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Old 09-28-2014, 11:48 AM   #121
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The retirement community you are referring to is Rossmoore. It is very very nice there and the prices are low relatively speaking. However, the HOA's run anywhere from $800 to $1200 per month. That's my guesss why the prices are so low.
Still it would be a more frugal choice than a $1.25M house, and they could live in the same area with the same views, friends, shopping, activities, parks, etc. without all the financial angst or upkeep costs of a 3,300 sq foot, built in the 80s home and 1 acre lot.

House price $1.25M => $300K condo. If they put 20% down on the house that could cover most or all the entire price of a condo.
Property tax $17K a year => $3.75K
Energy $600 month => ~$60 month or less.
Maintenance of 1% per year on a $1.25M house is $12.5K = with the condo the exterior maintenance would be included in the HOA fee and in the condo link I posted the interior looked like it wouldn't need any updates for years to come.
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Old 09-28-2014, 11:54 AM   #122
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Looks like they sold it a few months ago for ~$1.5m after paying what? $1.25m in June 2005? What's that $340k sale a month later? And ~$17k/year property taxes! Yowser!
Maybe it's a home equity loan? Somewhere it is mentioned that this couple had a second home, I believe--maybe a heloc financed that?
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Old 09-28-2014, 11:57 AM   #123
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How did you manage to collect all the money in your class?
I don't remember everything but I would stay after school and clean the boards (chalk boards in those days) and do extra credit. One extra credit assignment was to bring in pictures of healthy foods when we were studying nutrition. The other kids maybe brought in one or two pictures and I had a couple of shopping bags full.
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Old 09-28-2014, 01:51 PM   #124
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I think there should be a mandatory class taught during your junior or senior year in high school in real life economics, concerning the importance of saving for retirement, what 401-K's and Ira's are and how they work. How you have to start saving from day one in the job market. What to expect without a college degree or special technical training (your income prospects).

Budgeting according to your income for retirement and LBLM. In fact mandatory reading of a book like "The millionaire next door". And most importantly learning about the stock market, index funds, mutual funds,detrimental fees, bonds, etc.

In other words teaching some real life useful and important information
With that 3rd leg of retirement missing, we better be well informed about that second leg.
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Old 09-28-2014, 04:41 PM   #125
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In other words teaching some real life useful and important information
With that 3rd leg of retirement missing, we better be well informed about that second leg.
What? You don't use the Pythagorean Theorem every single day of your life??

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Old 09-28-2014, 06:11 PM   #126
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Old 09-28-2014, 06:31 PM   #127
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My family lived paycheck to paycheck so why am I, and many who post here, so different with money than the masses? I think some of it is just hard wired into my brain and not really anything I could change, even if I wanted to.
I started to think that way too, especially after reading Please Understand Me II, a book about different personality types.

It is also one of the few sensible explanations I can think of for some of the behaviors that otherwise apparently reasonably intelligent people do that appear to be so foolish to me and most of the others on this board. The differing personality types simply don't perceive the world the same way that I do.
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Old 09-28-2014, 07:17 PM   #128
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Originally Posted by daylatedollarshort View Post
Still it would be a more frugal choice than a $1.25M house, and they could live in the same area with the same views, friends, shopping, activities, parks, etc. without all the financial angst or upkeep costs of a 3,300 sq foot, built in the 80s home and 1 acre lot. ....
Maybe they bought into the myth that a house is not only a home but a wise financial investment too.
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Old 09-28-2014, 09:38 PM   #129
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It is an oft made mistake to compare heavily subsidized corporate healthcare with ACA plans. My DW and I are covered by my employer at less than $400 / month. However a similar ACA plan through our state exchange would cost $1200.
That's true. I checked our state exchange and our premium would run anywhere from $550 to $900 depending on deductible. A bit more expensive than what we pay now.
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Old 09-28-2014, 10:19 PM   #130
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That's true. I checked our state exchange and our premium would run anywhere from $550 to $900 depending on deductible. A bit more expensive than what we pay now.
A more interesting question, is if you include the employer contribution, what are the premiums, which provides a comparison of the real costs.
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Old 09-29-2014, 10:06 AM   #131
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Also the blatant way they try to manipulate our emotions is a turn-off to me.
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I think many here are just wired differently so maybe it is easier for us to resist the marketing siren calls.
All movies, and certainly all advertising, are, in the end, attempts, either subtle or blatant, to manipulate emotions.
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Old 09-29-2014, 10:13 AM   #132
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Originally Posted by modhatter View Post
I think there should be a mandatory class taught during your junior or senior year in high school in real life economics, concerning the importance of saving for retirement, what 401-K's and Ira's are and how they work. How you have to start saving from day one in the job market. What to expect without a college degree or special technical training (your income prospects).

Budgeting according to your income for retirement and LBLM. In fact mandatory reading of a book like "The millionaire next door". And most importantly learning about the stock market, index funds, mutual funds,detrimental fees, bonds, etc.

