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Old 02-20-2015, 04:02 PM   #41
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During grad school at Tennessee in the early 70's, TA's were allowed to participate in "faculty lunch." This was a pretty nice buffet for $1 offered every weekday. I'd eat until I could eat no more and leave with a sandwich wrapped in a napkin to have for supper. It was a great deal since we'd focus on protein and veggies. Whatever we had stashed in our rooms was usually carb based......
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Old 02-20-2015, 04:50 PM   #42
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It was a great deal since we'd focus on protein and veggies. Whatever we had stashed in our rooms was usually carb based......
Aren't veggies generally carb based?
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Old 02-21-2015, 07:18 AM   #43
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We usually had a stash as well...




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Old 02-21-2015, 08:34 AM   #44
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I have thought about "the savings question" a bit, since my eldest just entered the work force. She asked for my opinion, so I gave her the basics (fund the Roth, blah, blah).

But I did couch the advice by saying "the advice is only good if everything 'financial' stays about the same, but that is not guaranteed". Not that I think it's likely, but there's always the chance that somebody presses the reset button. Then the guy/gal that lived like a college student is in worse shape than the spendthrift (has a cheaper sofa to exchange for 22 bullets, LOL!). And of course there's the financial penalties for having assets and income (student aid comes to mind) and perks for being poor (food stamps, etc). Not that I BELIEVE that's the way to go! But I wanted to provide a complete picture of the situation....I didn't want her to come to me after the reset button was pressed and blame me for living like a college student "for nothing".
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Old 02-21-2015, 10:07 AM   #45
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In the articles I've read he doesn't tell people to buy or not buy houses - he just says that historically they usually keep pace with inflation so they may not be the great investment many think they are.

http://finance.yahoo.com/news/we-re-...174038372.html

"There is an argument for helping low-income people get a house,” says Shiller. “I think it makes them feel better about their attachment to this country and themselves.” But he doesn’t believe there’s any reason to advise people towards owning a house instead of starting a business or paying for an education.

Owning a home appeals to certain people, according to Shiller, people who are upwardly mobile with young children. But, he warns, owning a home is an incredible nuisance that can trap people and end up costing a lot in upkeep. “I’m a homeowner but there’s a lot of stuff that goes wrong, we had our heat go out the other day,” he jokes."
Still, he bought a second home with his winnings. Maybe he really likes the beach, and if so it was likely a good decision. I would expect someone who insists that houses make low to middling investments would have looked for a different job for that money.
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Old 02-21-2015, 10:23 AM   #46
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He certainly hedged his bets with his opinion on home ownership. No one could be offended with his statement as he certainly covered all the angles.


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Old 02-21-2015, 10:34 AM   #47
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Shiller is a Nobel Prize winning economist who is a principal in many successful high margin businesses, plus having a chair in the department of economics at Yale.

Does he really need to maximize cash returns on everything he owns?

Ha
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Old 02-21-2015, 11:29 AM   #48
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Please don't make me eat those generic frozen pot pies every day for dinner again!
No student living for me... I've moved up to Smart Ones frozen dinners.
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Old 02-21-2015, 11:55 AM   #49
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Shiller is a Nobel Prize winning economist who is a principal in many successful high margin businesses, plus having a chair in the department of economics at Yale.

Does he really need to maximize cash returns on everything he owns?

Ha
+1. I think the advice he gives his students and the general public is not the same advice he would give to his older self and likely well off age 50+ fellow Nobel laureates and business partners. Part of what we suggest for our kids to do now is the wisdom we learned from our own mistakes. We tell them not to get tied down to a big house right away. We did that ourselves because the conventional wisdom, or so we thought at the time, was that houses can only go up and houses are great investments, right?

Shiller is just pointing out houses tend to keep up with inflation, they tie down your money and your free time and there may be better options.
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Old 02-21-2015, 12:20 PM   #50
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Shiller does not live like college students, because he does not have to. I am younger, and have less than he does (most likely), and I do not have to live like a student either. And I even have a 2nd home, because I can afford it.

I was fortunate to be working and saving during the boom years of 1980-2000. I hope my adult-age children will have the same opportunity I had, but there's nothing certain in life. They aren't living as college students either (my son bought an Audi S4), but I encourage them to save as much as they can.
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Old 02-21-2015, 01:23 PM   #51
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Three decades and counting. Enjoyed some nice gains in the late 90s but I remembered that line from the movie "Wall Street" which goes "enjoy it while it lasts kid, because it never does". It sure didn't last for me. Still made it to FI reasonably early, and what got me here was my persistent low spending rate. It began around 25% of AGI when I started working full time and has since dropped to less than 10% for everything except income taxes.

I don't think living this way for years on end would suit many college grads, especially those who have to dig out from under onerous student loan debt first. Today's students don't seem unhappy now because they will soon taste the freedom that comes from earning a full time wage. Those who see it as freedom to live well now won't look at saving 50% the same way as those who prefer freedom to control their time later. It gets harder to resist the splurge during the honeymoon first years on the job after the first few raises when they start thinking they'll be happy to work there forever. That and the fear of getting too old to enjoy it later.

I think Prof Shiller has a good idea but very few will choose to do it. Still I wouldn't offer this advice to anyone except close family (heirs) because it could be construed as a pessimistic view of a young graduate's future prospects.
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Old 02-21-2015, 01:58 PM   #52
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I don't think living this way for years on end would suit many college grads, especially those who have to dig out from under onerous student loan debt first. Today's students don't seem unhappy now because they will soon taste the freedom that comes from earning a full time wage. Those who see it as freedom to live well now won't look at saving 50% the same way as those who prefer freedom to control their time later. It gets harder to resist the splurge during the honeymoon first years on the job after the first few raises when they start thinking they'll be happy to work there forever.
I think this is an interesting point. There's a very different feeling to living like a student, with limited financial means, in your youth and doing so later when control over your time is perceived as more valuable and well worth the price of a simple, frugal lifestyle. Perspective is everything.
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Old 02-21-2015, 05:57 PM   #53
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I guess it also depends on what kind of college student lifestyle you are living. Our oldest lives in a nice apartment where at least one of his professors and other professionals live, has a nice car, has a kitchen and knows how to cook, eats healthy food, etc. so that is my frame of reference for suggesting he consider not spending too much more right away and instead invest the difference. If he were living in a house with 6 people, eating Ramen and getting around on a skateboard I could see where he would want to upgrade that kind of lifestyle significantly as soon as possible after graduation.
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Old 02-21-2015, 07:28 PM   #54
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Shiller is a Nobel Prize winning economist who is a principal in many successful high margin businesses, plus having a chair in the department of economics at Yale.

Does he really need to maximize cash returns on everything he owns?

Ha
Fair point, I am sure the answer is no. As I read back , I see he was talking to students to begin with.
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