The value of LBYM

[NW-Bound]

I recall one car that I bought in the last 20 years I told the sales person I was paying cash and he responded that he wasn't sure if I could do that and he had never heard of it

It seemed that is was so unusual that they had to caucus with management as to how to process a cash sale.

Perhaps the dealer had an incentive from the financing company.

With loss of that profit item, they had to figure out how to raise the price of the car?

 

[Taxman59]

When I bought my 2012 Ram, I wanted to pay cash, but they had an extra incentive, something like $500, if I financed through Chrysler Financial...Or Fiat-Chrysler Financial, or whatever they called it by then. So, I did that, got the extra $500 off, made a couple payments, and then paid it in full.

I did this as well. Finance through the local bank, get $500 off the price, and the salesman gets an additional $1000 if the loan is outstanding after 1 month. I made one payment, called the salesman and when he said that he had the bonus, I paid off the car.cost me about $50 to get a $500 reduction and to get the salesman another $1000!

 

[Running_Man]

Of course it is becoming more common in the United States! - With the decline of real wages for the working poor over the last 30 years and the elimination of Pensions and Unions, it will only get worse.


The working poor with a couple of minimum wage jobs have more 'Personal Responsibility' than you could possibly imagine. - I have known these people and they are far from lazy.


Lots of poor people were also common in the 1930s - I believe that those people were not lacking in personal responsibility or lazy either. And guess what? Social Security was not available until 1935 and Medicaid was not on the radar. There was no safety net for the thousands in soup lines (That were provided by Al Capone in a lot of cases).


For every complex problem, there is a simple solution that won't work. This pretty much sums up your suggestion.

There is a simple solution that works, save 20% of your income. It appears unattainable until your actual income is cut 20% and then you have to do something to live within this amount. The issue is there is a social cost to living in a situation where you are saving 20% of your income that most individuals are unwilling to live in such a situation.

In the words of Al Pacino, "every time, I knew the right path to take but didn't take it, every time, you know why?, it was too damned hard."

 

[FreeBear]

There is a simple solution that works, save 20% of your income. It appears unattainable until your actual income is cut 20% and then you have to do something to live within this amount. The issue is there is a social cost to living in a situation where you are saving 20% of your income that most individuals are unwilling to live in such a situation.

Agree with simple, but it's certainly not easy for most folks. The old rule of thumb used to be 10% savings rate, presumably for normal-aged retirement. Now I see that Fido and Wells Fargo are recommending at least 15%.

For early retirement, even counting on SS, I suspect the savings rate would have to be beyond 20% unless there is a big decrease in living standard upon retirement. I think we were in the 30-40% savings range. It wasn't so bad given our DINK (professional) status, but I can see this being much more challenging for lower wage folks with dependents.

 

[brett]

I have a SIL/BIL, 60 and 70 years old respectively, with no retirement savings, a mortgage, and now a reverse mortgage.

They have had many chances to 'learn' over the years. Including one bankruptcy in a previous marriage in her twienties followed by another credit crunch.
Yet they still go on vacation and put all the expenses on their credit cards.

Would we consider helping them? NO. Because the cards and the credit limits would be maxed out again before you could say 'jack robinson'. After all, that special $500 mail order shampoo gag is a necessity for her.

The only thing she has learned about LBYM during her lifetime is how to juggle her credit cards and credit limits. Would hate to live like that. But on the other hand she appears to deny herself nothing. As some religious types like to say....the end is near. You cannot fix stupid.

 

[SoReadyToRetire]

Said he liked his work fine, but he liked putzing around more.

Thanks--this made me LOL! Oh, to be able to putz all day ...

 

[Dtail]

Agree with simple, but it's certainly not easy for most folks. The old rule of thumb used to be 10% savings rate, presumably for normal-aged retirement. Now I see that Fido and Wells Fargo are recommending at least 15%.

For early retirement, even counting on SS, I suspect the savings rate would have to be beyond 20% unless there is a big decrease in living standard upon retirement. I think we were in the 30-40% savings range. It wasn't so bad given our DINK (professional) status, but I can see this being much more challenging for lower wage folks with dependents.

Saved every year, but not 30-40% and still retired at 57. However we cut our expenses by 60% from its all time high.

 

[NW-Bound]

... Said he liked his work fine, but he liked putzing around more.

Thanks--this made me LOL! Oh, to be able to putz all day ...

That was my paraphrasing.

What my son actually said was that his job was interesting, but he had other interests that he would give higher priority if he achieved FI.

I did not ask what those were, but I knew he was into disc golf, archery, bowling, golf, dirt bike riding, etc...

I just lumped it all into "putzing" for simplicity.