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Old 10-08-2020, 02:53 PM   #141
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Originally Posted by jkern View Post
I have always thought that Personal Finance should be taught in school.

5th Grade: Household budget, debt, income and expenses.
8th Grade: Refresh and add saving and investing (Stocks, Bonds).
11th Grade: Refresh and add Real Estate, Taxes and insurance.
Totally agree. Convinced HR to provide materials for two Dave Ramsey "Financial Peace University" 10-week, after hours courses. As the facilitator I saw that bright, intelligent, well-paid ($75-150K) individuals had no clue about personal finance, but were quick to learn. I had one couple who eliminated $70K debt during the course.
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Old 10-08-2020, 04:27 PM   #142
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MY DH's parents on the other hand were the opposite. They are now deceased but spent every penny they ever earned and DH and I had to supplement their retirement income. I did not mind that but I did mind that DH's big spender siblings never contributed.

We sent money regularly at one time to help support elderly relatives who were living near the poverty line, and their able bodied and working adult kids not only didn't help they actually took money from their parents for discretionary spending. I realized then that funneling money to spendthrift adult kids is what had gotten the parents into trouble in the first place.
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Old 10-08-2020, 05:34 PM   #143
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In the early 80's, I was sitting in a watch center late at night, looking at news magazines (which were allowed reading). There was an article about GM auto workers, basically factory line assemblers; my age, uneducated, unskilled, all with homes, multiple cars, boats, and other nice things that I couldn't afford. I felt like, "What am I doing here, and why did I work for that college degree?"

Well, it was a little bubble in time and space, which burst a few years later. Those people would all be in their 60's now, like me. Wonder how retirement is going for them?

I live in an area that has a very large auto worker population. I can tell you that those who weathered the up's & downs of unemployment early in the job career have done very, very well. Unemployment is less of a threat with seniority. They retired with pensions, full medical (that improves every 3 years with a new auto contract). Purchasing not leasing new cars every 3-4 years that cost them an embarrassing low amount. This of course doesn't include the 2nd homes and boats.
All without the cost of student loans or the lost income years while in school.
Most of them that I know well that do work today do so not out necessity but either to get away from DW or get free golf because they work for the course
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Old 10-08-2020, 08:09 PM   #144
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I live in an area that has a very large auto worker population. I can tell you that those who weathered the up's & downs of unemployment early in the job career have done very, very well. Unemployment is less of a threat with seniority. They retired with pensions, full medical (that improves every 3 years with a new auto contract). Purchasing not leasing new cars every 3-4 years that cost them an embarrassing low amount. This of course doesn't include the 2nd homes and boats.
All without the cost of student loans or the lost income years while in school.
Most of them that I know well that do work today do so not out necessity but either to get away from DW or get free golf because they work for the course
I agree with most of this and I have some 1st hand experience. These are legacy workers that hired in when the workforce was much much larger. They may be considered unskilled, but it takes a strong work ethic to do those jobs for decades. Their legacy wages are significantly higher than their younger counterparts. I do disagree with the employee discount....it's not that big of a deal
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Old 10-09-2020, 07:04 AM   #145
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I think the abolishment of pension plans would be a good first step in financial responsibility.

"we have this great pension plan pay out 70% after retirement"

But the minimum is 20 years and you got fired at 19. Ooops, sorry, no pension.
IIRC all pension plans today have 5-year cliff vesting by law.
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Old 10-09-2020, 07:13 AM   #146
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The vast majority cannot afford $200/month savings as 42% of workers earn less than $15/hr; 1 in 4 household incomes are under $35k. Using US averages for a single person as an example:

30,000 annual salary less:
5,189 Fed/MN state taxes ...
Way off. If a single person has $30k annual salary their federal income tax would be $1,918 (https://www.dinkytown.net/java/1040-tax-calculator.html)... MN income tax rate is 5.35% of taxable income ahat level which would add another $1k... so less than $3k in total.

Difference is $2,271... so there is most of the source for $200/month of savings.... your miscalculation of income taxes.

DS earns about that but LBYM and easily saves $200/month. He drives a 2016 used car that he got a great deal on and when he had car payments they were about $210/month. He shares a 2-bedroom apt with a roommate... a bit of a dump IMO but it is very affordable. Not what I would want but he makes it work.
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Old 10-09-2020, 07:59 AM   #147
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Way off. If a single person has $30k annual salary their federal income tax would be $1,918 (https://www.dinkytown.net/java/1040-tax-calculator.html)... MN income tax rate is 5.35% of taxable income ahat level which would add another $1k... so less than $3k in total.

