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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 01:39 PM   #41
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Re: American workers are finding it harder to save for retirement !

Just finished reading this book - Green with envy : why keeping up with the Joneses is keeping us in debt / Shira Boss. Lots of examples why families are in debt and not prepared for retirement. Many people feel intitled to new cars, big homes and fancy vacations. Neighbors and co-workers have nice stuff....so, I should too. I admit that it is a constant struggle for me. I would love to buy a new BMW 330i.....thankfully, I can easily talk myself out of buying one. I'm able to think past instant gratification.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 03:40 PM   #42
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by Helena

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.
Ditto. Family of three living on less than $70K, 1850 sq ft house, two cars, middle class neighborhood, $800 in property taxes. Not only can it be done, a family living on less than $70K can live comfortably AND save 20% of their income.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 04:11 PM   #43
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Cute 'n Fuzzy Bunny
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.
I think the goal is to achieve "balance" so no matter what happens you can work to minimize the overall tax bite no matter what gets changed.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 04:36 PM   #44
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Re: American workers are finding it harder to save for retirement !

True.

Interesting data: http://goofyblog.net/historic-househ...s-home-prices/

This confirms what I intuitively believed, that except for the very wealthy, home prices have risen far faster than wages.

Of course, the 'median home' today is a lot larger and contains a lot more technology and complexity than a home built in 1967.
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Re: American workers are finding it harder to save for retirement !
Old 01-14-2007, 04:41 PM   #45
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by Cute 'n Fuzzy Bunny
This confirms what I intuitively believed, that except for the very wealthy, home prices have risen far faster than wages.
Of course, the 'median home' today is a lot larger and contains a lot more technology and complexity than a home built in 1967.
Must be them there hedonics CPI adjustments again...
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Re: American workers are finding it harder to save for retirement !
Old 01-15-2007, 11:48 AM   #46
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Alan
and licking their genitals as well - apprently dogs do this to take away the taste of the dog food :P
Note to self - make "spam surprise" for dinner tonite for wife......
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Re: American workers are finding it harder to save for retirement !
Old 01-15-2007, 12:10 PM   #47
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Re: American workers are finding it harder to save for retirement !

Mmm...after many cat and dog food rejections, I was considering for many years the idea of coming out with a line of cat and dog butt flavored pet food. In fact, since the dogs seem particularly interested in the cats back ends, maybe only one flavor needed.
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Re: American workers are finding it harder to save for retirement !
Old 01-16-2007, 04:15 PM   #48
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Re: American workers are finding it harder to save for retirement !

In Brewer's defense, I live in the same general area and cost of living (NY suburbs) is higher than many (but not all) parts of the country.

I think the trend to upscale our lifestyles is powerful and durable, and if you're going to ER its one of the beasts you need to wrestle with almost daily. Little things keep edging up from 'luxury/splurge' to 'norm' to 'necessity'. The latest one for us is choosing short term parking at the airport vs long-term. We've sort of hit on a formula that 3-day trips we splurge for short term (at an extra $10 a day) to save the extra 40 minutes or so of hoo-ha before and after our trip (when we're all in such great moods...). Longer trips the daily savings make the hoo-ha worthwhile. Still, a few years ago, the short term parking would have seemed like taking a limo, and now its becoming the norm. I suspect everyone has things like this they've got to constantly wrestle with. Maybe having a little extra slack in the budget is a good idea to allow for this lifestyle creep over the years ahead.
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 12:17 PM   #49
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Re: American workers are finding it harder to save for retirement !

Mmmm, yes, lifestyle creep. Even possums like us have experienced this. There is some kind of reward you want for being on track for FIRE and doing it all "right". Ours has taken the form of vacations and a personal trainer, plus new bikes and a new kayak. These are ostensibly "healthy" things, but would never have entered our minds to purchase when we were becoming debt-free. Now that the house will be paid off in a few months, I am worried about that money slipping into lifestyle creep stuff.
Thanks for the book suggestion on Green with Envy, just requested it from the library. I read the 2 Income Trap, but since I don't have kids, I can't really comment, but I do see that just by having kids it would make it harder to deny them certain advantages that you could afford, just to save more money.
I do think the authors gloss over the reality of lifestyle creep and the relative necessity of certain trappings of typical middle class life: Ex. new cars, tv in every room, $$ cable, cell phones for kids, etc. These weren't necessities at one time, but are now.

