Saving Money is STUPID!!!

[Huston55]

Well I don’t know you, but I do know him and I can assure that he is very smart. One of the smartest guys I dealt with in my Investment Banking days, which more than likely makes him a lot smarter than you.

But thanks for your constructive comment...

No offense intended. But, dumb advice is dumb advice, regardless of where it originates: the OP’s Aunt or your smart Investment Banking friend. BTW, recognizing dumb advice, [-]even[/-] especially from smart people, is very constructive and has assisted many here, at BH and elsewhere to accumulate and retain their assets.

 

[ivinsfan]

No offense intended. But, dumb advice is dumb advice, regardless of where it originates: the OP’s Aunt or your smart Investment Banking friend. BTW, recognizing dumb advice, [-]even[/-] especially from smart people, is very constructive and has assisted many here, at BH and elsewhere to accumulate and retain their assets.

Got to agree, that comment from the banker was either sarcasm which I despise..(my grandad said that sarcasm is the lowest form of ignorance) or akin to telling someone to cut off their nose to spite their face...

 

[LARS]

No offense intended. But, dumb advice is dumb advice, regardless of where it originates: the OP’s Aunt or your smart Investment Banking friend. BTW, recognizing dumb advice, [-]even[/-] especially from smart people, is very constructive and has assisted many here, at BH and elsewhere to accumulate and retain their assets.

Well I’ve found over the years the second I think I’m smarter than another smart guy, and worst smug about it, is usually when I get my head handed to me.

And to elaborate on his point, which I did not state in my initial comment, what he is astutely pointing out is that there is potential risk ending up in no man's land. Either be very well off or spend your money (i.e. don’t save so to speak).

Because if you're in the middle, which is where the real "money" is from the Government's perspective, you will have saved only to effectively fund your own benefits as you are means tested. So you might as well spend now knowing you will get benefits in the future. Otherwise you are foregoing consumption today to pay for your own SS/Medicare benefits in the future.

If you are rich you can withstand future means testing and self fund...

 

[W2R]

Got to agree, that comment from the banker was either sarcasm which I despise..(my grandad said that sarcasm is the lowest form of ignorance) or akin to telling someone to cut off their nose to spite their face...

Very well could be true.

That said, personally I am not smart enough to know if the banker's statement was smart or not. Only time will tell, I suppose, and I don't think there is even one mortal human being who is smart enough to predict the future with much accuracy.

I do know that for ME, in my situation, it was good that I saved when I did. I am too much of a nervous Nellie to have been happy doing anything else.

 

[ivinsfan]

Very well could be true.

That said, personally I am not smart enough to know if the banker's statement was smart or not. Only time will tell, I suppose, and I don't think there is even one mortal human being who is smart enough to predict the future with much accuracy.

I do know that for ME, in my situation, it was good that I saved when I did. I am too much of a nervous Nellie to have been happy doing anything else.

Time does decide a lot of things and each person makes their own decisions. And I'm with you, with all the political upheaval going on now, no way I'd count on anybody's money but my own.

The difference between having lots of assets and paying extra taxes and spending your money on stuff and hoping someone else's money takes care of you is night and day.

 

[ivinsfan]

Well I’ve found over the years the second I think I’m smarter than another smart guy, and worst smug about it, is usually when I get my head handed to me.

And to elaborate on his point, which I did not state in my initial comment, what he is astutely pointing out is that there is potential risk ending up in no man's land. Either be very well off or spend your money (i.e. don’t save so to speak).

Because if you're in the middle, which is where the real "money" is from the Government's perspective, you will have saved only to effectively fund your own benefits as you are means tested. So you might as well spend now knowing you will get benefits in the future. Otherwise you are foregoing consumption today to pay for your own SS/Medicare benefits in the future.

If you are rich you can withstand future means testing and self fund...

It might have been the wording in your first comment, because this doesn't translate as saving money can be stupid and in fact is a pretty astute comment.

 

[W2R]

Very well could be true.

That said, personally I am not smart enough to know if the banker's statement was smart or not. Only time will tell, I suppose, and I don't think there is even one mortal human being who is smart enough to predict the future with much accuracy.

I do know that for ME, in my situation, it was good that I saved when I did. I am too much of a nervous Nellie to have been happy doing anything else.

Time does decide a lot of things and each person makes their own decisions. And I'm with you, with all the political upheaval going on now, no way I'd count on anybody's money but my own.

The difference between having lots of assets and paying extra taxes and spending your money on stuff and hoping someone else's money takes care of you is night and day.

+1

Exactly!!! GMTA

 

[LARS]

It might have been the wording in your first comment, because this doesn't translate as saving money can be stupid and in fact is a pretty astute comment.

Actually think it is basically in my original comment assuming you thought about the issues instead of knee jerk reacted to "don't save" being applicable to all.

But whatever....

 

[athena53]

Because if you're in the middle, which is where the real "money" is from the Government's perspective, you will have saved only to effectively fund your own benefits as you are means tested. So you might as well spend now knowing you will get benefits in the future. Otherwise you are foregoing consumption today to pay for your own SS/Medicare benefits in the future.

