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Old 04-18-2021, 01:53 PM   #61
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Three rules that will always be valid:
1. LBYM
2. Pay Yourself First
3. Learn compounding
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Then there is #4. Understand the difference between Need and Want.
Take care of the real "needs" then take the "wants" and save/invest it. Understand the pitfalls of instant gratification.
It really is that simple. There was a thread, a while back, about offering unsolicited financial advice. I mentioned my futile attempts, before I gave up and stopped entirely, to get my staff to consider very modest payroll deduction savings. Staff that earned a LOT less than I did buying lunch every day vs brown-bagging, then taking payday loans, etc. Conversely, my neighbor was a modest-income blue collar worker who ER'd, because he followed LBYM.
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Old 04-18-2021, 02:08 PM   #62
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I came to US at age 36 in 1995. Penniless, no English, no suitable profession or education for US.
For 3 years I worked odd jobs ($7-8.50) per hour. Lived by the way in San Francisco - not the cheaper city even then. Yes, I couldn't afford anything - no dining out, vacations, decent shoes (payless who remember). Food on sale only. Had to borrow money to study, even to buy computer. Worked at night - study at day. Worked at day - study at night. 3 f### years (actually 3 years and 3 months) until I finally land a job in very large and famous software company.
And I'm not the genius (my wife said opposite :-( ). So, if I was able to make it, everybody should be able to.
There you go, and I commend for your achievements, Sir. It's there for anyone who wants to get there. No one says, it is easy and luck has something to do with being successful. I also am a believer that we make our own luck with choices and the way we set ourselves up for success. We can call it what we want but luck/opportunity is what happens with where we want to go.

There are millions of stories similar to yours and a lot of folks here including me life wasn't an easy street starting out. I beleive we willed ourselves to where we are at today.
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Old 04-18-2021, 02:18 PM   #63
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Food on sale only.
My food bill still averages under $50 week and I eat well
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Old 04-18-2021, 02:46 PM   #64
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I tend to read a sense of moral superiority in these threads.
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Old 04-18-2021, 03:09 PM   #65
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Ditto. Now we are doing the same for each of our young grandchildren. Plus they will get amounts off the top from our respective estates for edu.

Who knows what the costs of education will be in 15-20 years. This is a gift for both our children who will hopefully not have this burden, and of course for our grandchildren should they wish to take advantage of it.

Both our children had no student debt. We want the same for our grandchildren.

We do not believe that we can judge the future based on our past experiences.

I'm looking at the cost of my son's University of South Florida costs and it doesn't seem that outrageous. Less that $6k a year. For $24k* he has a has a chemistry degree. My daughter worked a few years after graduation then decided she wanted to be a dentist. That's a different story, tuition only is $60k+ each year. They both have no debt.



* that's not the way it really went, but it could for someone else.
He started as a Gator, did good first year, had some issues second year and dropped out, took a year off and decided it was something he wanted to do. Went back to a community college got his 2 years done, then transferred to the 4 year and got his degree.
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Old 04-18-2021, 03:10 PM   #66
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I tend to read a sense of moral superiority in these threads.
Interesting! Can you explain, moral superiority and the feeling that you sense?

Just curious and interesting observation.
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Old 04-18-2021, 03:14 PM   #67
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I have to agree with Gumby on this one, that "it can still be done" although to be sure the opportunities and the challenges are different. As noted the union jobs with four years to top of pay scale are long gone. (I'd never heard of them when I was 18.) And I'll grant that the opportunities for someone born black, female, and in Bangladesh are different for someone born white, male, and in the affluent suburbs of D.C. as I was. I'll be quick to note though, that we were not affluent, at least not by D.C. standards. My father was an electrician employed by the local electric utility, and when the youngest of three children was in Middle School my mother worked as a secretary. But it did give me access to what was regarded as one of the better public school systems in the country and heavily subsidized community college. And in spite of my early laziness I managed to leverage that into a good career with a pension (which is no longer offered but they do offer a 457 plan with subsidy).

