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Old 09-26-2014, 12:29 PM   #61
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The comments above raise a question I have: Have we created a society that is to complex for the average person to understand? Other posts discuss most folks not knowing insurance terms, this discussion shows not understand retirement issues, etc.
Is the amount of things that need to be understood beyond the capacity of a lot of folks to absorb and understand?
My kids understand it*, probably most of the kids of folks on this forum understand it. The problem may be that this is not something intuitive. For example reading and writing is so natural to us that we take it for granted, feel it was maybe intuitive. It was not. It took many years for us to learn to read and write. Let's not get smug about our reading ability. If there were no teachers there to teach us we would all be illiterate.

For a lot of people there are no financial teachers, the parents are incapable, the school system doesn't do it, but all the time they are bombarded with commercials telling them how wonderful it is to buy this or that, by for profit schools telling them how great their future will be with that cooking degree. Nothing teaching kids fundamental flaws in this logic.

All kids deserve a chance at an education. And part of this education now is in financial management. In addition society, business, and national defense benefit from an educated population. This is where there might be a place for government (who else could do it), not in adding more savings requirements, but in providing a counter to all the advertising nonsense. Remember when tobacco companies used to advertise all the health benefits to smoking?

The crusade against smoking might be a model, but unfortunately there seems to be so much antagonism in DC that nothing is likely to happen. Eventually, if financial ignorance is not addressed it will affect us all.


*it: importance of acquiring assets rather than debt.
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Old 09-26-2014, 12:30 PM   #62
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Used clothes are becoming one of our largest export items. Retirement savings are lacking but people in the U.S, on average, throw away 68 pounds of clothes per year
Now I feel better about the leather biker jacket I bought my freshman year in college. 26 years old, and it's still wearable!

I tend to buy clothes that aren't too flash-in-the-pan, style wise. And then just wear them until they start getting ragged.
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Old 09-26-2014, 12:33 PM   #63
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I just watched it. It was OK, but sometimes these documentaries make me feel too judgmental. Especially the older couple who bought a large house in the Bay Area with a huge mortgage in their late 50's/early 60's. What were they thinking?
I did watch the trailer but I try to avoid documentaries like this because I'm afraid it will bring out too much schadenfreunde in me. Also the blatent way they try to manipulate our emotions is a turn-off to me.

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No, while there have been proposals for an enhanced SS that would effectively force people to save more for retirement like SS does that in theory would "solve" the problem because it would be a government imposed solution to their lack of discipline. The problem I have with such a proposal is that it penalizes those who are diligent and save because it forces them into a low-return option like SS. Existing tools are sufficient, the problem is that too many people don't have the discipline to use them properly.
I agree and I don't see any need for an "enhanced SS" or alternative program. I think SS payments are quite generous and very progressive. Someone making 40k/year can obtain 1900/month if they wait until 70 before drawing on it.

I'm in Toronto right now and was discussing/researching CPP (candian pension plan) with relatives. I was very surprised to find out social security pays out 2-3 times as much as the Canadian Pension Plan. And socialism isn't even a dirty word in canada.
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Old 09-26-2014, 12:36 PM   #64
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50% of all Americans have an I.Q. of 100 or less. Until there's a genetic solution to this, I can't be judgemental.
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Old 09-26-2014, 12:38 PM   #65
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...: Have we created a society that is to complex for the average person to understand? ...Is the amount of things that need to be understood beyond the capacity of a lot of folks to absorb and understand?

Perhaps, which would indicate that more education is needed. OTOH, if one just saved 10% of what they made tax-deferred, picked low-cost target date funds and let it ride over a 30-40 year career they would have a nice retirement nestegg to supplement SS in their retirement years. I know that saving 10% might be hard early in one's working life, but you should be able to get to that 10% or more in your late 20s but it would require some sacrifices and living within your means which some people refuse to do.
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Old 09-26-2014, 12:38 PM   #66
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Used clothes are becoming one of our largest export items. Retirement savings are lacking but people in the U.S, on average, throw away 68 pounds of clothes per year -
Capitalism is a good system if you think like a capitalist, even if just on a small scale. Nearly everyone in this forum does.
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Old 09-26-2014, 12:52 PM   #67
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The comments above raise a question I have: Have we created a society that is to complex for the average person to understand? Other posts discuss most folks not knowing insurance terms, this discussion shows not understand retirement issues, etc.
Is the amount of things that need to be understood beyond the capacity of a lot of folks to absorb and understand?
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I think that is a good point and a big part of the problem. Another is billions spent on marketing to get people to part with their money and very little on how to save it, except for financial ads which often come with high priced fees.