Difference is $2,271... so there is most of the source for $200/month of savings.... your miscalculation of income taxes.

DS earns about that but LBYM and easily saves $200/month. He drives a 2016 used car that he got a great deal on and when he had car payments they were about $210/month. He shares a 2-bedroom apt with a roommate... a bit of a dump IMO but it is very affordable. Not what I would want but he makes it work.
Did dinkeytown count FICA? 7.65% x $30K = $2,295. That's always the biggest tax on low income workers.

I agree with your point about LBYM though. DS has hasn't paid more than about $700/month for shared housing, drives a 2008 Highlander with over 120K miles, etc.
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Old 10-09-2020, 09:18 AM   #148
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Did dinkeytown count FICA? 7.65% x $30K = $2,295. That's always the biggest tax on low income workers.

I agree with your point about LBYM though. DS has hasn't paid more than about $700/month for shared housing, drives a 2008 Highlander with over 120K miles, etc.

What's with all these new cars!

I'm still driving my 1997 Toyota T-100 that I bought in 2000, for $11,000. Ya, I know, I splurged, but it will work out if I get another 10 years out of it. ;-)
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Old 10-09-2020, 09:25 AM   #149
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Originally Posted by ceciledian View Post
The vast majority cannot afford $200/month savings as 42% of workers earn less than $15/hr; 1 in 4 household incomes are under $35k. Using US averages for a single person as an example:



30,000 annual salary less:

5,189 Fed/MN state taxes

12,000 rent one bedroom apartment

4,200 car payment

2,000 gas/car insurance

2,640 food

960 Utilities phone, electric etc.



Leaving about $250 a month for health insurance premiums and/or out of pocket medical and dental, credit card debt, clothes, gifts, entertainment, pets, etc. That said, 3 of my siblings retired more or less near poverty and had a roof over their heads, enough food and old used cars.


Wow.... 42% of people in the US are trying to run a household on minimum wage? I had no idea it was that high. I am really curious where those numbers came from. (Promise I really do want to read about it). I remember poking around a few years back on the dept of labor and statistics govt. web site, and I though I saw it was around 4% of people in the US are trying to support themselves on minimum wage.
At any rate, this is significant. If you are correct about that 42%, then it certainly explains why you think the way that you do about saving for retirement. If I am correct, and it is closer to 4%, it explains why I think the way I do about retirement savings and the odds of a decent retirement. Please let me know... thanks...
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Old 10-09-2020, 09:29 AM   #150
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Wow.... 42% of people in the US are trying to run a household on minimum wage? I had no idea it was that high. I am really curious where those numbers came from. (Promise I really do want to read about it). I remember poking around a few years back on the dept of labor and statistics govt. web site, and I though I saw it was around 4% of people in the US are trying to support themselves on minimum wage.
At any rate, this is significant. If you are correct about that 42%, then it certainly explains why you think the way that you do about saving for retirement. If I am correct, and it is closer to 4%, it explains why I think the way I do about retirement savings and the odds of a decent retirement. Please let me know... thanks...

Not trying to get technicalities into the discussion, just pointing out there is a difference between minimum wage and $15/hr. Except for select state or locations, minimum wage is less than $15/hr for most of the US. So that can explain the discrepancy of 42% vs 4%. I will agree that even at $15/hr in a lower COL area, it would be tough to save much after covering all of normal living expenses.
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Old 10-09-2020, 09:34 AM   #151
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Wow....
A similar statistic I recall is that fewer than half of households make enough that they have to pay any income taxes. IIRC that is net of credits like the EIC, but it's still sobering.
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Old 10-09-2020, 12:57 PM   #152
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Way off. If a single person has $30k annual salary their federal income tax would be $1,918 (https://www.dinkytown.net/java/1040-tax-calculator.html)... MN income tax rate is 5.35% of taxable income ahat level which would add another $1k... so less than $3k in total.

Difference is $2,271... so there is most of the source for $200/month of savings.... your miscalculation of income taxes.

DS earns about that but LBYM and easily saves $200/month. He drives a 2016 used car that he got a great deal on and when he had car payments they were about $210/month. He shares a 2-bedroom apt with a roommate... a bit of a dump IMO but it is very affordable. Not what I would want but he makes it work.


