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What will these (50% under 34) people do for unexpected expenses or retirement ??

I was reading this on ClarkHoward.com Home: Save More, Spend Less and Avoid Rip-Offs on clarkhoward.com (he is a consumer advocate).

This link may expire tomorrow, but you can still find the info. on his website.
--> clarkhoward.com - Save more, spend less and avoid rip-offs

Here is some of the text:


Half of all people age 34 or younger have zero in savings
The National Foundation for Credit Counseling reports that half of all people up to age 34 have absolutely zero savings. They can not lay their hands on a single penny they've stashed away!

There are a million reasons not to save. In some cases, unique circumstances actually make it so that you truly can't save. But that's unusual. Most young people just miss out on learning important lessons about saving because their parents haven't set the best example.

Perhaps it's also harder for those under 40 to save money today because this is the first generation that has had to adapt to money being plastic.

Some 15 years ago, when you wanted to buy something, you looked in your wallet or purse. Either you had the cash and made the purchase or you didn't and you walked out of the store. Your spending was controlled by your absolute supply of money.

But today, so many young people have never had to live based on a finite supply of money. It seems as if there's always the unlimited possibilities credit lines and in-store financing.


This info. is kind of scary ... :eek:

SOS
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What will these (50% under 34) people do for unexpected expenses or retirement ??

I was reading this on ClarkHoward.com Home: Save More, Spend Less and Avoid Rip-Offs on clarkhoward.com (he is a consumer advocate).

This link may expire tomorrow, but you can still find the info. on his website.
--> clarkhoward.com - Save more, spend less and avoid rip-offs

Here is some of the text:


Half of all people age 34 or younger have zero in savings
The National Foundation for Credit Counseling reports that half of all people up to age 34 have absolutely zero savings. They can not lay their hands on a single penny they've stashed away!

There are a million reasons not to save. In some cases, unique circumstances actually make it so that you truly can't save. But that's unusual. Most young people just miss out on learning important lessons about saving because their parents haven't set the best example.

Perhaps it's also harder for those under 40 to save money today because this is the first generation that has had to adapt to money being plastic.

Some 15 years ago, when you wanted to buy something, you looked in your wallet or purse. Either you had the cash and made the purchase or you didn't and you walked out of the store. Your spending was controlled by your absolute supply of money.

But today, so many young people have never had to live based on a finite supply of money. It seems as if there's always the unlimited possibilities credit lines and in-store financing.


This info. is kind of scary ... :eek:

SOS
.
Does that include equity in an owned home?
 

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Don't argue with an insomniac.
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Does that include equity in an owned home?
Dude! Most of them have reverse equity these days :rolleyes: And it probably doesn't include the Never-to-be ever paid of Visa debt at 20% interest. I'm sure it's WORSE than he says.
 

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Perhaps it's also harder for those under 40 to save money today because this is the first generation that has had to adapt to money being plastic.

Some 15 years ago, when you wanted to buy something, you looked in your wallet or purse. Either you had the cash and made the purchase or you didn't and you walked out of the store. Your spending was controlled by your absolute supply of money.

But today, so many young people have never had to live based on a finite supply of money. It seems as if there's always the unlimited possibilities credit lines and in-store financing.


This info. is kind of scary ... :eek:

SOS
.



Most members of Congress are over 40 and they seem to have the same problem spending money that they don't have. Maybe the young people are just following the lead of the leaders.
 

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"Rosco" Thread Derailer
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SOS. this is why our country is in the mess we are. Most (not all) of the younger generation thinks they are (or were) entitled to credit when they, as did the banks, know they couldn't afford it.
Welcome to the American Dream. :rolleyes:
 

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Most financial analysts agree that a home is a liability vs an asset.

I'm 26, I have done well for myself, but I don't have job that makes gobs of money, I've invested wisely and spent wisely, I own my tundra and 06 ram outright. A lot of my friends though my age and older do not have anything saved, one couple I know make just over 100k a year and they always seem to have money problems. Best way is to limit your debt, not having anyt debt sure makes life easy.

As far as investing, the earlier the better. Compounding interest is an amazing thing. Example investing $100 a month at 6% from age 18 to 55 = 163k whereas investing $350/mo at age 35 to 55 equals the same. Check out moneychimp dot com or any other site that computes compounding interested. As for the 6% look long term, I remember owning bonds @7% , the lending rates will climb back up as well as the market, the dows made substantial gains over the last several months.
 

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the problem isn't just not learning good savings habits, it has a lot to do with younger generations not knowing the difference between wants and needs. unfortunately the older generations aren't being good examples. how many people do you know that bought a big flat screen TV because someone they know got one? now how many of those got the TV, but everyone who knows them knows that they can't afford it? its pretty sad, and is only getting worse.
 

