[Pesqueeb]

I follow NPR on teh Facebooks and they posed this question:

Help NPR with a story: We are looking to talk with someone who is employed, between the ages of 30-50 and is playing it safe with their savings. Are you avoiding aggressive investment options? If so, share your story in the comments and we may contact you. Thanks!

It got me thinking about what were doing with ourselves and our money, especially when such a large number of respondees (is that even a word?) came back with some version of "What Savings" or "I don't even have a job". Discuss.

I'm 33 and reading all this makes me realize how incredibly fortunate I am. We have equity in our house and just recently refinanced at a shockingly low rate. I'm a blue collar worker (Aircraft Mechanic) working for an airline that is actually seeing growth. We have some cash in a money market but the interest rate right now is <1% IIRC. I currently have an unrealized loss in my 401K of just under 7000 dollars. "Aggressive investments"? Even as well as we have it right now, there is no way I would be comfortable in something with more risk than a money market or treasuries. My most aggressive investment right now is paying down my mortgage. My hope for my financial future is to pay for my daughters college and have no mortgage by 45. Sad to realize but the people who joke about putting cash in their mattresses are probably doing the smart thing, I'm horribly afraid that were pissing money away sinking it into out home.

 

[ridiculous]

My most aggressive investment right now is paying down my mortgage.

Put gold in your mattress!

 

[mandown]

APPL and HANS are gonna make me rich!

 

[Pesqueeb]

Put gold in your mattress!

WTF do I know? You might be right. Most people seem to disagree with me but I'm still (mostly) convinced that being debt free with zero mortgage is about the best thing I can do for my future. Its been discussed at length in other threads, but huge mortgages, zero savings, and negative equity is why the boomer generation is fvcked. I don't want to be one of those clowns.

 

[mandown]

agreed.

 

[KavuRider]

WTF do I know? You might be right. Most people seem to disagree with me but I'm still (mostly) convinced that being debt free with zero mortgage is about the best thing I can do for my future. Its been discussed at length in other threads, but huge mortgages, zero savings, and negative equity is why the boomer generation is fvcked. I don't want to be one of those clowns.

Those are the people I get to talk to all day.
Boy am I glad this position ends in a week...

 

[stoney]

I've lost $20k in the last 6 months. My upside down investments are staying and everything else is in income generating securities or cash. I think at this point I am about 80% cash for my taxable funds; 15% for my retirement funds. I am paying my dividends out in cash and putting them into a *high* rate mmkt fund.

 

[ohio]

I've been without income for a year and a half. What savings and investments I had have gone into either my living expenses over that time, or into a venture that statistically speaking is a black hole. I still have about $40k remaining in student loans that can't be forgiven in bankruptcy court.

There are very few rooms I can stand in where I'm NOT the most irresponsible person there.

What I'm betting on? Either...
a) BRD will crush it. I've ridden the bike enough to believe that what we have is ****ing magic. Like the first time you rode shaped skis, a full suspension bike, or used an iPod, magic.
b) I've got "CEO" on my resume now, bitches. Peace. I'm moving into the 1%, and you know they reward failed CEOs just as well as successful ones. Later, suckers.

 

[jimmydean]

Ohio, I wish you all the best in BRD and hope to be one of the first owners of one of your dirt machines very soon. I would like to think that at some point I will be comfortable, but I have not made the best choices with money, either. I do have a well paying job that right now is in insane demand and I have gotten close to $15k in a year in raises. But I also know that at 40 my salary is due to level off soon, so I am doing what I can to make what I feel I will need for later.

 

[ridiculous]

WTF do I know? You might be right. Most people seem to disagree with me but I'm still (mostly) convinced that being debt free with zero mortgage is about the best thing I can do for my future. Its been discussed at length in other threads, but huge mortgages, zero savings, and negative equity is why the boomer generation is fvcked. I don't want to be one of those clowns.

Yeah man. Debt free and off the grid as much as possible is the way to be.

I just enjoyed the statement that's why I laughed, it seems every boomer I talk to now tells me to buy gold. Looking at the charts, its hard to argue with.

 

[-BB-]

There are very few rooms I can stand in where I'm NOT the most irresponsible person there.

So is THAT why you like hanging out here on RM?

Case in point:
http://www.ridemonkey.com/forums/f2/hilarity-ensues-246204/

Yeah, I have a pot sticker on my bumper. Doesn't mean some prick has the right to get away clean free just because his ass is a federal officer.

