Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 04-25-2013, 01:19 PM   #121
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,914
Quote:
Originally Posted by mickeyd View Post
Learning how to handle ones own financial situation is not a difficult task for the majority of average American citizens. All they lack is motivation.
I'm sorry but I don't see any reason to believe either of these assertions. It is difficult for the "majority of average American citizens" - and that's because it actually is a difficult realm of knowledge to understand - and that's despite quite extreme motivation. I think we really need to be a bit more compassionate toward those who fail to meet our own expectations regarding financial skills and knowledge, and not regard them in such a prejudicial manner.
__________________

__________________
bUU is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-25-2013, 01:35 PM   #122
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,530
Quote:
Originally Posted by Sesq View Post
I have changed jobs five times in the eighteen years I have worked since college. Each time, it was time. If I was in DB plans exclusively I'd have only vested in two or three, and they would be stuck in time in terms of their 1% times years served times old rate of pay, most likely w/o any inflation adjustment.
+10000000!

As I was watching this Frontline documentary, I told DW "Thank goodness I'm not stuck with a pension!" Then I realized my current job does have a pension but there is no way I place any positive value on it because it is just an anchor. I prefer the ability to jump ship when the time comes (due to my goals and interests, or due to the organization's increasing suckdom).

I have posited that one of the problems where I work is actually the pension system. It retains all the good for nothings that want nothing more than to chill for 30 years then collect a permanent paycheck. Meanwhile all the ambitious talent leaves to take a chance in private industry for potentially bigger reward.
__________________

__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 04-25-2013, 02:22 PM   #123
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
The bold face lies by the loaded fund reps are no different from the daily BS our politicians tell us. We are conditioned to being lied to ... really no surprises here.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 04-25-2013, 03:13 PM   #124
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Quote:
Originally Posted by bUU View Post
I'm sorry but I don't see any reason to believe either of these assertions. It is difficult for the "majority of average American citizens" - and that's because it actually is a difficult realm of knowledge to understand - and that's despite quite extreme motivation. I think we really need to be a bit more compassionate toward those who fail to meet our own expectations regarding financial skills and knowledge, and not regard them in such a prejudicial manner.
I stand by my assertion that the great majority of my fellow citizens are very capable of learning simple investing techniques and financial theory and are capable of applying it to their own special situation. For example, this entire ER community is full of everyday folks who have done it and continue to learn.

You are selling them short by indicating that it is too difficult. Thermodynamics is difficult. Personal finance is not.

I fail to see what compassion/prejudice has to do with any of this.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 04-25-2013, 03:25 PM   #125
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by bUU View Post
I think we really need to be a bit more compassionate toward those who fail to meet our own expectations regarding financial skills and knowledge, and not regard them in such a prejudicial manner.
Providing for one's own retirement through prudent saving is not hard. To assert that some people just are not capable of mastering the skill seems a bit condescending and insulting. Is it really harder than filing income taxes, casting an intelligent vote, or effectively serving on a jury (other things we expect of citizens)? Let's trust people to succeed and make it clear that this is in their own hands--yes, that means accepting that some will fail.

On the other hand, I think it's useful to go part of the way and expose people to the idea of saving for retirement as part of their formal education. I agree it may not be effective, but I think it goes together with the reason we include other items like civics and history in our mandatory curricula: it helps people function as citizens and productive members of society. And, if we all are on the hook to bail out people who fail to provide for themselves financially (and we apparently are, nothing I see happening today makes it look like that is going to change) then it is good for the "ants" that everyone be exposed to the information: the more voters who join the colony, the better.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 04-25-2013, 03:43 PM   #126
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 1,712
Quote:
Originally Posted by FUEGO View Post

Maybe Hiltonsmith (economist mutual fund researcher) ... ("my retirement plan is 'fingers crossed and pray basically' "). I mean, really? You are literally writing a dissertation on this stuff and that is all you have figured out?
In the first 5 minutes of the show when they showed the young economist, I think it was Hiltonsmith, saying basically he had no plan for retirement, I thought to myself, "What the heck type of economist is that?" FWIW you can always save after-tax if you don't like the fees/terms of 401(k)s.

-gauss
__________________
gauss is offline   Reply With Quote
Old 04-25-2013, 03:49 PM   #127
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 1,712
Quote:
Originally Posted by mickeyd View Post

Hell, today's youth have big problems composing a grammatically correct paragraph or solving a simple algebraic problem in school today. Do you really want them to be studying about stock market works and which asset allocation is best depending on ones time horizon and risk tolerance?

Learning how to handle ones own financial situation is not a difficult task for the majority of average American citizens. All they lack is motivation.
Wouldn't need to teach them about asset allocation and stuff, but teaching and illustrating the results of compound interest would be extremely valuable.

Realizing that every year you put off starting to save comes off the steep right-hand side of the exponential curve that governs compound interest accumulation is something you want to learn as early in life as possible.

