How **NOT** to FIRE

[Moemg]

Just to give an idea of how skewed my thinking was one time. I remember one day getting a new cash advance offer in the mail. There was no fee to use it and it was zero percent interest. When I showed to DH, I said "we have money." I immediately saw it as something to spend.

.

I give you a lot of credit for telling your story and for getting out of debt .

 

[Milton]

Just to give an idea of how skewed my thinking was one time. I remember one day getting a new cash advance offer in the mail. There was no fee to use it and it was zero percent interest. When I showed to DH, I said "we have money." I immediately saw it as something to spend.

Wow. That is so messed up.

So great that you no longer fall into that trap and are now FI. Thank you for sharing your (former!) perspective so honestly.

 

[MarieIG]

I don't think there is any income it is impossible to outspend. (Remember Michael Jackson.)

 

[Milton]

The Wealthsimple article reminds me of this 2016 one in The Atlantic: "The Secret Shame of Many Middle Class Americans".

 

[USGrant1962]

I don't think there is any income it is impossible to outspend. (Remember Michael Jackson.)

And Johnny Depp.

 

[Gumby]

The Wealthsimple article reminds me of this 2016 one in The Atlantic: "The Secret Shame of Many Middle Class Americans".

I remember reading that article. At the time, I was reminded of a quote by Jerry Rice, famous former football player with the San Francisco 49ers, who said “Today I will do what others won't, so tomorrow I can accomplish what others can't.” Or, as my substantially less famous mother told me, "Life is hard. If you want to succeed, you need to be harder."

 

[Texas Proud]

Just read the article and it sounds like a mash of a bunch of people who make various bad decisions... I cannot believe that one couple can make ALL of those bad decisions over a 20 year time frame and not change...


And it would be so easy for them to fix the problems.... if it were all true that is...

 

[Sunset]

+1
How many times do you see people at work with their Starbucks coffee and buy their lunch every day and tell you they don't make enough to save.

+1
I worked with a woman who asked how could I possibly buy a condo, as she and I made the same amount of money and she couldn't save a dime..

 

[MarieIG]

The Wealthsimple article reminds me of this 2016 one in The Atlantic: "The Secret Shame of Many Middle Class Americans".

I remember hearing about the not having $400 for emergencies, but I don't recall reading that article before.

 

[Rianne]

The Secret Shame lurks in every family (extended family). I like that the author drives a 1997 Toyota with 160,000. My 1997 Toyota Camry has 173,000 miles and our 2004 Toyota Camry has 272,000 miles and we will continue to drive them until they drop.

I find ignoring the jet set, the big spenders, the fashionistas and those who say "look what I have, don't you wish you had what I have?" My DB is very good at this psychological game. Maybe this is why he and other family members are so secretive about their finances. It's all show. A con game. The subset of Bogleheads, the financial underground know the secret. Many are on this forum. I consider this forum my go to for the big questions and answers about finances.

 

[JoeWras]

So The Atlantic article compares financial problems to sexual impotence.

Funny thing. Our education systems teach extensively about sex. They teach nearly zero on finance. Especially concerning is lack of knowledge about credit cards, the "unprotected sex" of finance.

Instead, they get their education by watching a version of financial porn on TV or on-line, be it the incessant ads of cars with bows on top, or credit cards showing life as nirvana, some even yelling "more money, more money", to the "reality" TV which show situations which are not real at all.

 

[Rianne]

So The Atlantic article compares financial problems to sexual impotence.

Funny thing. Our education systems teach extensively about sex. They teach nearly zero on finance. Especially concerning is lack of knowledge about credit cards, the "unprotected sex" of finance.

Instead, they get their education by watching a version of financial porn on TV or on-line, be it the incessant ads of cars with bows on top, or credit cards showing life as nirvana, some even yelling "more money, more money", to the "reality" TV which show situations which are not real at all.

Hear Hear!

 

[GravitySucks]

So The Atlantic article compares financial problems to sexual impotence.

Funny thing. Our education systems teach extensively about sex. They teach nearly zero on finance. Especially concerning is lack of knowledge about credit cards, the "unprotected sex" of finance.

Instead, they get their education by watching a version of financial porn on TV or on-line, be it the incessant ads of cars with bows on top, or credit cards showing life as nirvana, some even yelling "more money, more money", to the "reality" TV which show situations which are not real at all.

I hear this often, but when I was in school they did a bit on how to reconcile a checking account and even had a passbook account where a banker came in to school once a month. My kids also learn basics in junior high.
Id rather not have the teachers I know pass their money habits to my kids.

 

[JoeWras]

I hear this often, but when I was in school they did a bit on how to reconcile a checking account and even had a passbook account where a banker came in to school once a month. My kids also learn basics in junior high.
Id rather not have the teachers I know pass their money habits to my kids.

Did they talk about interest (outside of math class). About debt? About how mortgages work? About how credit cards work?