Just because they are law enforcement doesn't mean they are always right, dude....

I'm just going to ask that charges be held against the driver, administrative punishment for the officers (a month of unpaid leave sounds about right), the court fees be paid and a few weeks at a chiropractor

 

[Pesqueeb]

Yeah man. Debt free and off the grid as much as possible is the way to be.

I just enjoyed the statement that's why I laughed, it seems every boomer I talk to now tells me to buy gold. Looking at the charts, its hard to argue with.

Guess mine is broken. Carry on then!

 

[dante]

WTF do I know? You might be right. Most people seem to disagree with me but I'm still (mostly) convinced that being debt free with zero mortgage is about the best thing I can do for my future. Its been discussed at length in other threads, but huge mortgages, zero savings, and negative equity is why the boomer generation is fvcked. I don't want to be one of those clowns.

Wife and I were talking about what to do with the extra money if we refinance (~$75/month or so), whether we should save/invest it or use it to pay down the mortgage. My gut feeling was to save so that when inflation hits we can start getting a better return than our mortgage is costing us, except for the fact that the 30y US treasury is sitting at 3.2% right now. That's bond holders estimating that the average inflation over the next 30 years is going to be just 3.2% (minus carrying costs/opportunity costs/etc). That's pathetically low....

So yes, our goal is identical to yours, to have our mortgage paid off by the time we retire. I don't care whether we're in this house, or whether we move a couple times in between, but our mortgage *will* be paid off by the time we hit 65/67.

 

[jimmydean]

So yes, our goal is identical to yours, to have our mortgage paid off by the time we retire. I don't care whether we're in this house, or whether we move a couple times in between, but our mortgage *will* be paid off by the time we hit 65/67.

And I will start the Occupy Dante's Crib movement and park it on your lawn. I won't crap on it, though.

 

[-BB-]

Wife and I were talking about what to do with the extra money if we refinance (~$75/month or so), whether we should save/invest it or use it to pay down the mortgage.

No Credit cards, or car loans that are over 3.2%?
nice!

 

[stevew]

i hope to die like my grandfather and greatgrandfather....with money hidden in the walls and attic of the house.

 

[eaterofdog]

I'm still (mostly) convinced that being debt free with zero mortgage is about the best thing I can do for my future.

This is me. I don't owe anybody a damned thing. Regardless of the financial feasibility, it's nice to sleep like a drunk baby.

 

[dante]

No Credit cards, or car loans that are over 3.2%?
nice!

No credit cards, no car loans, and the only debt we have outside of our mortgage is a couple grand left on my wife's student loan that's locked in ~3.5%. Fvck debt.

 

[Pesqueeb]

No credit cards, no car loans, and the only debt we have outside of our mortgage is a couple grand left on my wife's student loan that's locked in ~3.5%. Fvck debt.

We have credit cards, but balance is zero, IIRC were done with the wifes student loans in 4-5 years.

 

[stoney]

We have no cc debt (have like 10 cc's that we use monthly to max perks), no mortgage (and no house), a 1.99% car loan for $16k, and the last $2200 of my school loans. We won't touch debt again unless it is to buy a house.

 

[mandown]

This is me. I don't owe anybody a damned thing. Regardless of the financial feasibility, it's nice to sleep like a drunk baby.

Having a nice sized wad of FU money in the bank goes a long way too.

 

[ALEXIS_DH]

my retirement fund (mid-level risk) has taken a 9% hit so far this year (highest risk fund has taken a 22% hit), after 2 years of 20% returns (highest risk was doing 30% anual)....

i dont have any credit cards, am debt free. cars/toys are paid for (my most expensive wordly possesions).
RM taught me if cant pay cash (unless its a house), i cant afford it.

i will stay in the mid-level risk fund until next year and see....

 

[Toshi]

It got me thinking about what were doing with ourselves and our money, especially when such a large number of respondees (is that even a word?) came back with some version of "What Savings" or "I don't even have a job". Discuss.

I'm 29 and married. Both my wife and I have a metric ****-ton of student loans, but our overall financial health is ok. How much is a metric ****-ton? Try $12.5k for her undergrad @ 4-5%, $91k for her NYU masters (yowch), and $144,562.33 @ 4.25/4.5% as of today for my med school bill. (No undergrad debt for me, thankfully.)