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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 12:50 PM   #50
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by mclesters
I do think the authors gloss over the reality of lifestyle creep and the relative necessity of certain trappings of typical middle class life: Ex. new cars, tv in every room, $$ cable, cell phones for kids, etc. These weren't necessities at one time, but are now.
While lifestyle creep is real, I think a big driver is the declining price of the consumer goods.

If TVs were still hand-wired and cost two months' income, there wouldn't be one in every room of the house. And when cell phones & access cards are given away in cereal boxes, perhaps everyone will finally have one.

"What once were vices now are habits"...
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 12:54 PM   #51
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by ESRBob

I think the trend to upscale our lifestyles is powerful and durable, and if you're going to ER its one of the beasts you need to wrestle with almost daily. Little things keep edging up from 'luxury/splurge' to 'norm' to 'necessity'. ... Maybe having a little extra slack in the budget is a good idea to allow for this lifestyle creep over the years ahead.
I see this in my step kids lifestyles. They are married with kids. They upgrade cars every 2-3 years (staying upside down in the loans). They both have upgraded their home in the last 2 years. Both are pinching pennies to get by each month yet have nothing saved and are not even close to thinking about college for thier kids. Retirement planning?? No way! But, they both have new phone, new Ipods, new digital cameras and new laptops.

Despite my best efforts to get them to see the 'evil of their ways' there is no change in their behavior and no end to their consumerism...even when it gets in the way of their kids educational needs. It makes me sick to see what they are doing. One couple has already been in financial problems and had to file for the big "B." It seems to have made no change in their spending. They seem driven to spend with no thought of tomorrow and then when they get into trouble to whine about having no money to pay for X or Y that their kids need (tutoring).

I see no good way out for them. They have had several 'wake-up' calls yet continue to spend like there is no tomorrow. It is looking like DW and I will be doing most of the 529 contributions to their college fund and that really pisses me off. I hate to have the grandkids hurt because of their parents lack of good judgement and self control.

They are too old to spank. What do you do? Leading by example is not working and providing council is falling on deaf ears. Sometimes you just have to watch from the sidelines and hope the damage is not too great. I see a storm brewing.
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 01:10 PM   #52
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Re: American workers are finding it harder to save for retirement !

SR
some of my kids have a handle on money and others don't. Your post could be mine as well as to those that don't. Gentle guidance doesn't seem to work, OTOH don't want to come on so strong that it puts a strain on a good relationship.
Sometimes you just have to accept that they are adults and are living their lives how they want. UGH!
Tio z
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 02:57 PM   #53
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Re: American workers are finding it harder to save for retirement !

Quote:
Of course, the 'median home' today is a lot larger and contains a lot more technology and complexity than a home built in 1967.
Mebbe so. However, I live in a 1924, 1700 sq ft. bungalow and rent out (until recently) a 1976 ranch house. There is NO comparision in the quality of these two houses. My bungalow is built completely out of HUGE redwood boards, has a basement in which you could survive a nuclear blast, and has wordwork, built-ins, oak floors with inlays, and a hand-made craftsman fireplace to DIE for. Did I mention the coved ceilings and sculpted plaster trim overhead? The chandeliers? The huge windows that let light in on every side? Every time I have a contractor in to estimate some repair they shake their head in awe at the workmanship and quality materials.

My rancher, on the other hand, is built out of paper and spit as far as I can tell -- and built badly, at that. Walls aren't square, the fixtures and cabinets are the cheapest known to man, and the flooring was crap until I replaced it. Even at that, a buddy's 1990's ranch house makes my crummy rental house look like a castle. Slab flooring, NO window casings (just pieces of wood hammered around the windows and coming loose on a regular basis), etc. etc. The size of his lot is miniscule, too.

Houses today ARE a lot bigger, more impressive looking, etc. The folks in the "good" part of my town are paying 2x to 3x the value of my house for those big boxes they live in. But as far as I can tell, all they're getting for the extra money is air.



