The Atlantic Article on Lack of Savings

[Gumby]

It seems to me that people would be happier if they took pride in their abilities and accomplishments rather than their possessions. And by accomplishments, I mean almost anything that you can do or have done. If you can play the guitar or sculpt, you have my respect and admiration, as I can do neither. Did you raise your kids to be decent human beings and good citizens? Also something I admire. And there are many, many other skills that people have learned or perfected which no one can take away. Be proud of those things, not the shiny car in the driveway.

 

[Fedup]

You got one of those, too huh? My daughter is all into the "art thing". Her free time is consumed by drawings, paintings, and sculpture for personal consumption. I saw it coming years away and tried to steer her away from her poverty leanings...A fruitless endeavor...It is what it is, as they say.

I have one in the art field but she started her own company and is employing 3 people. Has an office near Silicon Beach. However she is not rich, but has been supporting herself. She turned down my offer to pay for a top notch MBA if she wants to go back to school, but she said maybe she'll think about the offer in a few years, but not now.


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[Mulligan]

I have one in the art field but she started her own company and is employing 3 people. Has an office near Silicon Beach. However she is not rich, but has been supporting herself. She turned down my offer to pay for a top notch MBA if she wants to go back to school, but she said maybe she'll think about the offer in a few years, but not now.


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Art with an entrepreneurial spirit isnt a bad combo. I can see why she would want to give that a go and see where it leads...My daughter just likes to draw pictures... ... Oh well she will get tired of being poor, or she wont.

 

[rayinpenn]

His two daughters are well-prepared to become great contributors to the society and hopefully to his retirement if they were raised in an Asian family.

I have one word for you: balance.
1) Did his daughter need a Harvard education to be happy? Or successful?
2) had he sent the girls to big name state u and banked the 50% he'd save - wouldn't all 'on balance' be in a better position?
3) the girls didn't just appear over night.. He had 18 years (plus a few months) to get his savings act together.

I am not comfortable with the thought of being dependent on my children's charity... Are you?

The choices are simple -
The $4 cup of joe or the $.25 cup out of your kitchen.... I see bad choices made every day.
I wish I had figured it out sooner - you save first (of course with balance).


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[rayinpenn]

I do not mean to be harsh but being financially irresponsible with a load of excuses makes my blood boil.

 

[Danmar]

Very interesting thread with some very thoughtful posts. I feel a little conflicted when I read the original article and the Bloomberg response. Clearly things are not going well for the middle class. Certainly there are ways to manage this but most people don't. The classic "American Dream" is a lifestyle that is increasingly out of reach for many. Income inequality is getting worse and the ideal of upward financial mobility is not present as much as we would like. This is not a good thing and will need to be addressed. [mod edit]

It's better not to be smug or self righteous (seems to be a fair bit of this on this site) but it's hard not to be if you have successfully saved for a well funded retirement as many here have done or are doing and read these stories.

So in the end I am just thankful how lucky, smart, goal oriented, focused, I am and call it a day. Sorry everyone can't be these things but if they were it would be a different and tougher world for us lucky smart guys. I try to help friends and family that are less fortunate but there is only so much you can do.

 

[Milton]

[T]here is still the occasional article about some [person] who lives simply and leaves a multi-million bequest to a charity. Stupid people don't do that.

Debatable!

This is what struck me the most from the article. "In a 2010 report titled 'Middle Class in America', the U.S. Commerce Department defined that class less by its position on the economic scale than by its aspirations".

What kind of fantasy logic is that? People (and organizations and nations) aspire to lots of things, but it doesn't make it so.

 

[papadad111]

Call me a self-righteous prick or whatever, but I have no sympathy for self-inflicted problems. Yes it takes some financial ducation and the ability to have a career that can support your given lifestyle. However, making the poor choices is not my problem.

The sad part is all these self-inflicted problem people will vote and select the person that gives them the most gov't handout. That leads to my wallet being tapped by gov't because I am responsible and make good choices.

+1.


And. The problem will come home to roost. About the time the first generation of pensionless people hit retirement age a decade or so from now. We will all pay for it one way or the other.

 

[papadad111]

I have a similar story. My son has been saving ever since he graduated from college. He could have saved 10 times more if he pursued a career using his degree. Instead, he decided to live happy and poor by being an artist, something we reluctantly accepted. Sometimes, poverty is a choice ...

Indeed. Did he choose that knowing it is his passion and temporary --in that his parents will provide a nice backstop by way of fat inheritance some day to shore up the savings ... ?

I've seen that happen - choices are made my looking at the total environment.

 

[Milton]

This is actually the thing that made me cringe the most. It's one thing to endanger your own finances but his parents', too? And he's not in a position to to help his parents in case they encounter sudden financial difficulties (e.g. long-term care).

I don't think he's worried about that. His only concern seems to be that his parents are now unable to provide him with a financial legacy:

In the end, my parents wound up covering most of the cost of the girls’ educations…. Although I don’t have any regrets about that choice … paying that tariff meant there would be no inheritance when my parents passed on. It meant that we had depleted not only our own small savings, but my parents’ as well.