Come June 30, 2014, when I finally finish fellowship and emerge as an attending radiologist, 10 solid years after starting med school, my loans at least should be worth it, though:

(Her loans worth it? Not so much in the strict monetary sense. She wanted to go to NYU for grad school, though, and got in, so this is her indulgence. Whatever keeps her happy is worth it, right?)

Our retirement savings are pretty pitiful: under $20k for each of us, with hers in god knows what and mine entirely in energy sector stocks out of cynicism/pragmatism. Since I don't plan on touching the money until, well, retirement, I don't really care about its month to month oscillations. On the other hand we have excellent, unblemished credit, no mortgage or other assets tying us down to any particular area, a single $8,000 car loan @ 4% (it was a used car, thus the "higher" rate), and absolutely no credit card debt.

I'll be right on the border of the 1% income-wise in the future, but the effect of repaying our loans will drag us down below that threshold. (I'll still be one of you guys <sniffs tearfully>. heh. ) We'll try to live a comfortably upper middle class lifestyle, nothing more, and will try furthermore to have a sane, resellable house paid off and adequate retirement savings in the bank as soon as possible.

 

[Hello Kitty]

Student loans WTF?

Has no one heard of working to pay for college? Somehow I was able to drag/pay my way through state university and graduate with zero debt and still land a decent first job with less than stellar grades. What is all this student debt about? Can’t afford medical school do like the guy that’s my doctor join the military and have them pay for your education yes you will have spend some time in the military but when you get out you have experience and a doctorate and zero medschool bills.

Oh and the best way to get rich is stop paying interest and start earning it rather than dumping a bunch of savings into investments while sitting on credit card debt, car loans, mortgage and student loans pay those off FIRST then you can dump tons of cash monthly into personal investments later.

Just a little common sense tip from someone who is 100% debt free homeowner and has been that way for years.

 

[jonKranked]

I got rich by selling organs on the black market. It fvcking rules.

 

[stoney]

Holier than thou rantQUOTE]

Would you like a cookie because you paid for school without loans and don't have a lon on your house? There are a lot of others here who did the same and are currently doing so. You spout financial responsibility incessantly, but leave out some key pieces regarding your history.

1) When you bought you house (all of them if you have 'upgraded'), did you ever take a loan?
2) Just what kind of great job did you get out of school, such that you are making >$150, but <$225?
2a) Was that a union job? This does have impact regarding your financial independence.
3) Did you get ANY money from family, scholarships, etc to pay for school?
4) Just how old are you? Because you might be ranting at people who are in a completely different age group, hence the differences in financial opinion.

As for school loans and the military, some are opposed to the military and find other means. Those means might mean loans or scholarships. And just to make you think about it, State schools are funded by taxes. So one way or another, you received support to pay for your schooling.

Also, just a heads up but we already have a well established and respected financial advisor on this site.

 

[Pesqueeb]

Alos, just a heads up but we already have a well established and respected financial advisor on this site.

FYI, hes not talking about you Hello Sh!tty

 

[Toshi]

Student loans WTF?

Has no one heard of working to pay for college? Somehow I was able to drag/pay my way through state university and graduate with zero debt and still land a decent first job with less than stellar grades. What is all this student debt about? Can’t afford medical school do like the guy that’s my doctor join the military and have them pay for your education yes you will have spend some time in the military but when you get out you have experience and a doctorate and zero medschool bills.

I worked throughout undergrad, both during the year (15-20 hrs/week) and at paid internships during all but one summer. Harvard was and is expensive, though. Having had my "worldly" education out of the way I then was lucky enough to get into my comparatively cheap state med school. Was it worth it? I have no regrets... but then again I also have no undergrad loans.

With regard to the military: It doesn't make financial sense. ~$150k in student loans is nothing compared to 4 years of mandatory post-graduation military service in which I'd be making at least that amount less per year. I've already put a ton of years into my training. No need to put "real life" 4 more years out in the future.

 

[dante]

FYI, hes not talking about you Hello Sh!tty

What are you talking about, the concept of paying off high-interest debt before investing in a stable post-tax mutual fund has never, ever been discussed on here. Ever.

I for one thank HK for his wonderful and insightful addition to this discussion.