So I was curious.... did some poking around about that 42% earning minimum wage. Yeah... that is a bit mis-leading. That is for ALL workers. Including part time workers, and teenagers that still live at home. The number of households total income trying to make it on minimum way is MUCH lower than 42%...

https://howmuch.net/articles/how-muc...-make-in-wages
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Old 10-09-2020, 03:41 PM   #153
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I've been retired for 16 years, and over that period have never had taxable income over $20k per year. By your standards I retired into poverty. On the other hand, I travel internationally regularly, own 2 vehicles and 3 boats, and drink craft beer. I sure don't feel like I'm living in poverty!
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Old 10-09-2020, 04:08 PM   #154
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Bingo! The current "crisis" is always the problem. Not saving for the previous 20-40 years has nothing to do with it.
This ^^^^^
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Old 10-09-2020, 04:41 PM   #155
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Well, life is not fair. Nothing we can do about that.

Regarding "not saving enough" I am not judgemental on that. There are people on subsistence incomes, people who must support other family members (like parents) on their incomes, people with high medical expenses, ... Lots of reasons for that recent observation that 40% of Americans adults couldn't come up with $400 in an emergency. Then there are those who legitimately wasted their money, including sports stars, where I guess we could look down on them. But why? So we can feel superior? Man plans, and God laughs. Most of what DW and I have is probably more due to good luck than to wisdom, starting with being born to middle-class white families.
It doesnt take a lot of money each month to get a million dollars saved up for retirement if you start early. Even if you dont have a million, but half that, you will do pretty well in retirement with social security and your savings. I believe every person (sure there are a few exceptions) in America has the chance to set them selves up for their retirement and to overall be successful. That does not mean retire early, or retire rich etc, but with some thought and care, everyone can get there. Along the way, some have illnesses and tragedies that knock you off track etc but they are rare. I think it is an education issue. Like many problems, there is more of a focus on it right now and the younger generation appears to be wising up and saving early and often. The ones I meet in my workplace are anyway.

Some have a different view on things, and that is fine as well, but it is there choice. Maybe they will come out better in the long run, who knows. The problem comes when people make poor decisions most of their lives and it leaves them in a bad spot.
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Old 10-09-2020, 05:01 PM   #156
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... I believe every person (sure there are a few exceptions) in America has the chance to set them selves up for their retirement and to overall be successful. That does not mean retire early, or retire rich etc, but with some thought and care, everyone can get there. Along the way, some have illnesses and tragedies that knock you off track etc but they are rare. ...
I guess that we'll just have to disagree on that. I think many people on this board have led fairly privileged lives and have not been exposed to the full range of Americans. Hence all the sentiment that failure in retirement is a personality fault. I believe that most of us are where we are primarily because of good luck, not exceptional skill, starting (as I said) with what Warren Buffett calls the "ovarian lottery." (https://www.cnbc.com/2018/05/04/warr...s-is-luck.html)
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Old 10-09-2020, 06:16 PM   #157
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I guess that we'll just have to disagree on that. I think many people on this board have led fairly privileged lives and have not been exposed to the full range of Americans. Hence all the sentiment that failure in retirement is a personality fault. I believe that most of us are where we are primarily because of good luck, not exceptional skill, starting (as I said) with what Warren Buffett calls the "ovarian lottery." (https://www.cnbc.com/2018/05/04/warr...s-is-luck.html)
Disagree. I came to US at age of 36, penniless, with bad English, no profession (suitable for US). For 3 years worked odd jobs on almost min wage and studied - worked at night- studied at day and vice versa. Borrow money to pay for education, even to buy computer.
Where do you see privileges?. So, If I was able to made myself in US, why person who born here, with native English, having US education cannot?
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Old 10-09-2020, 08:02 PM   #158
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Disagree. I came to US at age of 36, penniless, with bad English, no profession (suitable for US). For 3 years worked odd jobs on almost min wage and studied - worked at night- studied at day and vice versa. Borrow money to pay for education, even to buy computer.
Where do you see privileges?. So, If I was able to made myself in US, why person who born here, with native English, having US education cannot?
Nice work!

Several of us here made it without any privileged upbringing or family to guide or help.
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Old 10-09-2020, 08:09 PM   #159
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Nice work!

Several of us here made it without any privileged upbringing or family to guide or help.



Yep, and I'm one of them. I never realized how poor we were till I got out on my own.
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Old 10-09-2020, 08:22 PM   #160
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[/B]

Yep, and I'm one of them. I never realized how poor we were till I got out on my own.
Same here.
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