In other words teaching some real life useful and important information
With that 3rd leg of retirement missing, we better be well informed about that second leg.
Here, buy this variable annuity...

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What? You don't use the Pythagorean Theorem every single day of your life??

Actually, I've used geometry and trig quite a few times in regular life, as well as simple algebra. Can't say the more advance algebra, or obscure trig identities, have been very useful...

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I started to think that way too, especially after reading Please Understand Me II, a book about different personality types.

It is also one of the few sensible explanations I can think of for some of the behaviors that otherwise apparently reasonably intelligent people do that appear to be so foolish to me and most of the others on this board. The differing personality types simply don't perceive the world the same way that I do.
I've been thinking about this a lot lately. An acquaintance/friend and occasional dating partner deals with mood disorders, so I've been reading a lot about those issues, to gain some understanding. Just what the heck is "normal"? Humans often are a mess of phobias, misconceptions, insecurities, etc.
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Old 09-29-2014, 10:56 AM   #133
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Stayed out of this discussion until now. Did not watch the video, but get the understanding from the rest of you.

Some of my observations:
1. Schools do not teach any finance, even back when I was in high school late 70's/early 80's there was a class on basic home finance - balancing a checkbook, understanding interest and savings, how loans work, and similar low level economic principles. I do not think schools teach this anymore.
2. Having lived in CA and the SF bay area, many people view their home as an investment and also their nestegg.

Now here is where many will call me a hardass, I have zero sympathy for self-inflicted problems. No tolerance for entitlement mentality. No acceptance for those that will not work hard to achieve a goal. Stop blaming others and start accepting responsibility for your actions.

In the old days you went to the library and could research and educate yourself. Now we have internet and unlimited information available with ease. The trick is to be smart enough to know when you need to educate yourself, and understand the principle of LBYM to achieve a greater goal.
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Old 09-29-2014, 11:15 AM   #134
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Financial education certainly wouldn't hurt but we know many couples who were managers and directors, some over financial systems, who had self inflicted money issues. These people had to know Excel inside and out and how to budget and track spending - it was a key part of their jobs. I do not think they were stupid. Many were very bright tech-wise or had more astute political skills than we did at work. Yet their money management skills did not carry over to their personal lives.

So maybe spending too much is like an alcohol or drug addiction - it just really is harder for some to control.
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Old 09-29-2014, 11:24 AM   #135
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Trying to remember back in the 1960s (1962) in 8th grade the math textbooks covered balancing a checkbook and how to calculate interest. This was before the arrival of new math as part of the old math class. I recall also the IRS provided a booklet where you could do income taxes as well.
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Old 09-29-2014, 12:10 PM   #136
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Financial education certainly wouldn't hurt but we know many couples who were managers and directors, some over financial systems, who had self inflicted money issues. These people had to know Excel inside and out and how to budget and track spending - it was a key part of their jobs. I do not think they were stupid. Many were very bright tech-wise or had more astute political skills than we did at work. Yet their money management skills did not carry over to their personal lives.

So maybe spending too much is like an alcohol or drug addiction - it just really is harder for some to control.
I spent a good chunk of a my career in finance and accounting departments. I was amazed at some of the bad choices people made (some disastrous!) with their money, especially considering the kind of work they do day in and day out.
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Old 10-04-2014, 04:00 PM   #137
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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.

.
I feel somewhat lucky that my grandparents were forged by the fires of the Great Depression, particularly the Oklahoma granddad, so some of that stuck, and generated an interest in economics (read Galbraith's History as well as Keynes and a couple histories of FDR's Presidency, even though I was an English major). That made a huge difference in terms of my attitudes towards consumption although I've never not a bought a book or album (CD/Downloand) that I didn't want, as my version of Starbucks.

By the way, I saw a study that indicates that financial education makes virtually no difference in students' behavior after the courses, even though I thought and probably think it's a good idea anyway.
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Old 10-04-2014, 04:14 PM   #138
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By the way, I saw a study that indicates that financial education makes virtually no difference in students' behavior after the courses, even though I thought and probably think it's a good idea anyway.
As I wrote in this post I think the study is correct that for most students it won't make any difference. But it will help the ones that do pay attention and have the personality type to defer immediate gratification for long term gain.
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Old 10-05-2014, 10:21 AM   #139
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I had an Economics teacher in HS who did give us a lesson in how compound interest works. This was well before IRA's etc. I found it interesting, being a math geek. But, most of my peers probably slept through it.
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Old 10-05-2014, 10:24 AM   #140
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I suspect it will be a liberal "woe is me" piece about how ill prepared my generation is for retirement seeking to blame others for the fact that they failed to plan and save and pissed away their money on Mcmansions and keeping up with the Joneses.
I know many 'conservatives' who start crying "woe is me" when their ox is gored.
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