-gauss
__________________
gauss is offline   Reply With Quote
Old 04-25-2013, 03:55 PM   #128
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 136
Quote:
Originally Posted by LRDave View Post
Was anyone else surprised that the big investment bank execs allowed themselves to be grilled like?
Very!
__________________
serie1926 is offline   Reply With Quote
Old 04-25-2013, 04:35 PM   #129
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Quote:
Originally Posted by mickeyd View Post
. Thermodynamics is difficult. Personal finance is not.
For me personal finance is difficult, thermodynamics is not.

When I worked at NASA I met vastly intelligent people a number of whom could not manage their finances. Sitting at the lunch table one had a block of properties & investments and the next in debt over his head. The permutations of the market are more difficult to calculate and especially predict then nuclear reactions.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 04-25-2013, 05:02 PM   #130
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,977
Quote:
Originally Posted by samclem View Post
On the other hand, I think it's useful to go part of the way and expose people to the idea of saving for retirement as part of their formal education. I agree it may not be effective, but I think it goes together with the reason we include other items like civics and history in our mandatory curricula: it helps people function as citizens and productive members of society. And, if we all are on the hook to bail out people who fail to provide for themselves financially (and we apparently are, nothing I see happening today makes it look like that is going to change) then it is good for the "ants" that everyone be exposed to the information: the more voters who join the colony, the better.
+1, well said!
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-25-2013, 05:10 PM   #131
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,977
Quote:
Originally Posted by mickeyd View Post
I don't know, I hear this from time to time. There are some things that we citizens should be able to learn on our own without official state sanction.

Hell, today's youth have big problems composing a grammatically correct paragraph or solving a simple algebraic problem in school today. Do you really want them to be studying about stock market works and which asset allocation is best depending on ones time horizon and risk tolerance?

Learning how to handle ones own financial situation is not a difficult task for the majority of average American citizens. All they lack is motivation.
I'm not sure kids who "have big problems composing a grammatically correct paragraph or solving a simple algebraic problem in school" can always be blamed on the school. In many (but not all) cases, the school is not the primary problem.

Many subjects that are taught could be "learned on your own."

And IMO, having knowledge of basic personal finance seems as important as history among other subjects. I don't think anyone was proposing kids should study retirement planning, asset allocation or the mechanics of the stock market. To me personal finance is topics like:
  • Wage income and occupations
  • Expenses and budgets
  • Taxes
  • Credit cards
  • Loans and banks
  • Savings and savings instruments
  • Life, home and auto insurance
  • Buying a home
  • Basic investing
  • Basic economics
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-25-2013, 05:50 PM   #132
Dryer sheet wannabe
 
Join Date: Apr 2013
Location: San Francisco Bay Area
Posts: 15
Quantum Theory is hard - Thermodynamics is not.

I just saw 'The Retirement Gamble' on-line - thanks for the heads-up.
It made me go back and look at the fees for my 401k - I guess we have a pretty good plan - my work 401k plan has more than $4.5 billion under management and is the 63rd largest in the US.

I have my 401k distributed as such:
 
Fund
Percent
%Fee
US Small/Mid Eq
34.0%
0.73%
US Large Eq
34.0%
0.03%
Non-US Eq
13.4%
0.13%
2020 Target
12.9%
0.35%
US Bond
5.7%
0.04%

So it looks as if I only have one that is relatively high.
Attached Images
File Type: jpg Sample 401(k) Scenario.jpg (89.5 KB, 9 views)
__________________
bluztuzumab is offline   Reply With Quote
Old 04-25-2013, 07:01 PM   #133
Recycles dryer sheets
racy's Avatar
 
Join Date: May 2007
Posts: 481
Quote:
Originally Posted by Badger View Post
+1
I was in academia and said this for 40 years. No one with any swing paid attention. On occasion when the time was right I would take an hour from regular class time for discussion and examples.

Cheers!
Good for you. Likewise, I would meet with all new employees in my mfg department and show them a personalized forecast of wealth (using their age & wage, etc.) if they participated in our 401k. Mid-20's, even on manufacturing wages, could easily become millionaires. Many of these new employees, even after going through HR orientation, were not aware of the 401k program. You can lead a horse to water but you can't make him drink.... too many just don't have the financial curiosity, I fear.
__________________
The Big Lebowski: Are you employed, sir?
The Dude: Employed?
racy is offline   Reply With Quote
Old 04-25-2013, 09:54 PM   #134
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by FUEGO View Post

I have posited that one of the problems where I work is actually the pension system. It retains all the good for nothings that want nothing more than to chill for 30 years then collect a permanent paycheck. Meanwhile all the ambitious talent leaves to take a chance in private industry for potentially bigger reward.
Do you work in the military?
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 04-25-2013, 10:01 PM   #135
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by bluztuzumab View Post
Quantum Theory is hard - Thermodynamics is not.

I just saw 'The Retirement Gamble' on-line - thanks for the heads-up.
It made me go back and look at the fees for my 401k - I guess we have a pretty good plan - my work 401k plan has more than $4.5 billion under management and is the 63rd largest in the US.
I always found thermodynamics difficult.

