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Old 09-24-2015, 06:01 PM   #41
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Yeah, I know some folks who fit this description also. It may work for a while, especially while you are still in your 50s/early 60s, but what happens when you get older and can't do those odd jobs anymore? And you've pretty much exhausted your savings?
Social Security maybe?

I would never try to live like these people live! But they seem to manage somehow. Not my cup of tea.
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Old 09-24-2015, 06:03 PM   #42
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The Difference LBYM means

This guy is not on food stamps. He has/will have a brand new house on the lake, drives a convertible, $200k+ family income, goes fishing with his family. What is the big deal he has $10 in checking. Might have $2 million portfolio and a wife with a pension. Or not, who cares it is his life.
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Old 09-24-2015, 06:08 PM   #43
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This guy is not on food stamps. He has/will have a brand new house on the lake, drives a convertible, $200k+ family income, goes fishing with his family. What is the big deal he has $10 in checking. Might have $2 million portfolio and a wife with a pension. Or not, who cares it is his life.
Nope, not even a million. He is planning on having a million by the time he is 60. And he does have an USAF pension at 60 as well.

It doesn't matter how much he has in checking, but when a check (or debit card) bounces, there is a major problem being able to retire in any kind of lifestyle.
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Old 09-24-2015, 07:42 PM   #44
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OP's story reminded me of my 54-year-old friend who hasn't had a steady job since he was laid off at 41. He currently lives with his girlfriend and, in lieu of rent and utilities, has been making improvements on her house. He proudly showed me photos of his latest project on his brand-new giant smartphone.

He got a modest inheritance when his mother passed. He used most of it to buy a new boat and fix his Harley. He has lots of "toys," most of which don't run. Prior to the inheritance, he had consumed all his savings and was living on proceeds from the sale of his house.

Since getting laid off 13 years ago, he has worked occasionally as a contractor in his field, which pays quite well. But this has been phasing down to almost nothing. He told me he turned down a 3-month gig recently because he had the inheritance money now. I asked him how long that would last and he said, "well, maybe 6 months, unless I decide to fix the transmission in the truck, so I can haul the new boat to the lake."

He was here for a Labor Day gathering and BBQ at our house. I overheard him telling people he was "retired." He was getting the usual "you're so young" reactions. I just rolled my eyes and flipped the chicken thighs.
Great story ROFL
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Old 09-25-2015, 12:29 AM   #45
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I just got back from a fishing trip with some relatives. One of the relatives had a vehicle issue and it required a new serpentine belt, as the old one broke. He is 55 years old, about 10 months younger than me.

We could not get the hood open as he had not used the truck in a year or so. The latch was rusted shut. We eventually did get it open and went to get the new belt. He had not used the truck much, but of course he needs it...

We went to the auto parts store and picked up the belt and a few other items. ~$65 total. His debit card was declined, so he used a different one. On the way back in my truck, he called the bank to see what happened. Evidently he only had ~$10 in the account…

This relative just got laid off due to the company trying to save money and reduce the higher paid ($120K) employees. He received ~$6300 for vacation balances and deposited the check in the ATM, so it was not immediately available. But I would NEVER let my account get that low. Especially if I got laid off. He had 2+ weeks official notice, and many more weeks unofficial writings on the wall. When my balance gets below $1,000 I get worried. (Meanwhile, I wish for a layoff and severance. He gets an additional 8 weeks)

How can you only have $10 in the main bank account WTF? His wife also makes $100K+ a year. He is interviewing for a new position at a different mega-corp.

He is also going to tear down his lake home and build a larger lake home (in addition to his regular home). He showed me the plans. $600K for just the house. It has a sauna, steam room, 3-car garage, etc. He needs the three car garage as he ‘needs’ one car each for him and his wife, a convertible and a truck.

He said he should get some money from an inheritance in a few years to pay off about half of the mortgage.

He plans on retiring in 5 years or so, and maybe picking up a job at Home Depot or other place like that. Yeah, right… Plan on working until 90, or a large inheritance.
I am maxing out my 401k and Roth($30,500) and buying $20k in mega corp stock at a discount each year.

But I only keep an average balance of $1000 in my checking account so I can relate with your friends situation.

I use my Fidelity Amx card for almost all purchases and I never use checks or my debit card.

I don't like a big balance in my main personal checking account.
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Old 09-25-2015, 03:53 AM   #46
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How can you only have $10 in the main bank account WTF? His wife also makes $100K+ a year. He is interviewing for a new position at a different mega-corp.
Has he ever involuntarily lost a job before?

