Emergency savings dangerously thin even for upper-income earners according to CNN

[ESRwannabe]

My emergency cash is pretty much nonexistent right now, but my taxable investments throw off roughly 46% of my living expenses in qualified dividends.

I've been plowing everything into investments and only have an extra 2 weeks living expenses in cash (actually 6 weeks, but I plan to invest 2/3 of that on Monday). Usually I like to keep a year's worth of living expenses on hand, but I am so close to hitting my ESR goals that I just want to go all out until I hit my number.

My goal is taxable dividend income which can cover 50% of living expenses. So I am 92% there. I think I will hit my goal this year (age 39). Once that is done I'll build up 1+ year living expenses in cash and start looking into a career change.

There is an urgency for me to beef up my finances quickly, not related to ESR plans. It is very likely that my employer is going to be hit with a very large revenue decline, indirectly, due to sequestration budget cuts to the military. There are also some upcoming personnel changes coming due to retirements which could adversely (or positively) affect me (very long time director of our dept is retiring this year and my boss is planning on retiring in the next 1-3 years).

 

[G8tr]

Why irrelevant?



-ERD50

Because people don't live in those lower income countries, so it is an apples and oranges comparison.


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[someguy]

Because people don't live in those lower income countries, so it is an apples and oranges comparison.

LOL +1

It seems like proponents of "life in the middle class sucks" are suddenly nowhere to be found when genuinely challenged to explain their claim.

 

[ERD50]

Because people don't live in those lower income countries, so it is an apples and oranges comparison.


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People don't live in those countries? What the heck are you talking about?


-ERD50

 

[ExFlyBoy5]

I have a good friend who owns a small plumbing business here in Texas. I always ask him, "How's business?" His response is always the same... "Business is great, pipes still getting clogged as always. But I could double my revenue if I could get reliable, skilled help." His guys average over $50K/yr with full benefits (very low COL area). But nobody wants to do it. The few that do typically have a criminal background or they're in the country illegally, or other issues. He loves to pontificate about how unemployment stats are a crock, and the real issue is that young people don't want to work hard and get their hands dirty... entitlement mentality... over-parenting... video games... rap music... I'll stop there.

This. I have heard the story over and over again. People are just about allergic to hard work...hell, any real work at all. How many of your neighbors have lawn services because they don't 'have the time' to do it themselves? This coupled with the overwhelming number of folks that feel 'entitled' to everything under the sun.

A couple years ago, millions of dollars worth of crops died in Georgia after the state cracked down on immigrant (illegal) labor. They couldn't hire anyone and when the state tried to employ prisoners they wouldn't do it either as it was 'too difficult'.

Sent from my mobile device so please excuse grammatical errors.

 

[naggz]

I have a good friend who owns a small plumbing business here in Texas. I always ask him, "How's business?" His response is always the same... "Business is great, pipes still getting clogged as always. But I could double my revenue if I could get reliable, skilled help." His guys average over $50K/yr with full benefits (very low COL area). But nobody wants to do it. The few that do typically have a criminal background or they're in the country illegally, or other issues. He loves to pontificate about how unemployment stats are a crock, and the real issue is that young people don't want to work hard and get their hands dirty... entitlement mentality... over-parenting... video games... rap music... I'll stop there.

I bet if your friend raised his wages, he could find a lot of qualified workers.

The labour market is just another market, with buyers and sellers of labour. If reliable, skilled people keep leaving, that usually means that there other companies / careers that are paying better or providing a better work environment, or other careers that people are more interested in.

I find it funny how many business owners don't understand that, and complain that they can't afford to pay more....well then the market for that good or service does not exist.

As far as the "young people" issues, it's is a complete "crock". Older generations have been saying that for centuries about the younger generation that they raised. (there was a thread on here about that a few weeks back).

(Edited to add that if your friend could truly double his revenue by just switching to skilled labour, then he should be able to easily greatly increase the wages he pays, and be better off)

 

[naggz]

This. I have heard the story over and over again. People are just about allergic to hard work...hell, any real work at all. How many of your neighbors have lawn services because they don't 'have the time' to do it themselves? This coupled with the overwhelming number of folks that feel 'entitled' to everything under the sun.

A couple years ago, millions of dollars worth of crops died in Georgia after the state cracked down on immigrant (illegal) labor. They couldn't hire anyone and when the state tried to employ prisoners they wouldn't do it either as it was 'too difficult'.

Sent from my mobile device so please excuse grammatical errors.