But I maintain that the opportunities are still there. Only Gumby has mentioned military service as a path to upward mobility. I got an education in that when we moved to West Virginia. In the D.C. area while military service is not actually frowned upon for high school graduates, it was not encouraged, at least not in 1968 when I graduated. In case some don't remember there was that issue in Vietnam going on at the time. But here in WV, military service is much more highly regarded as a path to "bootstrap" oneself out of the poverty that is so widespread. And I'd submit that path still exists. It worked for two of my nieces and their husbands.

Also local is a community college that besides offering the normal fare of a CC, they also offer certification programs in robotics maintenance, accounting, computer certifications, and others. All of these can lead to jobs that pay enough to bootstrap oneself into being self-supporting and being able to afford continuing education. One unique curriculum they offer is for utility linemen. While they don't quite guarantee that FirstEnergy (local utility) will hire you out of school, the company does actively seek those graduates. And in case you're not aware, just about every electrical utility in the country is screaming for those folks. That is not a 9 to 5 job but it sure does pay enough to support yourself and then some.

So - the job market is different. Well, it was different for my parents than it was for me too. And so it is different now. But it is far from hopeless.
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Old 04-18-2021, 03:14 PM   #68
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I'm looking at the cost of my son's University of South Florida costs and it doesn't seem that outrageous. Less that $6k a year. For $24k* he has a has a chemistry degree. My daughter worked a few years after graduation then decided she wanted to be a dentist. That's a different story, tuition only is $60k+ each year. They both have no debt.



* that's not the way it really went, but it could for someone else.
He started as a Gator, did good first year, had some issues second year and dropped out, took a year off and decided it was something he wanted to do. Went back to a community college got his 2 years done, then transferred to the 4 year and got his degree.
You forgot housing (unless he lives at home). 20k total per year for GS. Graduated May 2020. Still owes ~7500. That's around seven thousand five hundred. Had to work his butt off but worked hard
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Old 04-18-2021, 03:46 PM   #69
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You forgot housing (unless he lives at home). 20k total per year for GS. Graduated May 2020. Still owes ~7500. That's around seven thousand five hundred. Had to work his butt off but worked hard

Ya, I didn't forget, I had it in there, and took it out. His one bedroom ran $1000 a month. He also worked P.T. while going to school.
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Old 04-18-2021, 03:50 PM   #70
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Interesting! Can you explain, moral superiority and the feeling that you sense?

Just curious and interesting observation.
Sure, these threads appear every two-three weeks. The tone is generally self-congratulatory.

Bring on the Four Yorkshiremen!


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Old 04-18-2021, 04:51 PM   #71
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Thanks. I see your view and opinion.
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Old 04-18-2021, 05:43 PM   #72
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The birth lottery was out of my control but I agree I did very well - born American, male, cis, to a professional and a SAHM who both had college degrees and stayed married and provided well for their three kids.

The luck factor, for those things that are truly luck, I also consider out of my control. I've done well on balance here. I was not conscripted into any wars. I have not been hit with any severe health issues. I had a private stock pay off pretty well one time. On the other side of the coin, I went through a divorce - not by my choice, which is why I list it in the "luck" category - and had two children die in utero, and have struggled with MDD most of my adult life.

What's left is decisions I made. I've made a few bad ones, but most of them have been good ones. I got two degrees that were in demand (engineering and business), did good work for good companies, and made smart saving and investing decisions.

I think having good guidance is really important. I've seen the impact good guidance has had on my decisions - mostly by my parents but also by my sisters and some mentors I've had. I've also tried to give good guidance to my three young adult offspring. Occasionally I meet young people who haven't had what I consider to be good guidance or haven't been provided for, and even if they're capable and intelligent and hardworking and so forth, they'll have a harder time than my kids just because they'll unwittingly make suboptimal decisions.

I think for my three kids there are pluses and minuses:

+ Not as much risk of war. My Dad served during Vietnam, I might have been chosen for Afghanistan/Iraq, but my kids are probably less at risk.

+ Hopefully less risk of divorce. Although one can never say, I hope I can guide them to avoid the mistakes their mother and I made that ended up in us getting a divorce.