I absolutely agree with that. I'm likely to be better off than those in the middle, but if you anticipate being in a position where what's left to you after taxes won't allow you to live much better than those relying on social programs, I could see where spending while you can would be a good strategy.

 

[LARS]

I absolutely agree with that. I'm likely to be better off than those in the middle, but if you anticipate being in a position where what's left to you after taxes won't allow you to live much better than those relying on social programs, I could see where spending while you can would be a good strategy.

And there's the rub... where’s the dividing line. I haven’t a clue, but I do know that if means testing is a large portion of the answer than the Gubermint gonna have to dip pretty deep into the middle class. And I suspect there will be no real appetite for that.

So my personal supposition, which I said to my friend, was that most likely the problem gets dealt with in the tried and true way of all Governments which is to inflate away the problem. The stealth form of confiscation as opposed to outright taxation. Thus, the value of SS and Medicare payments will buy less and less, which will spread the problem across all classes.

But forecasting what populous Politicians are going to do in the future is a fool's errand...

 

[aja8888]

I absolutely agree with that. I'm likely to be better off than those in the middle, but if you anticipate being in a position where what's left to you after taxes won't allow you to live much better than those relying on social programs, I could see where spending while you can would be a good strategy.

Yeah, but those in the "middle", whatever exactly that is, better be careful they don't overspend and get reliant on social programs that somehow go away or get cut back severely (or inflated out) at some future date.

In our "blended " family, we have relatives who may soon get to this point; spending out of control, no significant savings, tapping 401K's, assuming a son or daughter will "take care" of them later on, etc. It's sad to watch this happen, but we can't help them see the future as they just live in the present.

 

[athena53]

Yeah, but those in the "middle", whatever exactly that is, better be careful they don't overspend and get reliant on social programs that somehow go away or get cut back severely (or inflated out) at some future date.

That's a big concern of mine. If the government gets too strapped for cash to pay for all these indigent oldsters (and remember that our kids and grandkids are going to bear a big part of this burden), the quality of life on the government dime will deteriorate. I can't predict how, but something will have to give.

 

[ivinsfan]

Actually think it is basically in my original comment assuming you thought about the issues instead of knee jerk reacted to "don't save" being applicable to all.

But whatever....

I thought this was a friendly discussion or am I misunderstanding this too?

 

[LARS]

I thought this was a friendly discussion or am I misunderstanding this too?

Yeah I thought it was a friendly conversation too until I was told effectively that a very smart person I know who made a worthwhile observation on the "not saving issue" was stupid and put down with "I guess not every one on Wall Street is smart".

A sentiment, I would add, that you jumped on initially...

 

[HI Bill]

...the only real challenge will be dealing with all the stuff that they have stashed in the house which they have lived in for the last almost 50 years.

Sorry for your loss. At least it was painless, and the lack of falls, hospitals, and physical therapists makes it that much less painful.

When I was cleaning out mom's house this year, I asked the refuse company what size dumpster they recommended. They said 1-2 cubic yards per year of residence. So, looks like you might need a 100-CY bin! Seriously, I rented a 20 CY roll-off, and filled it to the top! I also had two charities come and take away all of the furniture. Best wishes.

 

[Scuba]

I know- even though current taxes aren't based on assets they ARE based on income, which can be a function of assets, and I've been paying taxes on SS income since 2003 when late DH and I married. He was 65 and collecting SS, I was 50 and working FT. Next year- oh, joy- I'm in line for IRMAA surcharges on my Medicare premiums.

I comfort myself with the thought that, even though some of my money gets sucked away to subsidize people who could have saved for retirement but spent every dime they made (in addition to the ones who worked minimum-wage jobs and just couldn't save much), the people who rely on those programs have limited choices- where they live if they want subsidized housing, what LTC they use if they rely on Medicaid to pay for it.... and if they're unhappy they have few options to move elsewhere. If a tooth underlying a crown goes bad and needs extraction no social program is going to pay for an implant. Life on these programs provides the bare basics... and that's as it should be. I'm hoping that I'll have enough income left after taxes to be able to have a better quality of life.

I think this is a good attitude. Sort of like paying taxes ... one can resent having to be in a higher bracket, but my CPA always reminds me that it’s a good problem to have. Although to the extent one can have a nice cash flow with minimal taxes, that’s even better!

 

[brucethebroker]

The uncle draws a decent pension and they both get SS. They certainly aren't "broke", but if they needed to come up with a significant amount of money, they would be S.O.L.

There are many out there who have never had a negative life experience with their cash flow: some government ee's, teachers, ee's of "job for life" blue chip companies-possible loss of employment has never been a concern. They do not place a value on savings because they never NEEDED savings to bail them out. Easy credit has always been available, 401-k loans, etc., or maybe they just LBYM naturally, without any thought to the future. One financial crisis is all it takes to bring home the value of liquid savings...

In today's economy, nothing is certain except change. Heaven help your aunt and uncle should they lose the pension or one SS check....