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Uplifting Story from a Young Couple.........
Old 04-03-2008, 08:26 AM   #1
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Uplifting Story from a Young Couple.........

Ok, all the bad stories of how young folks today are clueless about finance. One of my clients asked me to look over his daughter and SIL's finances and give them an opinion. Here's what they have, he is 27 and she is 26,no kids.

1)They both work at stable jobs and do the max into their 401Ks.

2)They both fund a Roth for $250 a month.

3)They bought a house and put 20% down 2 years ago.

4)The daughter's grandmother left her $30,000, which she has not touched for 7 years and is now worth $57,000.

5)They have NO credit card debt, or student loan debt.

6)The SIL makes extra money working as a baseball coach for a small local college.

7)They have $20,000 in an emergency fund.

Nice folks, they are truly on the path to FIRE. It was nice to get to know them, and see not all young people are clueless...............
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Old 04-03-2008, 08:41 AM   #2
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For various reasons the 'hard luck' stories are going to get all the attention for a while. Folks like these will come under the heading 'good news is no news'.

Anyway, thanks for sharing. Good to hear stories like this.
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Old 04-03-2008, 08:53 AM   #3
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"People become what they observe" - Marshall McCluen
We are not shown people like the ones you mention. We see the spenders and those in debt; so people think that is the way to act and they become that.
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Old 04-03-2008, 09:04 AM   #4
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"People become what that observe" - Marshall McCluen
We are not shown people like the ones you mention. We see the spenders and those in debt; so people think that is the way to act and they become that.
makes me think of two quotes regarding news:

"Bad news sells"
"If it smells, it sells"
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Old 04-03-2008, 09:29 AM   #5
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"If it smells, it sells"
I thought that was "if it bleeds it leads"
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Old 04-03-2008, 09:47 AM   #6
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4)The daughter's grandmother left her $30,000, which she has not touched for 7 years and is now worth $57,000.
Wow! That is pretty impressive - - essentially equivalent to 9% increase year in and year out. There were some good years in there, but some bad ones as well and I think that is sure a nice return. Is it in equities, or what?
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Old 04-03-2008, 10:22 AM   #7
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It is very clear that they are not living the American dream; and according to GWB et al., they are not doing their part to shore up the economy by spending 'til they drop.

They should be ashamed of themselves!
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Old 04-03-2008, 10:26 AM   #8
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It is very clear that they are not living the American dream; and according to GWB et al., they are not doing their part to shore up the economy by spending 'til they drop.

They should be ashamed of themselves!
Agreed. The good news is, it's not too late for them to start. Their credit is probably fantastic, they'd surely be approved for a half-dozen high-limit cards in very short order. If they do the patriotic thing and max them out on HDTVs and designer clothes, they can be caught up in no time.
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Old 04-03-2008, 10:44 AM   #9
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Yes, it's never too late to start spending money like a drunken sailor.

At the very least, they should take their "economic stimulus" payments and purchase a Blu-ray player and some discs.
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Old 04-03-2008, 10:51 AM   #10
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I wish I had been that smart at their age.
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Old 04-03-2008, 11:15 AM   #11
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I'll bet I can tell you what's missing. No kids. I had a ton of savings before I had kids as well.
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Old 04-03-2008, 11:20 AM   #12
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I'm sure there's a Nintendo Wii player out there for them. . . . that seems to be the latest 'must have' device. . . .

I, too, am always happy to hear about young adults who have the right attitude about saving and investing. I often get on my soapbox at work (I work at a university) and drill into my young coworkers and students the notions of early investing, NOT taking out student loans if there is any other option, and thinking about the long term rather than the short term.

Advice I wish someone had given me (and made me listen!) when I was in my early 20's. . . . .
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Old 04-03-2008, 11:56 AM   #13
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Wow! That is pretty impressive - - essentially equivalent to 9% increase year in and year out. There were some good years in there, but some bad ones as well and I think that is sure a nice return. Is it in equities, or what?
Actually, it's 9.6%
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Old 04-03-2008, 12:10 PM   #14
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I'll bet I can tell you what's missing. No kids. I had a ton of savings before I had kids as well.
Well, what if I told you they gave up cable, and are using the monthly savings to build up a
baby fund" so they don't have to use credit to buy all the expensive stuff you need for new babies?

Like I said, they ARE planners..........
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Old 04-03-2008, 12:11 PM   #15
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Wow! That is pretty impressive - - essentially equivalent to 9% increase year in and year out. There were some good years in there, but some bad ones as well and I think that is sure a nice return. Is it in equities, or what?
Growth mutual funds...........
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Old 04-03-2008, 12:12 PM   #16
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Well, what if I told you they gave up cable, and are using the monthly savings to build up a
baby fund" so they don't have to use credit to buy all the expensive stuff you need for new babies?

Like I said, they ARE planners..........
Gave up cable for children? They're gonna look back one day and wonder what they were thinking!
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Old 04-03-2008, 12:21 PM   #17
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Gave up cable for children? They're gonna look back one day and wonder what they were thinking!
That was the wife's idea, and the husband was facing a "non-option" on that idea so he went with it.........
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Old 04-03-2008, 12:30 PM   #18
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And here I am with no tv and no kids...
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Old 04-03-2008, 12:37 PM   #19
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Growth mutual funds...........
That's great!

The reason I asked is that VGSMX (Vanguard Total Stock Market Index) didn't do nearly as well, according to the plot at the bottom of https://personal.vanguard.com/us/fun...BarChart=false .

VWUSX (Vanguard U.S. Growth Fund) did much worse during that time period:

https://personal.vanguard.com/us/fun...FundIntExt=INT

Assuming they are being totally forthright with you, I am thinking that they sure picked a good fund!
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Old 04-03-2008, 12:54 PM   #20
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"People become what they observe" - Marshall McCluen
We are not shown people like the ones you mention. We see the spenders and those in debt; so people think that is the way to act and they become that.
Exactly. When I was studying communication in college we called this "Perceived Mediated Reality Syndrome." If you watch it on TV enough, even in fictional shows, you start to think what you are seeing is the norm.
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