That kind of thing, the unprotected sex, is not talked about. Instead, they talk about holding hands, you know, how to balance a checkbook.

 

[Ally]

I’m stressed out just reading it!

 

[Milton]

I remember hearing about the not having $400 for emergencies, but I don't recall reading that article before.

Hope you enjoy it!

Follow-up piece (with links to many similar articles): “All the Sad, Broke Literary men”. And see also ”Neal Gabler is Not a Voice of the Struggling Middle Class”.

 

[GravitySucks]

Did they talk about interest (outside of math class). About debt? About how mortgages work? About how credit cards work?

That kind of thing, the unprotected sex, is not talked about. Instead, they talk about holding hands, you know, how to balance a checkbook.

They talked about interest with the banker there the third Monday of the month collecting for our passbook accounts
, and in math we learner about compounding.
I don't think anyone had credit cards back then. I remember the high end stores had metal plates for preferred customers accounts.
An in-law is a teacher and I've been to a few parties with her teacher friends. I would not want my kids to learn financial information from them! Would the school teach how to lease a car if you can't afford to buy one? How to get a second mortgage for that Caribbean vacation?

 

[Milton]

An in-law is a teacher and I've been to a few parties with her teacher friends. I would not want my kids to learn financial information from them!

I would say the same: I know too many secondary teachers who are simply clueless.

However, FWIW I seem to recall teachers as a group being especially singled-out in The Millionaire Next Door for a typically frugal, LBYM lifestyle.

 

[GravitySucks]

I would say the same: I know too many secondary teachers who are simply clueless.

However, FWIW I seem to recall teachers as a group being especially singled-out in The Millionaire Next Door for a typically frugal, LBYM lifestyle.

Don't mean to single out teachers. Lots of people I wouldn't take money advice from, just like they wouldn't take dieting tips from me. I 'd rather see schools concentrate on the 3 Rs in general.

 

[MarieIG]

Hope you enjoy it!

Follow-up piece (with links to many similar articles): “All the Sad, Broke Literary men”. And see also ”Neal Gabler is Not a Voice of the Struggling Middle Class”.

Yes, I found it very interesting. (Read the other articles too.)

The article was well written, but he is not a stupid man. He wants what he wants (his particular career, the attention that comes with it, and to live rich on a middle class income) notwithstanding that he can't afford it. He seemed to have a sense of entitlement when it came to his daughters' education, and budget did not seem to be a factor. It seems that he drained his parents savings along the way as well. He said they wanted to help, but then also mentioned that his inheritance was gone. Now, it was more than just his inheritance, it was his parents life savings, and if it was gone, was their "help" accepted to the point of leaving them without savings?

Draining a 401(k) to pay for a wedding?

Most of the overspending seemed to be for the "benefit" of the daughters. The doctor will be able to support that lifestyle should she choose: the social worker - not so much.

 

[Milton]

Another interesting article

"Debt Destroyed My Family".

 

[JoeWras]

"Debt Destroyed My Family".

Let me give the rest of you all a context with a quote. This plan didn't work out.

The pub was to be their pension and, at the time, it seemed like a good idea.

...
As with most businesses, they didn't quite own the pub. The building had cost £700,000, and that was before the expenses of running the business. They had to part-exchange our £250,000 five-bedroom house and take out a loan of more than £400,000. I think there were other loans too, but I didn't pay too much attention

The solution to things going upside down was tragic, and not unusual.

 

[kgtest]

The numbers don't really add up, they are glossing over a LOT of spending in that article. They are grossing ~$180K. A $360K house, $405/mo car payment (say $800 for two cars), and $15K for private school are quite reasonable at that income level.

Yep, this is my family, minus the two car notes and student loan debt, but add two kids.


Very typical, most of my peers livin similar. Some on a little less.

 

[JoeWras]

The numbers don't really add up, they are glossing over a LOT of spending in that article.

It adds up when you consider this quote below. Mom and son frequently go out for $40 snack sessions. Adds up if this is their pattern.

On a Friday night, we’ll go to Whole Foods, and my son Luke will get a $15 thing of sushi and a smoothie. It’s kind of crazy that we haven’t reeled this in.

 

[USGrant1962]

It adds up when you consider this quote below. Mom and son frequently go out for $40 snack sessions. Adds up if this is their pattern.

I agree, I'm sure they are spending way too much. My point was that the examples they give of excessive spending are not excessive. Even $50 Fridays at Whole Paycheck only add up to $200/month, and they are taking home on the order of $10K/month. Another example is their $360K mortgage - that is around $2,500/mo PITI. A reasonable 25% of take home pay (not gross pay like the bankers like to use).

I think this is another example of an innumerate "journalist" not adding things up. I would have liked to see follow-up questions digging into that - and they could use the illumination of their spending habits.

nb: their gross is $170K, I previously typoed $180K