I could see how this sort of disruption/transition could cause a breakdown in other areas of his life (such as the low bank balance).

I have occasionally "not fired on all cylinders" when I have had enough things happen in my life simultaneously and cannot operate my normal systems (which have plenty of robustness baked into them).

Only the most immediate and urgent things get done. Major loss of efficiencies can happen while operating in this "reactive" manner until eventually things get back to "normal". Very stressful (but probably a function of an individuals own personality-temperament)

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Old 09-25-2015, 04:02 AM   #47
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I cannot tell you how many really good friends I have who fit this description, lol. Good people, getting by, and living in the moment. Lots of fun to hang out with, certainly, but not discuss SWR and such. Variety is indeed the spice of life.
LOL
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Old 09-25-2015, 04:07 AM   #48
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Several years later, in the mid-1990s, my bank boosted its minimum balance to keep a separate, linked savings account. I didn't want to tie up the extra cash in there at the expense of my outside investments which were preforming much better. So, I consolidated the two accounts into a single checking account, basically eliminating the need for the bounce-free protection because the savings account cushion was now blended with the checking account. Since that time, I simply make sure to keep about $750 over the minimum daily balance amount to avoid monthly fees. The checking account pays little or no interest (the bank changed its terms over the years), no big deal.
FWIW, CapitalOne 360 Checking (formerly Ing Direct) still has a very attractive "bounce-protection" feature available.

Line of credit with no annual fee is linked to checking account. No fees to make transfers (either manually or automatically if the need arises) and the interest is very nominal.

A few years ago it seemed that many banks and credit union were falling all over themselves to eliminate lines of credit not backed by hard assets.
Probably a fallout from the credit crisis.

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Old 09-25-2015, 06:47 AM   #49
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Has he ever involuntarily lost a job before?

I could see how this sort of disruption/transition could cause a breakdown in other areas of his life (such as the low bank balance).
Not the first time, but not always unexpected in some tech industries that come and go with project demand. Even so, I would have a larger stash on hand to be able to cope with the occasional downturn. I am sure there was a bit of stress due to no money. That is his life, even since we were roommates in college. Never any money.

And I won't even go into the story of the window I got pushed through this week.... Unprovoked aggression, no alcohol. The Sheriff did a nice job though.
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Old 09-25-2015, 07:39 AM   #50
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FWIW, CapitalOne 360 Checking (formerly Ing Direct) still has a very attractive "bounce-protection" feature available.

Line of credit with no annual fee is linked to checking account. No fees to make transfers (either manually or automatically if the need arises) and the interest is very nominal.

A few years ago it seemed that many banks and credit union were falling all over themselves to eliminate lines of credit not backed by hard assets.
Probably a fallout from the credit crisis.

-gauss
My bank, Bank of America, still has its bounce-free checking credit line which I haven't tapped into since I consolidated the linked accounts nearly 20 years ago. No annual fee, of course.
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Old 09-25-2015, 08:07 AM   #51
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I am maxing out my 401k and Roth($30,500) and buying $20k in mega corp stock at a discount each year.



But I only keep an average balance of $1000 in my checking account so I can relate with your friends situation.



I use my Fidelity Amx card for almost all purchases and I never use checks or my debit card.



I don't like a big balance in my main personal checking account.

I can relate. I don't worry too much about how much $$ is in my checking account for purposes other than paying the bills scheduled for that month. At the end of each month, the excess (less $500 or so for "fluff") goes either into a savings account or investments.

All purchases are made with a cc which makes life so much easier.
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Old 09-25-2015, 08:17 AM   #52
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Scary to find out you only have $10 in checking account....even scarier is the need to find a new high paying job at the age of 55 (assuming the need to replace the $120k salary that was lost). Sounds like he isn't worried.