Used clothes are becoming one of our largest export items. Retirement savings are lacking but people in the U.S, on average, throw away 68 pounds of clothes per year -

The fashionista's dilemma: Cheap clothes - CNN.com
Interesting points, both, but I feel exactly the reverse. The internet has provided access to information previously unavailable to us average-Joe's/Jane's. It's there for the taking if one has interest and/or initiative, and it's incredibly beneficial when one does. Remember the legal adage "Ignorance of the law is no excuse"? I feel very much the same about all aspects of our financial health - there is simply no excuse for not taking the time to educate yourself.
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Old 09-26-2014, 01:08 PM   #68
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It isn't complicated if you take out the middlemen. Go to the library, check out even a "for dummies" book about personal finance or retirement, follow directions. Most people won't have sizeable estates or sums of money in sophisticated portfolios that need special treatment. Insurance planning is also pretty cut and dried.
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Old 09-26-2014, 01:10 PM   #69
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50% of all Americans have an I.Q. of 100 or less. Until there's a genetic solution to this, I can't be judgemental.
If people that post here cannot have empathy and look out for the bottom half, who will?

I think many here are just wired differently so maybe it is easier for us to resist the marketing siren calls.
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Old 09-26-2014, 01:24 PM   #70
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If people that post here cannot have empathy and look out for the bottom half, who will?

I think many here are just wired differently so maybe it is easier for us to resist the marketing siren calls.
Empathize, yes, and that is why we have SS. Subsidize, no. Sorry to be harsh, but grown-ups need to live the the consequences of their decisions - good or bad.
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Old 09-26-2014, 01:54 PM   #71
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Is making a wiki on how to ER or even just the R part something we could do here?
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Old 09-26-2014, 02:28 PM   #72
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Originally Posted by daylatedollarshort View Post
If people that post here cannot have empathy and look out for the bottom half, who will?

I think many here are just wired differently so maybe it is easier for us to resist the marketing siren calls.
Seriously, I don't know why you would think that people who post here would be any more empathetic to the bottom half than the population at large. But to my mind, helping educate that bottom half is not a question of empathy. It is a question of maintaining the future wealth and health of the economy, which is beneficial to us and our kids. After all, these 50% do vote you know. And unless we are planning to take that away, they had better be educated.
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Old 09-26-2014, 02:30 PM   #73
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For a lot of people there are no financial teachers, the parents are incapable, the school system doesn't do it, but all the time they are bombarded with commercials telling them how wonderful it is to buy this or that, by for profit schools telling them how great their future will be with that cooking degree. Nothing teaching kids fundamental flaws in this logic.
I think that is a lot of it, and that the self-reliance that earlier generations had to learn (often the hard way) isn't taught now. Schools generally don't teach finance, few parents do, so the kids don't even know what they don't know or that it is important to learn about it.

I just sent a young lady who is 24 and just starting out in the working world a bunch of finance books because she indicated she did know what she didn't know but I think she's the exception. She had a childhood that no kid should have to endure and is on track to do well for herself. She casually mentioned that she wanted to learn more about 401ks and IRAs. So I sent her The Millionaire Teacher, How a Second Grader Beats Wall Street, The Millionaire Next Door, A Random Walk Down Wall Street, Predictably Irrational, and Your Money and Your Brain. I did emphasize that she wasn't expected to read them all this month! But I also made it clear that this is important stuff to know.

Along with the rough childhood she received zero instruction about finance stuff. Her father is a nice guy but lousy with money.
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Old 09-26-2014, 02:32 PM   #74
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Seriously, I don't know why you would think that people who post here would be any more empathetic to the bottom half than the population at large. But to my mind, helping educate that bottom half is not a question of empathy. It is a question of maintaining the future wealth and health of the economy, which is beneficial to us and our kids. After all, these 50% do vote you know. And unless we are planning to take that away, they had better be educated.
I meant most people here are in the top half of IQs, not necessarily the top half of empathy.
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Old 09-26-2014, 02:38 PM   #75
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I think that is a lot of it, and that the self-reliance that earlier generations had to learn (often the hard way) isn't taught now. Schools generally don't teach finance, few parents do, so the kids don't even know what they don't know or that it is important to learn about it.