+ Investing is easier, cheaper and better. I had to mail checks and do stuff by paper and phone with UTMAs and traditional IRAs at a cost of 0.18%. They have access to Roth IRAs and 529s and online transfers with 0.04% costs and anytime web access.

+ Resources are better. I had the advantage of parents who were well off. My kids have the advantage of parents and a grandparent who are well off.

+/- Cost of college is a push. My Dad paid for my bachelor's degree and gave me my leftover college fund and did the same for my two sisters. I'm doing the same for my three kids.

- Housing seems less affordable all things considered. Our first house mortgage was about 2x my then annual salary, and there were no bidding wars. Currently my oldest is looking at a home mortgage that is about 5x his annual salary and he'll probably have to deal with bidding wars. Our first interest rate was 7.5%, and his first interest rate will be 3%ish. He will have the advantage also of a first time homebuyer account which gives him about a 7% discount on his down payment funds each year.

Overall I think they'll be able to succeed as well as I did because overall they're starting off in the same generally advantaged spot as I did and have the same general skills and abilities I did, and the environmental factors are as good or perhaps a bit better than I had. But they might have hard luck, and they also might make bad decisions along the way.
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Old 04-18-2021, 05:49 PM   #73
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College expenses are worse these days. Even state schools are expensive. Young people can try different things to avoid big student loans (such as commuting to a state school close to home and living with parents, if possible).

Also, there is the threat of climate change, which could make some choices of occupation and some places to live obsolete. And the threat of more pandemics. I truly believe a Pandora's box has been opened on that front.

Other than that (how was the play, Mrs. Lincoln?), the challenges are not wildly different. One needs to take a hard look at the local job economy, and decide whether moving elsewhere will get you farther (a difficult choice I had to make 40+ years ago).

Housing has never been cheap in my lifetime. Prices were being driven up weekly in the mid-1980's, and a 13% mortgage was considered normal. But mortgages nowadays are cheap.

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I get around---the internet. I read many young people saying it is different now. College expenses are to high, houses cost to much, the economy is different, wages are stagnant. Basically I find lots of excuses why the younger generation can't get ahead. It makes me wonder how much of it is true.
My experience, we were middleclass, as I have said here too many times, our average inflation adjusted income was $71k over 37 years. (inflation adjusted means, the $18k we earned in 1981 was adjusted to just above $50k to cipher into the average.) That is slightly above the median US income. But we weren't high income earners. This makes me think yes, If we can do it. The above numbers were in 2018 when we closed the business, so $71k is closer to $78k.
I understand we are a small percentage and most people don't save like many ER readers did. But, if a young couple earns near $80k can they do what we did over 30+ years, or, are things really different?
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Old 04-18-2021, 06:07 PM   #74
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It is very difficult to compare different eras because people are people, and how each reacts to a certain set of circumstances are different. I have learned to put myself in other people's shoes to try to get a full understanding without generalizations. For some today, it is easier. For some today, it is harder. Every generation thinks the following generation(s) has a lot of things easier, and every generation thinks the preceding generation(s) messed a lot of things up.

Part of the consideration is who is around you? Who is there to encourage and challenge you to know and develop your skills, to do your best with those skills, to make you aware of and expose you to opportunities, to help move you towards them, and when you fail along the way, help you figure out why you failed and how you can learn from it? And... if you were exposed to these type of people, did you choose to listen? Those 2 circumstances can be a bigger factor than what generation or country or ethnicity you were born into.
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Old 04-18-2021, 06:58 PM   #75
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Food, Clothing and Shelter - these are the three things that a human really needs. Most Every thing else is a want.

We chase accumulating more electronic bits($) because we are monkey at our core. I want to have this because I see other monkey chasing it.

In my mind, someone working a low-stress, low paying job who doesn't compare himself to others is way ahead of us other monkeys chasing electronic bits.

People in Bhutan are/were happy people. They don't even have $ or 2 saved. But once they saw other countries on TV, they wanted to chase the same thing as well. And misery will spread there as well.