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Old 09-25-2015, 12:31 PM   #53
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Our Credit Union requires a minimum of $500.00 in checking to earn interest (and you don't want to go below it) - it's a joke @ .1% earned interest. The same interest with the required savings account to be a member, but its minimum is only $5.00. We keep them as they are local, and it's nice to have a place to get cash in a hurry, cash a check, and free ATM after hours. Have our SS and taxable account quarterly dividends deposited in the savings. We have an ALLY savings (and checking) account we transfer money to for the .99% interest. This is a pain as you can't move money directly from the savings, and have to move it to the checking to get it to Ally. We don't keep more than about $1k to $2k in the checking as we have a debit card attached to it (ATM usage). We do not link the savings to the checking in case something bad drains the checking account - it could take awhile to get the money put back per my wife, a former banker. Meanwhile, easy to replenish checking from savings with online banking.
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Old 09-25-2015, 02:30 PM   #54
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I think it is a money management issue too. I would think most everyone on this board would have a clue the rough balance(s) in their accounts and especially know if $10 was going to clear. I'm still accumulating and try to keep 100% invested so my checking is just a grand or two. Worst case we have a line of credit $10k attached to the account and there is no charge for the transfer of funds but interest will start to accrue from day 1, seven percent I think is the interest rate right now. Much better than a bounced check, not that I have seen one of those for decades.

The system is set against people who live paycheck to paycheck though. DD who has struggles pays a fee to cash a check, buys groceries at a convenience store and waits for the car to break down instead of preventative maintenance. When I tell her it's free to deposit a check in a credit union or it's less expensive to buy items at a grocery store I'm always told, "It's only a few dollars" She just doesn't get it.

Lastly, I'm not sure waiting or expecting an inheritance is a valid money plan 😁. I know I'm not expecting one and I believe my siblings are of the same mind, but if I heard any of my kids mention that, I'd say keep waiting cause I'm hoping to die broke.


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Old 09-26-2015, 01:38 PM   #55
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Each month after reconciling our checking account, I generally drain off all but $1K and stick the rest in our Ally online account to take advantage of the .99% APY. If I need a quick infusion of cash, Ally will transfer it back a couple of days. Our checking account is also backed up by a savings account at the same bank that holds <$5k. Belt/suspenders mode, I guess.
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Old 09-26-2015, 11:26 PM   #56
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I keep 25K minimum in my checking which is 6 months of living expenses. The Credit Union pays 1.5% interest on balances up to 25K. Many years ago I would keep 1 month of expenses in checking and 5 months in a Money Market account but MM rates are pitiful now. With a relatively high checking account balance I worry about making impulse purchases but it hasn't happened so far. I wouldn't sleep well with $10 in checking. I started off in that kind of financial condition but didn't stay that way long.
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Old 09-26-2015, 11:34 PM   #57
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I keep 25K minimum in my checking which is 6 months of living expenses. The Credit Union pays 1.5% interest on balances up to 25K.

I think I'm with the wrong credit union...


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Old 09-26-2015, 11:47 PM   #58
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I think I'm with the wrong credit union...


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It's a sad state of affairs when we see !.5% interest on cash as good thing.
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Old 09-27-2015, 06:57 AM   #59
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OP's story reminded me of my 54-year-old friend who hasn't had a steady job since he was laid off at 41. He currently lives with his girlfriend and, in lieu of rent and utilities, has been making improvements on her house. He proudly showed me photos of his latest project on his brand-new giant smartphone.

He got a modest inheritance when his mother passed. He used most of it to buy a new boat and fix his Harley. He has lots of "toys," most of which don't run. Prior to the inheritance, he had consumed all his savings and was living on proceeds from the sale of his house.

Since getting laid off 13 years ago, he has worked occasionally as a contractor in his field, which pays quite well. But this has been phasing down to almost nothing. He told me he turned down a 3-month gig recently because he had the inheritance money now. I asked him how long that would last and he said, "well, maybe 6 months, unless I decide to fix the transmission in the truck, so I can haul the new boat to the lake."

He was here for a Labor Day gathering and BBQ at our house. I overheard him telling people he was "retired." He was getting the usual "you're so young" reactions. I just rolled my eyes and flipped the chicken thighs.
I could easily have written this post about my best friend from HS almost to the letter. He knows I have prepared differently and have no financial worries but he has no idea how well. On occasion when he gets into a difficult bind, I play with the idea of giving him a helping hand. Just as I get to the point of approaching him with the idea I find he has directed some new found money toward another instant gratification of some kind and I stop in time. He has had a fair amount of problems throughout the years as we both have that would make anyone depressed but has chosen a different path to try and cope. He methods will never change so all I can really do is be emotionally supportive during the hard times. He's a good person so it is sad that his choices have compounded his stress.

Cheers!
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Old 09-27-2015, 07:29 AM   #60
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I think I'm with the wrong credit union...
+1

Seriously - does the CU mentioned have a limited field of membership? Would you be willing to share the name of the CU?

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