I just sent a young lady who is 24 and just starting out in the working world a bunch of finance books because she indicated she did know what she didn't know but I think she's the exception. She had a childhood that no kid should have to endure and is on track to do well for herself. She casually mentioned that she wanted to learn more about 401ks and IRAs. So I sent her The Millionaire Teacher, How a Second Grader Beats Wall Street, The Millionaire Next Door, A Random Walk Down Wall Street, Predictably Irrational, and Your Money and Your Brain. I did emphasize that she wasn't expected to read them all this month! But I also made it clear that this is important stuff to know.

Along with the rough childhood she received zero instruction about finance stuff. Her father is a nice guy but lousy with money.
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Old 09-26-2014, 02:45 PM   #76
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Sorry, I posted this...bitter much?


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I think it's great you started this thread - it generated tons of great discussions!
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Old 09-26-2014, 02:58 PM   #77
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I meant most people here are in the top half of IQs, not necessarily the top half of empathy.
I think people lose 30% of their empathy when they post on-line. Of course, not the folks in here.

Top half of IQs? I am not so sure. People lose brain cells as they get older. Some of the posters here may have started with an IQ of 150 at birth but aging may have taken their tolls ....
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Old 09-26-2014, 03:01 PM   #78
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The comments above raise a question I have: Have we created a society that is to complex for the average person to understand?
I do think things are more complicated definitely - People used to just save money at a bank in a saving's account. Some people didn't get pensions in the old days too, but they just put money in the bank instead. And they called it their retirement fund. They didn't live as long either and their healthcare cost was low.

What I am perplexed about is something though - these people who were on the documentary are educated people (and I know tons of people just like them) who don't seem to understand simple financial consequences.

I say to my co-workers that they should educate themselves on asset allocations and such (I don't know much, but I know a whole lot more than they do) and their response is usually "I am too busy". One guy had all his money in a stable value fund until about 3 months ago (He put it there AFTER the market tanked in 2009 and forgot about it) and he is saying he has no time to be looking at this stuff, and I was like, really? He takes small part time jobs to make small money...None of these makes sense to me.
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Old 09-26-2014, 04:49 PM   #79
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I enjoyed the film. But then again, I watch a lot of left-leaning and/or conspiracy-theory documentaries. They're way more fun than regular TV programs.

I tend to align with most of the comments here. I do think financial education is critical to avoid a proliferation of these stories. I went to high school in the late 70s, and we were required to take a course called Civics in either the Junior or Senior year. I can't remember if it was a whole year or just one semester. But I distinctly remember that one six-week period was dedicated to "personal finance." It covered such things as how to write a check, open a bank account, get a loan, file a tax return, contracts, insurance, savings, etc. It was pretty basic stuff, and I don't remember if it got into investments or retirement planning beyond, What is a stock? and What is a bond?

But when my oldest started high school and I was looking over the curriculum, I remember asking my wife if Civics was no longer required. She also took Civics in high school. I actually asked the guidance counselor about it and she pointed us to an elective that combined these concepts with an intro to business. She said it's often canceled because very few students sign up.

Needless to say, my kids got most of their financial education from me. I also loan them books and we discuss their 401K, AA, LBYM, etc. I'm quite sure they'll be fine. I got none of this from my parents. They pretty-much lived paycheck to paycheck and had no knowledge of saving or investing. I think people tend to repeat whatever their parents do, so this cycle of financial ignorance gets passed down from generation to generation. I think this is one case where government involvement might be beneficial. At least bring back the Civics class in high school. I don't really know if it made a difference with me or not. But it certainly opened my mind to some terms and concepts that were never discussed around the dinner table.
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Old 09-26-2014, 05:02 PM   #80
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I believe the movie had very little to do with how to save for retirement. It was about unexpected medical bills, divorce and possible disability, long term unemployment and the governments ineptitude with respect to Social Security.

All of these were potential retirement killers for decades upon decades. These are social and political issues that affect retirement, not retirement issues in and of itself.
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