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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 04:50 PM   #54
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Re: American workers are finding it harder to save for retirement !

Caroline,
Good point on the 20s-- it sure must have been a great time in the U.S. -- the end of a long golden age of prosperity with a hiccup during WWI, people had the values of quality, victorian lifestyles and the money to pay for it... Our town is filled with great 20s homes and estates. The quality wasn't universal, though -- one area of town was one of the first 'housing developments' all built in the 20s and it must have been done in a hurry because the homes quality haven't held up. But by and large the craftsman/Italianate/neoclassical homes, indeed the whole neighborhoods in many cases, outclass anything to come along since.

20s homes look especially good when you consider that essentially nothing was built in the 30s and 40s, 50s homes kinda small and built quickly to respond to huge demand, 60s ranch-heavy, though I have been in some amazing mid-century modern homes, 70s and 80s fugeddaboudit and not until the mid-90s did you see building take off again with any consistent size, grace, quality, and as you note, not all the 90s homes are all that good. I realize this is a totally unfair slam at about 75 years of American construction, but I really do find homes and neighborhoods built in the 20s (and in the 30 or so years prior) to be the highwater mark in our built landscape. It makes me think about values, wealth, commitment to future etc. during that time, and whether we might or might not be working our way back up to a similar golden age again. ('Course we all know how that story ended, too!)
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 05:07 PM   #55
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Re: American workers are finding it harder to save for retirement !

Caroline...yep, they had better materials and workmanship in the good old days. I remember my first trip into the attic of my 1950's era house down in the bay area. All redwood and it looked like someone cut the boards by hand. But then again the whole area was festooned with redwood at the time.

Still, a well made home today might be supporting about 5000lbs of concrete tile roof, have triple pane gas filled windows, built in microwave ovens, structured wiring for networks and home theater, etc. But yeah, they're made of cardboard for the most part.

Quote:
Originally Posted by Nords
If TVs were still hand-wired and cost two months' income, there wouldn't be one in every room of the house. And when cell phones & access cards are given away in cereal boxes, perhaps everyone will finally have one.
Yeah but the tv you want has cost $1000-1500 for a few years now, and the thats probably been the case for a while. And the computer you really want costs $800-1000. And you pay for that free cell phone...bundled into the contract monthly payments.
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 06:05 PM   #56
 
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Cute 'n Fuzzy Bunny
Yeah but the tv you want has cost $1000-1500 for a few years now, and the thats probably been the case for a while. And the computer you really want costs $800-1000. And you pay for that free cell phone...bundled into the contract monthly payments.
I think the big inflation discount comes in your later years. My older friends that are 70 plus - Do not even want a computer or a cell phone or a flat panel TV.

I have one older friend that lusts after tools. He buys expensive huge woodworking tools like table saws and planers over the last 5 years. He has them delivered to his basement - He hasn't built anything yet! - He's too lazy!
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 06:46 PM   #57
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Re: American workers are finding it harder to save for retirement !

Anybody got one of these new table saws that automatically stops when it senses 'finger' instead of wood? My brother has one and swears by it. Apparently they test them out with hot dogs. Still, I haven't met anyone who's stuck their finger in one to test it... :P
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 06:55 PM   #58
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Re: American workers are finding it harder to save for retirement !

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table saws that automatically stops when it senses 'finger' instead of wood?
if it is sensing 'finger', isn't it already a bit late?
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 07:08 PM   #59
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by Cute 'n Fuzzy Bunny
Caroline...yep, they had better materials and workmanship in the good old days.
All old homes that we see around are well built. But it's not a function of the decade or era ... it's just survivorship bias. All the crappy homes built in the 20's, 30's, 40's have long since fallen down and/or been demolished. Only the well-built ones are left.

In 50 years, the same will hold true. Folks will be telepathing messages to each other about the quality of the homes built at the beginning of the century and lamenting that they don't build 'em like they used to.
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Re: American workers are finding it harder to save for retirement !
Old 01-17-2007, 07:11 PM   #60
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Re: American workers are finding it harder to save for retirement !

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I see no good way out for them.
You are going to die and leave them a fortune.
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