 

[Milton]

An interesting follow-up article in Slate

"All the Sad, Broke, Literary men". Excerpt below.

Gabler’s essay is the latest example of the long-standing genre that I like to call all the sad, broke, literary men. It almost always presents a personal anecdote as an emblem of broader woes, holding up the author as a symbol of our seemingly forever-contracting middle-income economy. But all too often, it is simply a disguised narrative of privilege….

Rather than cleaning up their financial messes, these men seem to wallow in them. Gabler claims financial ignorance and illiteracy, but it’s more than that. He’s all too aware of the money going out, and even works with a financial counselor. Like most examples of the form, his essay is a mix of bravado, self-abnegation, and regret, with a heavy dose of economic analysis tossed in. “What so many of us have been suffering for so many years may just seem like a rough patch,” he writes. “But it is far more likely to be our lives.”

True! But for our sad, broke, literary men, it doesn’t have to be that way. This is, for the most part, an extremely privileged crowd. The writers, almost despite themselves, still can’t quite stop boasting—about their status, about their buys. Private schools and high-end suburban school districts almost always feature. So do homes in exclusive neighborhoods. Almost no one is writing these tales from Dubuque, Iowa.

 

[scrabbler1]

I do not mean to be harsh but being financially irresponsible with a load of excuses makes my blood boil.

+1. Short and sweet.

 

[marko]

Art with an entrepreneurial spirit isnt a bad combo. I can see why she would want to give that a go and see where it leads..

Yeah, in addition to an entrepreneurial spirit, Art is a great guy all around and quite rich. If I had a daughter I'd encourage her forget about that other guy she's going out with and try to hook up with Art.



Sorry...waiting for my noon martini.

 

[rodi]

So what would you all do going forward if you were the article author to get back on track financially?

Same thing my bff did when she got into debt in her early 20's (from taking cash advances on her CCs to pay her parents rent because they were an even bigger financial mess.)
- Get a second job.
- Cut all expenses that can be cut

In this case the wife doesn't work. If she goes back to work - even at Minimum wage she'll be bringing in at least 10k net to pay down the debt.
The author can hustle up side gigs and 2nd jobs.

They can move to a lower cost of living place, downsize to a smaller place (presumably the house is big enough to have raised their kids - they don't need as much space now that their kids are launched.).

There ARE choices the author can make now. They're not easy/fun/enjoyable choices... but they are there.

 

[marko]

There ARE choices the author can make now. They're not easy/fun/enjoyable choices... but they are there.

I'm betting he doesn't take any of those choices except maybe to write another article in a few months and try to sell it.

He's an "auteur" after all; don't see him in an orange apron at Home Depot any time soon.

 

[oldphd]

Couple of earlier posts in this thread raised the question of what happens to people who have chosen this path.

I have a way of thinking about that, which I will try to put into words. People have a capacity of earning in their life, as well as the consumption. Think of a graph over time and the area under the curve. If you consume more during some times, you need to reduce at others. If your capacity increases/decreases, that impacts that total area you can consume.

For some folks, they've consumed their life time capacity while they still have time left meaning they need to consume zero from there on out, and the result isn't going to be pretty.

 

[FreeBear]

Debatable!

What kind of fantasy logic is that? People (and organizations and nations) aspire to lots of things, but it doesn't make it so.

+1

Yep, this defines all of our middle class friends that are in serious financial trouble...

Lots of "I deserve" and "I want", but unwilling to pay the price up front until the desires are affordable without massive debt.

 

[HFWR]

Didn't read the whole thread, so apologies if this has been discussed.

Our entire economic system relies on spending to the max, debt with minimum monthly payments, buying crap like pet rocks, social pressure to drive the Jag, or to spend $50k on daughters wedding.

Now get out there and SPEND!

 

[GrayHare]

Now get out there and SPEND!

"You've heard of negative interest rates? If I'm elected president, I'll set up a negative sales tax! That's right, on everything you purchase the government will tax you -10%, which means you'll get 10% cash back from Uncle Sam. The more you spend the more you get! Is this a great country or what!"

 

[ExFlyBoy5]

Very interesting thread with some very thoughtful posts. I feel a little conflicted when I read the original article and the Bloomberg response. Clearly things are not going well for the middle class. Certainly there are ways to manage this but most people don't. The classic "American Dream" is a lifestyle that is increasingly out of reach for many. Income inequality is getting worse and the ideal of upward financial mobility is not present as much as we would like. This is not a good thing and will need to be addressed. [mod edit]

It's better not to be smug or self righteous (seems to be a fair bit of this on this site) but it's hard not to be if you have successfully saved for a well funded retirement as many here have done or are doing and read these stories.

So in the end I am just thankful how lucky, smart, goal oriented, focused, I am and call it a day. Sorry everyone can't be these things but if they were it would be a different and tougher world for us lucky smart guys. I try to help friends and family that are less fortunate but there is only so much you can do.