But the bigger point from your post is the 10% employer match in the 401k.....most people are lucky to get 3% or 4%, if they get any match or even have a 401k.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 04-26-2013, 05:12 AM   #136
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 1,914
Quote:
Originally Posted by samclem View Post
To assert that some people just are not capable of mastering the skill seems a bit condescending and insulting.
It isn't actually. Ask the people who are in that situation. There are several right here in this thread (myself, among them). How about asking us how we feel about having these matters labeled "difficult" instead of assuming how we would feel about it?

Again: This is hard stuff, no matter how much the people who find it easy try to convince other people otherwise.

Quote:
Originally Posted by samclem View Post
Is it really harder than filing income taxes, casting an intelligent vote, or effectively serving on a jury (other things we expect of citizens)?
Yes. It is. Annuities. Whole Life insurance. Backdoor Roth Conversions. 12b-1. Asset Allocation. Coupon. I-Bonds. TIPS. Tax-managed. Umbrella policy. Revocable Trust. Long term care (something for which even folks here cannot provide an answer straight enough to be operational for most Americans). And so on.

Now I learn that one of the states actually charges income tax on ostensibly pre-tax contributions to 401(k) plans. That throws yet-another wrench into the machine, for my friend living there (and makes some of the advice I've given her in the past somewhat suspect).

No: Not easy.

Quote:
Originally Posted by samclem View Post
Let's trust people to succeed and make it clear that this is in their own hands--yes, that means accepting that some will fail.
If it was so easy, given how motivated everyone is in this regard, why would they fail? Sorry, but this whole "those who fail financially are lazy" line of reasoning is offensive.
__________________
bUU is offline   Reply With Quote
Old 04-26-2013, 08:40 AM   #137
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,530
Quote:
Originally Posted by nun View Post
Do you work in the military?
I do work for a couple of generals but not in the military. And I do frequently work in a military installation (like today). I'm a civilian and don't work in the defense industry at all.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 04-26-2013, 08:42 AM   #138
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,530
Fantasy football picks are hard.

Thermodynamics, quantum mechanics, and personal finance/investing are easy.

What if the government (SEC? DOL?) had a key indicator for mutual fund efficiency like the EPA does for fuel economy? Something that took expense ratio and annual turnover into account.

For example, have a scale where each fund receives a numeric score from zero to 100. Mutual Fund Efficiency = 100 - (ER%
* 100) - (% Turnover)

So for Vanguard's 500 Index Fund (Admiral Class) VFIAX: Mutual Fund Efficiency = 100 - (.05 * 100 ) - 4
Mutual Fund Efficiency = 91

Take a fund that has ER's over 1% and crazy turnover (many actively managed funds), and they get a zero lol.

Of course having some kind of "efficiency score" will never happen given money management's strong lobby and deep pockets.

I think this type of score would do wonders for helping the average person pick the better choice for mutual funds in their 401k. It will never make them the next Warren Buffett, and won't ever allow them to pick high flying mutual funds. But we aren't talking about minting billionaires here. We are talking about allowing people to save in a reasonably diligent manner for their own retirements. You could do a lot worse than picking funds with high efficiency scores as I have laid out. I'd lobby for regulations or legislation requiring these scores to be prominently displayed all over the mutual fund info in 200 point font.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 04-26-2013, 09:22 AM   #139
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by FUEGO View Post
Of course having some kind of "efficiency score" will never happen given money management's strong lobby and deep pockets.

I think this type of score would do wonders for helping the average person pick the better choice for mutual funds in their 401k.
The ERs have to be disclosed and the fees/turnover of funds are very clearly displayed in the prospectus and online. The illustration showing the effects of fees for each $10K invested couldn't be clearer. This illustration and other language in the prospectus is included due to mandates from DC, so don't be so sure legislation can't change things. And, despite the very clear portrayal provided, many people don't pay it much attention.
I think in this regard (giving info on costs) there's little to be gained by mandating more or making it still simpler. The "consumers" aren't paying attention to the info. I don't think they'd pay attention to car mileage ratings, either, if they believed the car model with the most chrome would drop a $100 bill out of the tailpipe each morning.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 04-26-2013, 09:59 AM   #140
Recycles dryer sheets
 
Join Date: Nov 2010
Location: Little Trailer Down By The River
Posts: 172
A required course in personal finance will as all the required courses do. You can have the required course, it can have the required information available in that course. A few will learn and grasp the information, most will cram for the examination to pass knowing nothing and the rest will slide through by the skin of their teeth. I gave our children "The Boglehead Guide to Investment", they read it, said oh that makes sense, who knew it was so easy, and proceeded to live their lives and progress as humans, saving and investing being a small (albeit important) part of life.

To MickeyD's point, there are required course in English (grammar and composition), mathematics, history, etc. Yet, all too many graduates cannot compose a paragraph in standard English, are innumerate and cannot place the Civil War in the correct decade. Based on an adult lifetime of working with youth, the general outcome of our educational system seems to be a contempt for learning.
__________________

__________________
"Here's to them who would read,
Here's to them that would write.
There's none ever feared that the Truth would be heard,
But those whom the Truth would indict."

Robert Burns
poorcarver is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:33 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.