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NASH
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I am proud to say that I am not in that 50%. I have a hard time believing so many people can be such idiots. I've always been raised to know that SS and medicare won't be around when its my turn. I've always known I'd have to fend for myself.

I'm glad I'm investing in non taxable funds. I don't intend to help anymore than I'm forced to.

This is very frustrating news.
 

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I have a perfect example, my nephew is 26, he did some weekend work for me, and I paid him when the job was complete. Instead of using the money wisely, he took time off work (a few hours here and a few hours there), then he invested at the local pub, when all is said and done he will be ahead of the game by zero.

By comparison, when I was his age, I put in so much overtime where I worked that in the first quarter, I had already made my wages for half the year.

Don't get me wrong, I had fun too, and I spent a fair bit of money in bars, but I also saved.

It just frustrates me.
 

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Good point hickleberry, just did the math I'm working almost 700 overtime hours a year, I enjoy my job and still see 3 day weekends on a regular basis (or 3 days scattered). Just make sure you don't burn yourself out and tjat you enjoy your time off.
 

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First of all, I would be surprised (greatly surprised) if this was limited to those under 34. Based on the fact that the national savings average for all age groups reached -1.6% in 2006, I would guess that a lot of people in a lot of age groups don't have any meaningful savings.

A lot of boomers are in big trouble. They had a sense of entitlement as well (not just the younger generation as flash says). I also disagree that you can blame the under 34 crowd for out current mess. They weren't the ones doing Vegas-style betting on Wall Street. Nope, we're all in this together, and Americans of all ages should start acting their wage as Dave Ramsey says.

In any case, even for those of us who have saved diligently it will probably be a zero-sum game as we'll be responsible for bailing out all of those who didn't save. I've lost a couple fo friends since the mortgage meltdown for my staunch opposition of the mortgage bailout. Yuppies who lived their life leveraged up to their necks in Lexuseseses and $400k cribs and who told me I was stupid for living below my means. Imagine their indignation when I suggested I shouldn't be responisble. In the end, they are right. I was stupid, I should've been rolling in new carrs & living in a better house & being the one getting a handout.

Ram is right, the realty racket has somehow convinced everyone that a house is an investment, when people should be thinking of them as shelter. In the last 100 years or so, houses have only beat inflation by 0.6%. When you factor in upkeep, a house is, as Ram says, a liability.

No one should carry any debt, except maybe a mortgage (only one). It makes life a lot easier when you not only don't carry debt, but have a big cushion of liquid cash.
 

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First of all, I would be surprised (greatly surprised) if this was limited to those under 34. Based on the fact that the national savings average for all age groups reached -1.6% in 2006, I would guess that a lot of people in a lot of age groups don't have any meaningful savings.

A lot of boomers are in big trouble. They had a sense of entitlement as well (not just the younger generation as flash says). I also disagree that you can blame the under 34 crowd for out current mess. They weren't the ones doing Vegas-style betting on Wall Street. Nope, we're all in this together, and Americans of all ages should start acting their wage as Dave Ramsey says.

In any case, even for those of us who have saved diligently it will probably be a zero-sum game as we'll be responsible for bailing out all of those who didn't save. I've lost a couple fo friends since the mortgage meltdown for my staunch opposition of the mortgage bailout. Yuppies who lived their life leveraged up to their necks in Lexuseseses and $400k cribs and who told me I was stupid for living below my means. Imagine their indignation when I suggested I shouldn't be responisble. In the end, they are right. I was stupid, I should've been rolling in new carrs & living in a better house & being the one getting a handout.

Ram is right, the realty racket has somehow convinced everyone that a house is an investment, when people should be thinking of them as shelter. In the last 100 years or so, houses have only beat inflation by 0.6%. When you factor in upkeep, a house is, as Ram says, a liability.

No one should carry any debt, except maybe a mortgage (only one). It makes life a lot easier when you not only don't carry debt, but have a big cushion of liquid cash.
I was going to mention earlier, a lack of debt isn't the same as savings. You could be debt free and still living off 100% of your income, which brings me back to home ownership. If you rent a house, you will always have that debt, but if you buy a house, the day it is paid off is the day you give yourself a raise.

I had this exact discussion on Saturday, a bunch of us were talking about the thousands we spend on house upkeep, and the guy renting just laughed at us. His monthly payments are about the same, but there are no surprises, no replacements of things like a furnace.

I told him I understood where he was coming from, but that furnace isn't just money out of pocket, I OWN that furnace. In 30 odd years when its time for me to retire and move the eff away from the city, I can sell my house (which is completed paid off...and in most people's cases 30 years is enough time). I move, he moves, the difference is he moves into another rental home, and I pay for my next place outright.
 