I appreciate your thoughts but couldn't disagree more. The author put himself in the situation. This wasn't "bad luck" or "income inequality"...it was being an idiot. As an author, I assume he writes from home...so why continue to live in the HAMPTONS?!? Sell your house and move to Kentucky. Second, I would love to know how many Apple products adorn his home. I would like to know what he sets his thermostat in the winter. I would like to know which package he has selected from the cable provider. He felt the need to send his kids to two of the MOST EXPENSIVE schools in the country and spent his PARENT'S $$$ doing it?!? Wow...what a piece of work. Luck has NOTHING to do with this man's decision. I wound up dropping out of HS (long, drawn out story) and joined the military as an enlisted man. And yet, somehow, I retired much earlier than most folks. Was it luck? Hell no...it was a LOT of damn hard work and to say "luck" had anything to do with it is offensive to me.

The American Dream is nothing more than a marketing scheme put out there to encourage Americans to SPEND, SPEND, SPEND!!! If Americans stopped spending EVERY DAMN DIME they make on everything under the sun, then perhaps they would have $400 for "an emergency."

Oh yeah...a few tidbits about the author (from public records):

2012 Judgment for AMEX Balance: $36,442
2012 Judgment for CITI NA Balance: $14,066
2012 Lien NY Taxes Balance: $2,812
2010 Lien US IRS Balance: $15,431
2010 Lien US IRS Balance: $60,968
2010 Lien NY Taxes Balance: $10,170
2008 Lien NY Taxes Balance: $12,790
2006 Judgment Penguin Group Balance: $189,919
2005 Lien US IRS Balance: $51,110

OK...I am tired of transcribing this information, but it keeps going and it goes back to 1993. Does anyone else here see a trend?!? This is NOT a case of "keeping up with the Joneses", this is nothing more than FINANCIAL IDIOCY. And all the while, carrying a $650,000 mortgage. Oh...one last thing. The property in East Hampton with the $650K mortgage is showing a Zillow value of $2.65 MILLION DOLLARS. What am I missing here?!

 

[RobbieB]

I have heard the call and am doing my best!

Seriously. I'm spending more now than I did when I was working. I'm also making more dough now than when I was working. You know because I'm not maxing out the 401K anymore and I paid off the house plus the wonder of qualified dividends and social security income.

Not working means more time to have fun and "blow dough". Really. I scrimped and saved and invested to build up this nice stash and now it's time to "help the American economy" by adding cash -

 

[Milton]

I do not mean to be harsh but being financially irresponsible with a load of excuses makes my blood boil.

All I really needed to read in the article was the following: "After the job loss, the co‑op board’s rejections, the tax penalties, there was one more wallop: A publisher with whom I had signed a book contract, and from whom I had received an advance, sued me to have the advance returned after I missed a deadline. (Book deadlines are commonly missed and routinely extended.)"

Two thoughts:

1. While I don't know the specifics of that contractual situation, I do know a bit about publishing. I would be willing to bet that - despite the author's attempt to minimize the problem - that deadline was waaaaaaay overdue. Like other business people, publishers have better things to do than waste time, energy and money on lawsuits, and typically do so only as a last resort.

2. Nice approach to model for his daughters: I'm 'special' so my responsibilities and commitments don't matter ... and when I inevitably fail to meet my obligations, it's the other guy's problem and he's a jerk if he tries to enforce the letter of the law.

 

[rayinpenn]

a few tidbits about the author (from public records):
[/COLOR][/U][/B]
2012 Judgment for AMEX Balance: $36,442
2012 Judgment for CITI NA Balance: $14,066
2012 Lien NY Taxes Balance: $2,812
2010 Lien US IRS Balance: $15,431
2010 Lien US IRS Balance: $60,968
2010 Lien NY Taxes Balance: $10,170
2008 Lien NY Taxes Balance: $12,790
2006 Judgment Penguin Group Balance: $189,919
2005 Lien US IRS Balance: $51,110

Thanks Flyboy I had no idea...
I have been blessed I've always been able to pay my bills; not saving for retirement is one thing but getting into Credit Card Hoc and dancing with IRS... This author is clearly a spend thrift and a blow hard ...

when you don't pay Your taxes you steal from all of us.


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[Danmar]

@Flyboy. I don't think we really disagree to the extent you think. I have little sympathy with the author. My point is really, I don't care very much. There will always be winners and losers in life. My goal in life is always to be one of the winners. Problem is our society seems to be encouraging a loser's stategy. I guess the more losers there are the easier if is to be a winner? The only problem I see is that the losers might overrun the the rest of us.

 

[daylatedollarshort]

OK...I am tired of transcribing this information, but it keeps going and it goes back to 1993. Does anyone else here see a trend?!? This is NOT a case of "keeping up with the Joneses", this is nothing more than FINANCIAL IDIOCY. And all the while, carrying a $650,000 mortgage. Oh...one last thing. The property in East Hampton with the $650K mortgage is showing a Zillow value of $2.65 MILLION DOLLARS. What am I missing here?!

He has $2M equity in his house? Could there be others loans on the house than the mortgage you are seeing?