 

[Hello Kitty]

1) When you bought you house (all of them if you have 'upgraded'), did you ever take a loan?
2) Just what kind of great job did you get out of school, such that you are making >$150, but <$225?
2a) Was that a union job? This does have impact regarding your financial independence.
3) Did you get ANY money from family, scholarships, etc to pay for school?
4) Just how old are you? Because you might be ranting at people who are in a completely different age group, hence the differences in financial opinion.

1)Took out mortgage on first home August 2001 paid off loan February 2009 rented homes and apartments previously while single had no need to own a home before.

2)Been series 7 and series 63 licensed rep since 1992 first job was at a small regional intuitional investment firm called Westcap Corp. (look it up fun times back in the day) selling all kinds of fun stuff yield curve notes, step-ups, step-downs, dual index floaters and of course the granddaddy of them all IO/PO’s and inverse floater CMO’s with six points jacked in it <sigh> it was truly a golden age. All this was 100% commission sales no salary no draw just you killed it eat it. I did live at home for a while and worked at the airport from 6pm to 11pm loading cargo freight as to pay car note and insurance till I could build up a book of clients, I worked at the airport for a little over 18months till I had enough income to support myself of commission sales alone. Moved around to various intuitional brokerage firms after the sh*t hit the fan in 94-95ish era. Worked for Bank United on their SBA sales and trading desk till WAMU merged with the bank then a stint at Citigroup in their retirement services division selling 403(b) plans to Hospital systems. Got burned out and took three months off and did manual labor at a buddies pressure washing business then got a job at a investment banking firm in their asset management division selling their LGIP local government investment pool (money market fund) to school districts, counties, cities etc..about a year ago I switched over to a direct competitor in the marketplace with a much better compensation package and ability to earn more commission dollars with more products.

2a) Union job you trying to insult me? Texas is a right to work state thank God!

3) I got a new 1985 IROC-Z Camaro as a high school graduation present and my first years tuition, room and board paid for got a job at the local window tinting place in town to earn beer money <sigh> life was good. (long story short) Only I could f*ck up that gravy ride and soon was back in Houston not in college and working road construction for the next two years making mad money for that skill set then driving a fork lift at a toys-r-us distributor warehouse before I realized blue-collar work was not for me. With the money I had saved went back to college on my own dime with a little help from Mom & Dad from time to time living on ramin noodles and cheap beer and got a BS in Business (barely) from Stephen F. Austin State U. I didn’t apply for scholarships or think I could receive any with my lackadaisical attitude toward school even when I was paying for it, it was just a necessary evil to get a good job I was led to believe.

4) I’m 46 and I’m well aware that there are distinct financial differences between someone right outta school for a few years and myself and of course I’ve been extremely foolish with my personal finances in the past and have run the entire gamut of employment hired, fired, laid off, working someplace you despise going to work for and I’ve $5.16 in my checking account and payday is still a week away and the car is outta gas so you ride the bus to work till then. I’ve seen good times and bad times been laying on the beach without a care in the world and week later laid off by no fault of my own wondering what the hell I’m gonna do.

4a) never have taken or even know how to apply for unemployment either I sold stuff like cars, watches etc…or borrowed from my 401k to close the financial gaps and swallowed pride took employment at places and positions way below where I was ot though I was previously. Never expecting or dreaming the government was going to bail me out.

 

[stoney]

Thank you for the honesty. We've had quite a few ranter/ravers who were very opaque about their situations.

For the most part, your situation is the same as mine (minus the road work part and I did have my actual schooling paid - I still covered CoL) all the way down to the institutional work. Albeit you are roughly 12 years ahead of me regarding the licensing. Just to note, most people you are debating with are under 33-34 and never worked in the financial industry. You also had a gret upside advantage of being in the business during the Tech boom. there was a lot of money to drag off then. You are however (and were) in the situation a lot of us are currently in, but with more prospects for work because it was boom years.

My thought process is probably 90% in line with yours and everybody here will not argue that. Our differences are in regards to the 1% vs. 99%. Tax laws that were put into place in the 1960's (AMT) were not adjusted to the point that those with %250k in savings now are middle class. $250k in 1960 was, iirc, north of $1.5mm now. there are also issues with tax brackets not adjusting for inflation. If our tax brackets were adjusted for inflation, assuming rates from TIPS, you would not be getting taken off the top as badly (or at all).