You make it sound like the farm "owner" was "entitled' to have his crops harvested, yet complain that "workers" feel "entitled" to their own life and how they choose to spend their time, including not wanting to work very hard, in uncomfortable positions, in hot environments, for likely very little pay and benefits. As my post above states, the labour market is just a market. People perceived that the farming work was not worth the pay.

 

[ExFlyBoy5]

As far as the "young people" issues, it's is a complete "crock". Older generations have been saying that for centuries about the younger generation that they raised. (there was a thread on here about that a few weeks back).

This simply isn't true. When my Dad was in the orphanage, the 'residents' had to grow their own food. They worked the land and worked in the shops. Try doing that now in the 'group homes' that kids are sent off too. Things ARE different.

Did you read my post where Georgia had millions of dollars worth of crops DIE because they couldn't get them harvested? Are you saying that people *really* aren't that lazy...but only if you pay them 100K a year to pick peaches?


Besides, if you could sit at home and eat bon bons while the government pays you to DO NOTHING? What would motivate you to do something?!?

 

[Winemaker]

I don't eat peaches now; I can just imagine how many more would stop when peaches cost $20.00 each.




Absenteeism is pretty rampant is some instances. I can remember asking a tenant-applicant why he only works 3 days a week when he said he supposed to work 6. His reply was "he couldn't make it on two". Needless to say, he wasn't approved.


My friend owns a multi-manufacturer car dealership in town. He can only rely on retired gentlemen to run courtesy vans, cars, pick-ups, or be lot attendants. Everyone under 35 can't pass a drug/alcohol test or has a criminal record.

 

[naggz]

This simply isn't true. When my Dad was in the orphanage, the 'residents' had to grow their own food. They worked the land and worked in the shops. Try doing that now in the 'group homes' that kids are sent off too. Things ARE different.

Did you read my post where Georgia had millions of dollars worth of crops DIE because they couldn't get them harvested? Are you saying that people *really* aren't that lazy...but only if you pay them 100K a year to pick peaches?


Besides, if you could sit at home and eat bon bons while the government pays you to DO NOTHING? What would motivate you to do something?!?

I'll be done after this post...I'm feeling a bit angry at this point..but...

Your dad's orphanage had land to work and shops (as in multiple shops?) How nice of them to have all these resources. I bet if you talked with the group homes today, they would gladly take resources like that. And yes, times are different, they are much better now, or would you like to see orphans work in shops again?
(Oh, and an anecdotal story is not representative of the whole)

Is the farming work year round or seasonal? If it is year round work, then yes, it's not about laziness, but just paying enough to entice people to do that work. For 2 jobs with the same amount of wage, taking an easier, lighter job is smart, not lazy. (why sacrifice your time AND body, when you can just sacrifice your time). How many peaches did you pick?

If it's seasonal, then it's a bit harder. How do you find someone who isn't working for a large period of time somewhere else, or who can find another job on the exact periods of time that the work is not available. Most people would much rather work a stable year round job, unless the seasonal work pays well enough to cover them until the next season.

I think your bon-bon comment is completely off base.

 

[daylatedollarshort]

My friend owns a multi-manufacturer car dealership in town. He can only rely on retired gentlemen to run courtesy vans, cars, pick-ups, or be lot attendants. Everyone under 35 can't pass a drug/alcohol test or has a criminal record.

I can see where a criminal record for car theft or drunk driving might be a no go for a van driver, but maybe some of those criminal record people for unrelated offenses could sure use a second chance. It makes me sad to hear that criminal records might mean life time unemployment for those who could use a job the most.

The U.S. has 5% of the world population yet 25% of the world's prison population.

 

[Walt34]

A couple years ago, millions of dollars worth of crops died in Georgia after the state cracked down on immigrant (illegal) labor. They couldn't hire anyone and when the state tried to employ prisoners they wouldn't do it either as it was 'too difficult'.

I have to agree with naggz on the pool of labor. While I've never picked crops for a living, a $200/hour labor rate would get my attention enough to consider it. But I wouldn't even think about it at minimum wage or anywhere close to it.

Somewhere in between is enough to interest enough people to get the crops harvested. Now, whether those crops can then be sold at a marketable price is a different issue. But those crops didn't die because the farmer couldn't find anyone to harvest them. They died because the farmer couldn't find anyone to harvest them at a rate he was willing to pay. And that is an entirely different thing.

 

[G8tr]

People don't live in those countries? What the heck are you talking about?