Simpler life is happier life. We are only making it complicated, day by day!
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Old 04-18-2021, 08:55 PM   #76
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People can still succeed these days, but it is harder. We can point out that the kids are drinking expensive coffee and are paying too much for their phones, but the inflationary costs for the big ticket expenses of college education and housing and health insurance are a reality. When I went to the state university for my undergrad (ok, 4 decades ago), tuition and fees were a hair under $1K. It is now approaching $16K. I realize the then-year dollar versus current-year, but realistically, the starting salary of $25K 40 years ago isn't $400K today). Paying for health insurance was never a real concern in the 70's, 80's & 90's as it was either a 'free' benefit included in your compensation or it cost next to nothing and certainly nowhere near what it costs today. Pension availability was definitely higher back then as well. Sure, there are things that cost less today, but the big ticket expenses are what makes it more difficult for the kids today. Add to that the national debt, shaky social security funding, environmental issues, annual budget deficits... It may become even more difficult for them.
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Old 04-19-2021, 12:00 AM   #77
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It doesn't have to be an either or choice. Studies show many people underestimate the degree luck played in their success. My home life wasn't the best growing up but my parents did encourage me to go to college and helped with some of the expenses. I see a lot of stories on Reddit of kids getting kicked out at 18 with no money, job or car wondering what they should do. Many foster kids end up on the streets homeless when they turn 18. Many people were born disabled, maybe they were a crack baby, and there's all sorts of other situations where college or joining the military may not be options for people due to physical or mental health issues.

On the flip side, there are many expenses that are considered normal these days that can really eat away at people savings. Like these 6 figure debts for college seem to be a scam for many. In our state community college and a state school can have minimal costs. Community college is cheap and tuition at San Jose State is around 8K a year, with software engineering grads starting salary can be $80K+. But there seem to be no shortage of students going into 6 figure debt at private or out of state schools for gender study degrees or other low demand fields.

Clothes are cheap but instead of most people saving money on this expense they just buy more and more clothes. There is so much used clothing in the U.S. that used clothes often sell for only $1.50 a pound. Car and houses have gotten bigger since the 1950s for no apparent reason. Bigger houses usually mean higher taxes, more to furnish, higher energy use, more expensive updates, etc.

We have discussed this before but many here and on other ER forums have INTJ / engineering brains / possibly mild Asperger syndrome with traits that make it easier to plan ahead, work with numbers and spreadsheets, plus not really care what other people think, which can be a real money saver on not buying luxury goods just to impress others.
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Old 04-19-2021, 03:02 AM   #78
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Well, now I feel really small!

My salary in 1979 was $7500.00. I negotiated a raise to $8000.00 and was very proud of myself.

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realistically, the starting salary of $25K 40 years ago isn't $400K today). .
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Old 04-19-2021, 03:28 AM   #79
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The issue isn't whether you can do it, it is whether you want to do it.

An family acquaintance almost 6 years ago, and I've mentioned her before, was a single mom working 2 hospitality jobs. I got her an interview with a friend who owned a franchise for over 40 years, she aced the interview and subsequent aptitude tests. She turned down the offer of $15/hour, medical, 401k and versatile but guaranteed 40+ hours. For her to "get ahead", she said she needed at least $18/hour, because she would lose her "tax-free" tip income, free medical care for herself and child, food assistance, and infant food assistance. She would have to pay more for day care, as her income was higher. She was not, and could not marry the bum father of her child.

Fast forward almost 5 years, she now has a child by a different father, and neither one works at all in the restaurant where they met, because of the pandemonium. Eateries are begging for workers, but now it is more lucrative just to stay home. She didn't have to be a 38yo college educated genius to figure how to beat the system, and the system will most likely take care of her until she dies. "Wot she worry?"
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Old 04-19-2021, 04:11 AM   #80
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Then, as now it might be a matter of degrees.

Some people think that they can't RE unless they can maintain their big house, expensive vacations and cars. Others find that a more modest lifestyle makes RE possible.

Its different now but the same...the gig economy, internet work, better access to Wall St, less societal pressure to conform to a consumer mindset etc allow more options to save, invest and grow an income outside of 9 to 5.
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