If you actually break out how much we are taxed to the end dollars point, especially at the top end of the bracket, the total dollar amount is relatively low. You also need to look at the advantages we (upper income) have with regards to maximizing the tax laws into our favor. There a massive loopholes that you and I are not, nor will ever be,affected by. Big ones are regarding Private Equity firms that allow partners to take incomes as cap gains, and the same for those with incomes >$1mm while living off interest. Neither of those things affect us, but leave you and I paying more taxes in the end.

While I do not agree with raising taxes on those making >$250, I do agree that anything over $500 should be open game. I say $250 because in SF/NY and the like, that is really just upper middle class. For the most part you cannot buy a house in either location on that income. $500 is noted because that is wealthy no matter where you are. Honestly, I would prefer to see $375, but if you cover $500 you really get a seperating line between the rich (which you and I are on a numberical basis) vs. those who have true hereditary level wealth.

That we now have the lowest tax rates of any Western country for those making >$1mm, that is something that should be corrected. While it would impact both your clients and mine, let's be honest here; how many of them would spend less because they are getting taxed more? None - they would just have a few% of their savings rate dinged.

 

[jonKranked]

wait wait wait... Stephen Austin University? why didn't somebody tell me Stone Cold started a college!?!?!?

 

[ALEXIS_DH]

3:16 bitches!!!!!

 

[Hello Kitty]

Our differences are in regards to the 1% vs. 99%. .

Hey broham I’m not denying that there is a vast difference between the rich, wealthy and super wealthy and that there “should” be something done about it (he who makes the gold makes the rules) because it’s f*cked up on both sides of the aisle.

What we don’t need is bought and paid for multi-millionaire congressmen telling us how to live and once again that’s coming from both sides of the aisle. The common thread between the 99% folks and the tea-party folks is they both don’t like the direction we are going in and I think both want somewhat of a similar outcome…change in leadership from the GOP and democrat establishment that have BOTH gotten us into this clusterf*ck.

However what needs to happen with the 99% folks is to get folks that believe in their cause their values and get them nominated and elected like the tea party did last November. Yes I realize you despise the fact that they tea party don’t want to play politics as usual in Washington this was evident during the debt ceiling crisis however radical bold moves and stances are what it’s going to take to stand up to the establishment and defeat them or at least weaken them.

Be the Koch brothers or Soros funding groups or not the bottom line is that the 1% right now is the puppet master for the politicians and even with all the lip service from Pelosi and co. they are not gonna let a bunch of #occupywhatever kill the goose that lays the golden egg.

The best advice that these 99% folks can do is get organized and work within the system to get their candidates elected for change in the future that’s what the tea party is silently doing now to make sure that Romney isn’t the GOP nominee because if he is we will still be going down the same path that Bush and Obama have us on now maybe not as fast as Obama has his foot on the gas but down the same path nonetheless.

 

[stoney]

I am not against the Tea Party for their 'shuffle the deck' outlook on politics. My concern is rooted in the methodology (cut all funding instead of focusing it in places that will make the US more competitive) and strong appeal to the religious right. Religion has no place in government and it was stated so in 1787 on the Constitution. The reality is, the Tea Party and Occupy want the same thing albeit from different means.

If only both sides could come to a mutual center ground regarding their outlook on current government, they could make for a truly powerful lobby.

and on a side note, Bachmann scares the holy isht out of me. I'll take Paul any day over that nut bucket. I just wish they had a candiate that didn't thump the bible first and look at the needs of the masses last.

 

[Hello Kitty]

and on a side note, Bachmann scares the holy isht out of me. I'll take Paul any day over that nut bucket. I just wish they had a candiate that didn't thump the bible first and look at the needs of the masses last.

It's all about MONEY who can raise the most it's gonna come down between Romney, Perry and Cain.

Paul dosen't have a chance Gingrich is clearly the smartest of all of them but he isn't in it to win it and just wants to be known as a former presidential candidate so he can sell more books i liked Pawlenty but he fizzled out quickly.

It's all about the $ if the tea party really wants to change things then the choice has to be Cain to thrown their $$$ behind because Perry is a proven campaign cash machine and Romney has the support of the establishment republicans.

you may laugh at the 9-9-9 plan but it shows that he is at least thinking and throwing ideas out there and you gotta respect that.

 

[stoney]

The breakdown with the 9-9-9 plan is scary though. It raises taxes for pretty much everybody except the upper 1%, for whom it drops.

 

[Pesqueeb]

Gingrich is clearly the smartest of all of them

Well, the bar has been set pretty low.