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Buying a house is a form of enforced savings. However, with interest-only mortgages, "balloon" mortgages, refinancing the house (and thereby starting back from square 1 on the mortgage), and mortgages for a value higher than the house value, means that the house will never be paid off, and so you're really in the same position as the renter, with the added negative that you can't just walk away from it with no consequences.
 

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Buying a house is a form of enforced savings. However, with interest-only mortgages, "balloon" mortgages, refinancing the house (and thereby starting back from square 1 on the mortgage), and mortgages for a value higher than the house value, means that the house will never be paid off, and so you're really in the same position as the renter, with the added negative that you can't just walk away from it with no consequences.
Ah, well, that's the rub isn't it.

When you renegotiate at a lower interest rate, you keep the payments the same (you've learned to live without the extra cash until now), then you just keep socking it to the principle
 

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Ah, well, that's the rub isn't it.

When you renegotiate at a lower interest rate, you keep the payments the same (you've learned to live without the extra cash until now), then you just keep socking it to the principle
But when you roll all your accumulated credit card debts into your mortgage, crank up the principle to accommodate the newly acquired debt and even with a lower interest rate your payments don't go down, and you need to use your credit cards to pay for your lifestyle that costs more than you earn, the writing is on the wall.

What you need to do is get a better paying job. ;)
 

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No one should carry any debt, except maybe a mortgage (only one). It makes life a lot easier when you not only don't carry debt, but have a big cushion of liquid cash.
it sure does. I work in a very wealthy side of town, hell it's it's own city within SA and in an industry not generally thought of as profitable industry. The people there sometimes treat you like a commoner but then they notice I wear a breitling watch that's worth some peoples yearly mortgage. Some will rudely ask if it's real, my best response so far has been as real as the check I wrote for that limited tundra parked out front and I just smile.

Debt just piles up, do without now so you can enjoy life in the future, now that's not to say squirrel everything away till you retire but make wise choices, I had a 2,400Sqf semi custom built home, sold it when I thought I was going to move out of state. Now I'm residing in a modest apt. I realized a single guy doesn't need a house that big, I honeslty forgot what was in one of the rooms as I went over 7 months between going into it. Kids these days see all these "reality" shows like idiots on the hills, and I can't stand Kim kardashian, she's famous for being famous. But the idiots that watch these shows think they have to have it all as well.
Instead of charging something, pay yourself in installments then buy it, that helps prevent impulse buys (started doing that after I bought my ram). I really want a kenwood nav system that some of yall have and I drool over it but figure 50 bucks a week will give me pleanty of time to research it and will enjoy it that much more that I waited. My idiot married friends had been fighting a lot so what do they do, they spend money and buy a livingroom set, just like the time before they were fighting so they bought motorcycles. The worst thing is most of the fighting stems from money issues. Go figure.

Easiest way I explain the benefits of getting out of debt to my friends is paying off a 500 a month bill is like a 1000 dollar pay raise, go from 500 to a debt to 500 something else you need. Yeah it's kinda funny math but not really.
 

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[...]

As far as investing, the earlier the better. Compounding interest is an amazing thing.

[...]
Bingo.

When I was a freshman at university, I read a biography of Albert Einstein. Now, here was a guy who set the world of physics on its ear at a young age, thereby making himself a household name. He was interviewed by a newspaper report who asked him, "What is the most powerful force in the universe?" His answer was, "Compound interest."

Compound interest is quite simple. If you invest in something that periodically pays a return (interest or dividends, perhaps), just reinvest those returns. The point is that the old interest then earns interest. A little bit invested over a long time is worth the same at retirement as a lot invested over a short time. So, invest early and often, reinvest what it earns, and watch it grow.

Want an example?

Suppose you began saving up every day and investing it monthly in a mutual fund. How much? How about ten bucks every day? That's the price of a burger and a pack of cigarettes. Eat a home-made sandwich and some crackers at lunch instead of at Burger King. Don't smoke. Ten bucks is easy.

Suppose the mutual fund returns seven percent per year, average, over the years as you age from 18 to 65. Suppose you reinvest its earnings in the same fund.

If you retire at age 65, it would be worth $1,315,928.76.

All from ten bucks per day. Think what you could do with eleven bucks per day, or fifteen, or twenty.

Been there, done that. I began investing in mutual funds shortly after I graduated. I retired at age 48, with no debts, and no pension. I live off the earnings of my investments.

It is NEVER too late to start investing, and right now is a fabulous time.
 

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This age group will become the future disciples of the entitlement society.
 
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