone until he hit retirement age, he took a lump-sum payout......and BLEW every red cent!!!

He lost his trailer, had to get rid of most of his investments toys, and had to move into public housing....the "projects".

He has NO savings, NO pension, NO credit....NO LIFE!!! He got himself declared mentally incompetent, so now the gov't.....YOU & ME.... gives him a miniscule monthly check and pays for his housing.

He declares that he "was done wrong" by everybody!!! He claims his dilemma was not HIS fault...that he was just "dumped on". IDIOT!!!!
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:19 PM   #28
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Re: American workers are finding it harder to save for retirement !

Getting into some of the "good stuff" tonight, goonie?
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:20 PM   #29
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by sgeeeee

Or maybe this is too close to the truth to be funny.
Okay, I may be nuts. Since they contributed a lot to the economy (from spending) in the past, they deserve support from those who have profited from their extravagant spending. After all, consumer spending accounts for a significant portion of the GDP.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:30 PM   #30
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Alan
Single income guys also sacrifice their future to look successful.
Been there...Done that!!! Several years ago i was running with some big dogs, and "had" to keep up appearances. New cars/trucks at LEAST every two years!!! Taylored suits/shirts, etc.

One day I looked into a mirror and saw my future.....UH-OH!!!! I ditched all that, and got a grip on reality! The only remnants that I had of THAT life was the car I traded back in October.....at 11 years old!!!

I started LBMM (WAY below), paid off debt, started saving/investing, and other GOOD things!!!

I may not "look" successful, but I'm going to be able to FIRE in just over 11 weeks!!! ("looks" sure can be deceiving!!! )
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 08:49 PM   #31
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Goonie
I may not "look" successful, but I'm going to be able to FIRE in just over 11 weeks!!! ("looks" sure can be deceiving!!! )
11 weeks 8) That sounds great.

I have 3 years to go, and having declared this to allow for decent succession planning, the way I "look" now means little to all those around me. (the 6 yr old Corolla, the 1,400 sq ft apartment etc). Most are simply jealous that I can RE at 55 and do all the things I want to do with no worries. I am fortunate that I get on really well with the vast majority of the folks I work with including my boss.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 09:28 PM   #32
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Re: American workers are finding it harder to save for retirement !

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11 weeks 8) That sounds great.

I have 3 years to go, and having declared this to allow for decent succession planning, the way I "look" now means little to all those around me. (the 6 yr old Corolla, the 1,400 sq ft apartment etc). Most are simply jealous that I can RE at 55 and do all the things I want to do with no worries. I am fortunate that I get on really well with the vast majority of the folks I work with including my boss.
The nice part of the 11 weeks is that time is spent training my replacement, and "wondering aimlessly" around our facility. We had our "holiday" party last night and all the big sh*ts shots were there 'glad-handing' and back-slapping. My boss'es boss was yacking at me for a while and asked what I was doing now that my trainee was doing my j*b. I stated very simply "Nothing! I sit in my comfy highback leather chair and read, listen to the radio, surf the 'net ocassionally, and generally just putz around and do nothing useful!......Oh, yeah, and train my shadow!" He said that was good, and that I deserved the rest for the remaider of my time there. I suggested that he inform my boss of that, and he said he already had....YEE-HAA!!!
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 09:38 PM   #33
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by brewer12345


Maybe, maybe not. I am the sole breadwinner for my family and we do not live extravagantly, but there is absolutely no way we would make it on one income of, say, $70k gross. We live in a middle class neighborhood (my neighbors range from the retired to a firefighter/union carpenter to a water plant foreman to a couple of actuaries) in a 2k sq ft. house, with a commuter car and a minivan. Pretty ho-hum stuff. But if you buy a house here you will be paying $350k and up, paying $5k or better in property taxes, etc. Ain't happening on one even fairly healthy 70k salary for a family of four, assuming you don't have some huge pile of capital to fall back on.

I have a 2k sq ft house in a nice middle class neightborhood
and pay $4000 in property taxes.... along with a car payment,
etc... and.. not only am I a single breadwinner who makes
less than 70K.... I have a disabled child !

It can be done.