-ERD50

People do, just not the ones that are relevant for comparison's sake. It's like saying that a banana in the US costs 20 cents, but the same banana in Central America costs 2 cents. One could say that the US banana is expensive, but that depends on where the buyer lives. Same with the middle class. Compensation may be much lower in Central America, but the US middle class doesn't live there, so the former isn't a relevant point of comparison. Perhaps a more relevant (and reasonable) comparison would be high COL areas in the US versus low COL areas. Compensation is higher in the former, but it's all proportional. The best solution is to find a job that gets paid high COL compensation, yet allows one to live in a low COL area.


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[ERD50]

People do, just not the ones that are relevant for comparison's sake. It's like saying that a banana in the US costs 20 cents, but the same banana in Central America costs 2 cents. One could say that the US banana is expensive, but that depends on where the buyer lives. Same with the middle class. Compensation may be much lower in Central America, but the US middle class doesn't live there, so the former isn't a relevant point of comparison. Perhaps a more relevant (and reasonable) comparison would be high COL areas in the US versus low COL areas. Compensation is higher in the former, but it's all proportional. The best solution is to find a job that gets paid high COL compensation, yet allows one to live in a low COL area.


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It depends on what the reason is for the comparison. I think this thread drifted into how entitled some people have become. I think it does make sense to compare our standard of living to people worldwide, for a reference.

-ERD50

 

[G8tr]

Emergency savings dangerously thin even for upper-income earners according to...

I can see where a criminal record for car theft or drunk driving might be a no go for a van driver, but maybe some of those criminal record people for unrelated offenses could sure use a second chance. It makes me sad to hear that criminal records might mean life time unemployment for those who could use a job the most.

The U.S. has 5% of the world population yet 25% of the world's prison population.

It has more to do with insurance than anything else. Insuring a business that hires ex-cons is higher, despite the fact that some are looking for a fresh start after doing something profoundly stupid. Yet that too is a factor in hiring (poor judgment and/or impulse control), especially where customers are involved. Now, if an ex-con can turn a wrench, many businesses will consider employment.


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[meierlde]

There is hope in some places. Here in WV Blue Ridge Community and Technical College offers classes in things like welding, CNC maintenance/repair, electrician, truck driving, chef, plumbing, and a lot of others, all trades that will be in demand for the foreseeable future and that pay enough to support oneself and/or bootstrap oneself to what one really wants to do.

I do remember taking a financial basics class in HS, I forget what they called it - how to figure interest, the difference between a savings and checking account, stocks and bonds, and of course how to write a check and balance a checkbook. It was one of the two most practical classes I took in HS. The other was typing.

I say a simple solution is to give AA degrees to folks who get trade certifications. (Some are doing it). Given for example the plumbing has undergone a revolution as plastic pipe and home run pipeing (i.e. one manifold feeds pipes to each room that has plumbing, versus the old tree model) etc, have changed one needs the ability to re-educate oneself even in the trades (Let alone consider a person who learned auto mechanics in the 1970s versus auto mechanics today). So the ancilllary course should relate to helping folks learn how to teach themselves.

 

[Walt34]

It has more to do with insurance than anything else. No surfing a business that hires ex-cons is higher, despite the fact that some are looking for a fresh start after doing something profoundly stupid. Yet that too is a factor in hiring (poor judgment and/or impulse control), especially where customers are involved

That's about it. A business owner would be a fool now to hire people with criminal records because of the liability. One such where we used to live was a small moving company that was proud of helping ex-cons get a fresh start, until one of them raped a customer. The resulting judgment cost him his business and then some.

How many here would bet their ability to earn a living and their net worth on the likelihood of an ex-con getting their act together?

 

[someguy]

I bet if your friend raised his wages, he could find a lot of qualified workers.

The labour market is just another market, with buyers and sellers of labour. If reliable, skilled people keep leaving, that usually means that there other companies / careers that are paying better or providing a better work environment, or other careers that people are more interested in.

Those people might not be going to other companies that offer better whatever. They might be: exiting the labor force altogether, retiring early at a lower lifestyle than desired/anticipated, depending on family, depending on social safety nets, or leaving the country for a lower cost of living, just to name a few.

If we continue with the scarce plumber model, perhaps the plumber has a significant other who works as well. The plumber decides it's not worth $50K/year to him to work, so he stops. But he and his SO don't want to give up smartphones at $80/mo each, or CATV with a couple sports packages and premium channels at $110/mo. And darn it, he needs/deserves dinners at decent restaurants and a nice car that isn't too old to get to them. And the 2200 ft2 house in a solid neighborhood? No way they're giving that up.

