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Old 09-16-2013, 07:20 PM   #101
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Here is my sentiment.

Compared to when my parents were my age, I think the finance every John and Jane have to deal with nowadays is much more complicated. In the old days, you went to work, did your work, got paid, saved a little money, and got your company pension and social security after you reached your retirement. (I know I am simplifying things, but you probably didn't need a high IQ to navigate to old age as much as we do now....) I know people invested money too, but not to the extent we do now. In this modern day and age, everyone needs to know a lot about finance. They cannot just go to work, and get paid and go their married ways..
That was during the golden years when the US was the only real game on the block. In addition a large part of the worlds population was walled off from our economy. If you go back to the generation of our grandparents, you worked until you dropped. Pensions were only invented in the late 1880s and spread slowly. Social security was not around effectively until the 1940s etc.
Perhaps society is reverting to the type of society we had before the 1930s where one was much more on ones own.
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Old 09-16-2013, 09:54 PM   #102
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Originally Posted by modhatter View Post
I agree that people don't need to know everything about investing. Furthermore, the things about investing that are important to know (minimizing costs, having an asset allocation within your risk tolerance, etc)

Just remember those things you mentioned:
1. Minimizing costs
2. Having an asset allocation
3. Within your risk tolerance

People totally new to this world, have no idea what "costs" are and when they learn, what is reasonable and what is not and the effects of these costs long term.

Second, "having an asset allocation". Most don't even know what that means, no less figuring out what combination would fit your risk tolerance.

Last, Risk tolerance. I don't think someone could informatively answer that question before they understood the "market" and the history of stocks bonds, and their inherent risks and advantages.

So, yes, easy for you to make these statements because you have learned all the basics. But for someone just entering this new world, they haven't a clue what your talking about or at least an "informed" understating of what your talking about.

If your family didn't teach you about the market, and your school didn't teach you, you know squat. So in the beginning you can be clueless and feel overwhelmed. Just my opinion.

By the way. I just went on Amazon and read all the reviews on the book that a couple of posters mentioned.
Millionaire Teacher. It seems just the ticket for a "newbe" I wound up ordering it for my son. I think judging from the comments that the author will do a better job than I could, and besides our kids don't think we know anything anyway.
LOL. I just ordered it from Amazon for my daughter. I hope it sinks in with her.
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Old 09-16-2013, 10:56 PM   #103
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That was during the golden years when the US was the only real game on the block. In addition a large part of the worlds population was walled off from our economy. If you go back to the generation of our grandparents, you worked until you dropped. Pensions were only invented in the late 1880s and spread slowly. Social security was not around effectively until the 1940s etc.
Perhaps society is reverting to the type of society we had before the 1930s where one was much more on ones own.
Maybe you are joking? More people are on food stamps than ever before. A smaller portion of our population is employed since the ramp up of female workers was complete decades ago; people stay on unemployment for almost 2 years, and when that is up a larger portion of them than ever before get disability payments. Not quite like the years prior to WW2.

Ha
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Old 09-17-2013, 07:40 AM   #104
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Haven't read through this entire thread, but even if you participate on this board, are well above average and do all the right things, there is no guarantee you will have smooth sailing in your retirement years.
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Old 09-17-2013, 10:10 AM   #105
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Ha, I don't know if that is absolutely true. My wife pulls in far more at a private job as a software engineer than she probably would in the public sector. The only downside to private employment is the 401K limits are too low. In the public sector you can put in 30 years and have a COLA pension that equals 70% of your highest 3 years or something like that.

Be careful lumping all public pensions into one category! I was a professor for 30 years; my pension: NON-COLA, 45% of LAST FIVE years (1.5% times 30 years). That is quite a bit different than what you quoted, especially 20 years into retirement, with no COLA.
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Old 09-17-2013, 04:08 PM   #106
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Maybe you are joking? More people are on food stamps than ever before. A smaller portion of our population is employed since the ramp up of female workers was complete decades ago; people stay on unemployment for almost 2 years, and when that is up a larger portion of them than ever before get disability payments. Not quite like the years prior to WW2.

Ha
+1

Cheers!
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Old 09-18-2013, 05:13 PM   #107
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LOL. I just ordered it from Amazon for my daughter. I hope it sinks in with her.
Just did the same. But I'm going to read it before I give it to her, hehe.
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Old 09-20-2013, 10:14 AM   #108
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As others have said there isn't much to the general idea. Granted the most efficient methods are complex (and often hotly debated) but it is certainly doable regardless

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My personal experience with teaching personal finance is though it creates exposure, it doesn't carry much follow through in their lives as the students treat the class as something to pass as opposed to opening doors for a way of life. I recently read an article from a financial guru who I have forgotten his name opined an article that struck home with me. He said classes in school are meaningless concerning personal finance. It is not a class, but a way of life that must be instilled at an early age progressing through their formative years. He had a book that laid out the process. Of course the only problem with that is many kids do not have parents engaged in this part of their life, or do not, or are unwilling to learn it themselves.
There are numerous studies\articles focusing on the ineffectiveness of financial education classes. For example:
Buttonwood: Teacher, leave them kids alone | The Economist

IMO - the biggest issue is that most of these classes take place in HS or college and last for only short periods of time. I agree that the best time is much earlier in life. By the time these classes are taken habits have already been formed that a short class isn't going to fix long term

Two additional things I could see that would help:
1) Change retirement plans from Opt-in to Opt-out. Its a lot easier to set spending based on your first paycheck amounts than to adjust down later. Plus it seems people don't like checking boxes
Shlomo Benartzi: Saving for tomorrow, tomorrow | Video on TED.com
2) Take a quick class before getting your first 'real' job - when the effects of compound interest can show the biggest gains (dangle the golden carrot) from small contributions
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Old 09-21-2013, 02:25 PM   #109
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Article states 1 in 12 people between 16 and 64 are receiving Social Security Disability benefits; although the criteria are subjective, and many people have health problems which might have been accommodated on their previous job, it is terribly hard for them to find another job once laid off. That is the real problem: lack of new job creation.

Of course there are always some who game the system...the article touches briefly on that angle.

Amethyst

U.S. disability rolls swell in a rough economy - The Washington Post
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Old 09-22-2013, 03:22 PM   #110
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Just did the same. But I'm going to read it before I give it to her, hehe.
I did the same thing for my sister. Great book( Millionaire Teacher) wish I'd had that simple tool many years ago. Due to family dynamics I told her how good it is, and here's the link to it. Had nothing to do with the money, I want her to feel empowered that she did it, nothing her kid brother bought her.

MRG
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Old 09-29-2013, 04:03 PM   #111
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I did the same thing for my sister. Great book( Millionaire Teacher) wish I'd had that simple tool many years ago. Due to family dynamics I told her how good it is, and here's the link to it. Had nothing to do with the money, I want her to feel empowered that she did it, nothing her kid brother bought her.

MRG
I've read it and mailed it off to my daughter. I agree...I wish I had access to that wisdom when I first got a job. It reminded me of all the financial fumbles I made early on, and got me wondering about how much better I would have done without those. The author does constantly ring the index fund bell over and over, but who am I to say that's not the best approach for the target audience. I'm not the target audience, but wanted to be able to discuss it with my daughter.
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