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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 07:29 AM   #34
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by brewer12345
Its a whole book, but briefly they show that the basics (buying a home, family car, etc.) consume most of two incomes for most families, vs. much of one income back in the day. Today's families have relatively little discretionary income andthings get really bad if either earner is out of a job. Sending a second family into the labor force has made families less financially secure.
The bulk of all middle class families are now 2 income:

1. The lower middle class (two wage earners) did it out of necessity
2. The upper middle class (two professional types) did it to buy SUVs and McMansions

Unfortunately neither group above saves anything.

And since both groups above depend on 2 incomes - there's higher risks in that both have to keep working.

I can understand group #1 above - that's just unfortunate reality.

Group #2 on the other hand.....
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 11:04 AM   #35
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Goonie
The nice part of the 11 weeks is that time is spent training my replacement, and "wondering aimlessly" around our facility. We had our "holiday" party last night and all the big sh*ts shots were there 'glad-handing' and back-slapping. My boss'es boss was yacking at me for a while and asked what I was doing now that my trainee was doing my j*b. I stated very simply "Nothing! I sit in my comfy highback leather chair and read, listen to the radio, surf the 'net ocassionally, and generally just putz around and do nothing useful!......Oh, yeah, and train my shadow!" He said that was good, and that I deserved the rest for the remaider of my time there. I suggested that he inform my boss of that, and he said he already had....YEE-HAA!!!
I hope I have the same experience when I get down to my last 3 months
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 11:45 AM   #36
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Delawaredave
The bulk of all middle class families are now 2 income:

1. The lower middle class (two wage earners) did it out of necessity
2. The upper middle class (two professional types) did it to buy SUVs and McMansions

Unfortunately neither group above saves anything.

And since both groups above depend on 2 incomes - there's higher risks in that both have to keep working.

I can understand group #1 above - that's just unfortunate reality.

Group #2 on the other hand.....
It's frequently repeated that as a culture we have grown our "necessities" to meet our maximum income potential. Women are now in the workforce enmasse so those dollars are there to be "spent." Our houses are larger. Upscale cars are readily available. How can you deprive yourself of the exotic vacations when you work so hard?

If your mindset isn't onto LBYM, you won't. You'll see something you want and go for it if you can make the payment or think you will be able to once the no payment period ends. It's human nature. The financial press feeds it because they are also afflicted with the same problems. The article is a big excuse for how "hard" it is to save for the future. I'm sure the author is also broke with no retirement savings.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 12:19 PM   #37
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Delawaredave
The bulk of all middle class families are now 2 income:

1. The lower middle class (two wage earners) did it out of necessity
2. The upper middle class (two professional types) did it to buy SUVs and McMansions

Unfortunately neither group above saves anything.
Both groups are qualified for college financial aids. The second group qualifies for less. After all, it's not so bad. :
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 12:34 PM   #38
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Spanky
Both groups are qualified for college financial aids. The second group qualifies for less. After all, it's not so bad. :
You are so right! It is really unfair to pay list price for college because one does save and accumulate assets when others squander their income on junk and receive a free or subsidized ride!

Unfortunately, that's the way the game is played today...
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 12:36 PM   #39
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Goonie
The nice part of the 11 weeks is that time is spent training my replacement, and "wondering aimlessly" around our facility. We had our "holiday" party last night and all the big sh*ts shots were there 'glad-handing' and back-slapping. My boss'es boss was yacking at me for a while and asked what I was doing now that my trainee was doing my j*b. I stated very simply "Nothing! I sit in my comfy highback leather chair and read, listen to the radio, surf the 'net ocassionally, and generally just putz around and do nothing useful!......Oh, yeah, and train my shadow!" He said that was good, and that I deserved the rest for the remaider of my time there. I suggested that he inform my boss of that, and he said he already had....YEE-HAA!!!
Goonie: Enjoy your remaining time. Lots of hanging around, surfing the web, come in late, leave early, etc. It's a good time. I had the pleasure of doing that for three months a few years ago when I left my nice, comfy corporate-type job. Or should I say, they allowed me to leave. Either way, enjoy it.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 12:43 PM   #40
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by sgeeeee

Or maybe this is too close to the truth to be funny.
Yeah, i'm quite sure that the minute i'm done dodging income taxes and start drawing down my Roth, the US will immediately switch to a consumption/national sales tax. Just to piss me off.
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