 

[daylatedollarshort]

That's about it. A business owner would be a fool now to hire people with criminal records because of the liability. One such where we used to live was a small moving company that was proud of helping ex-cons get a fresh start, until one of them raped a customer. The resulting judgment cost him his business and then some.

How many here would bet their ability to earn a living and their net worth on the likelihood of an ex-con getting their act together?

A large percent of our population have criminal records / prison records - I've read 65 million or one in four adults. It is a shame to make that a life sentence of unemployment for any job, no matter what the crime, no matter how long ago, especially those actively looking for work.

I know in at least some other countries they have the concept of "spent" convictions where at least some crimes roll off a person's record after a time.

I don't think 65 million people are going to go on to rape customers.

 

[G8tr]

A large percent of our population have criminal records / prison records - I've read 65 million or one in four adults. It is a shame to make that a life sentence of unemployment for any job, no matter what the crime, no matter how long ago, especially those actively looking for work.

I know in at least some other countries they have the concept of "spent" convictions where at least some crimes roll off a person's record after a time.

I don't think 65 million people are going to go on to rape customers.

Expungement is an option after a period of years, but doing it correctly may require the services of an attorney.


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[cooch96]

It is a shame to make that a life sentence of unemployment for any job, no matter what the crime, no matter how long ago, especially those actively looking for work.

So a child molester who got out after say four years should be given a job in daycare? C'mon, gimme a break.

You almost had a point but i think the way you worded it is a shame.

 

[daylatedollarshort]

So a child molester who got out after say four years should be given a job in daycare? C'mon, gimme a break.

You almost had a point but i think the way you worded it is a shame.

Please do not attribute things I did not write to me. I did not say anything about child molesters or day care. The issue is that no matter how minor a crime or unrelated to the job in question, or even if it happened decades ago, a criminal record can keep people from finding work:

65 Million Americans With Criminal Records Face Unprecedented Barriers to Employment

"These background checks are supposed to promote safety in the workplace, but many employers have gone way overboard, refusing to even consider highly qualified applicants just because of an old arrest or conviction. They're not even bothering to ask what the arrest or conviction was for, how far in the past it was, whether it's in any way related to the job, or what the person has done with his or her life since," said Owens"

 

[G8tr]

Please do not attribute things I did not write to me. I did not say anything about child molesters or day care. The issue is that no matter how minor a crime or unrelated to the job in question, or even if it happened decades ago, a criminal record can keep people from finding work:

65 Million Americans With Criminal Records Face Unprecedented Barriers to Employment

"These background checks are supposed to promote safety in the workplace, but many employers have gone way overboard, refusing to even consider highly qualified applicants just because of an old arrest or conviction. They're not even bothering to ask what the arrest or conviction was for, how far in the past it was, whether it's in any way related to the job, or what the person has done with his or her life since," said Owens"

Well, those with criminal records could band together and push state legislatures and Congress to pass laws that would put limits on such employer discretion. Somehow I don't think they will. What we are seeing is the de-criminalization of certain low level drug possession offenses, public intoxication, and the like. These are supposed to alleviate the burdens on our judicial system and prison population, as well as allow people to act stupidly within reason.


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[aja8888]

.................. What we are seeing is the de-criminalization of certain low level drug possession offenses, public intoxication, and the like. These are supposed to alleviate the burdens on our judicial system and prison population, as well as allow people to act stupidly within reason.



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Around here we are seeing those drug possession offenses and similar criminal acts turn into felonies and people given prison time at an alarming rate. Our prisions are full and we have lots of them.

It's becoming the "criminal attorney and court system full employment act" with ridiculously high attorney fees, court costs, penalties, and paying for worthless rehab classes. Not that I condone breaking the law, but a 1st time DUI around here is a minimum $10,000 event for the culprit.

And how do you propose those with criminal records ".. band together and push state legislatures and Congress to pass laws that would put limits on such employer discretion."?

 

[daylatedollarshort]

Around here we are seeing those drug possession offenses and similar criminal acts turn into felonies and people given prison time at an alarming rate. Our prisions are full and we have lots of them.

It's becoming the "criminal attorney and court system full employment act" with ridiculously high attorney fees, court costs, penalties, and paying for worthless rehab classes. Not that I condone breaking the law, but a 1st time DUI around here is a minimum $10,000 event for the culprit.

And how do you propose those with criminal records ".. band together and push state legislatures and Congress to pass laws that would put limits on such employer discretion."?

+1. Many of them aren't even allowed to vote, let alone have the skills, resources or political contribution backers to change the laws:

https://www.aclu.org/maps/map-state-criminal-disfranchisement-laws