Being setup for failure by society

[taiyuu_otoko]

I have no idea what this post is about

Sara-mooch is just bragging that he ain't no chump like the rest of us.

But I think his point is to always aim for self-sufficiency regardless of your environment, and you'll be ok. Never depend on others. Ever.

 

[Julius_Seizeher]

SS resident financial advisor to the rescue.

I'm not going to lecture you guys about disciplined asset allocation and debt management strategies, I can see that you get the idea: Keeping up with the Jones is as much a part of the Matrix as getting married and pretending men don't make the world go around.

So whatever your income/debt situation looks like, there are steps you may all take to gain control of and add value to your financial life.

1. NO traditional savings accounts, they are worthless. You use a checking account to cash flow your life, and you get a Municipal Money Market account for cash savings. You get a guaranteed 4-6% annual growth with ZERO Federal tax liability and 100% liquidity with no strings attached. Talk to your banker or financial advisor.

2. With regards to retirement planning, you want the least amount of qualified money possible in your portfolio. Fyi, qualified monies are funds invested PRE-tax, ie 401K, 403b, Traditional IRA, etc. There are several reasons for this: For one, tax rates only go one direction: UP (unless you get off your duff and help get the Fairtax enacted). Secondly, statistically you will find yourself in higher tax brackets later in life due to accumulation of wealth and assets. Qualified money also has adverse effects upon Medicare and SS. The moral of the story is, you want to pay your taxes NOW instead of later, and that's the story of life, isn't it? Pay your dues now so you can rest in the shade later. And in 2010, the old rules for Roth conversion are gone; anyone in a qualified plan has the option to convert to a Roth now (Uncle Sam wants your money now instead of later). So if you have a Traditional IRA, convert it to a Roth this year. If you are in a 401K, contact your administrator and convert it to a Roth 401K. 403b people are stuck, Tax-Sheltered Annuities are by nature qualified accounts. Of course, all employer contributions will still be qualified, but yours will be after-tax.

Most of all, if you do not currently work with a financial advisor, GET ONE. Your bank probably has a guy you can consult when you go in on saturday morning, get an appointment. Hell, send me a PM and I will be happy to give you an evaluation. The Number ONE tragedy I see time and time again are people who mistakenly think they cannot do a lot more than they actually can. Take the reigns of your financial destiny!

I'd post more, but I have to get back to work.

 

[squirrels]

I laugh sometimes about owning a house...maintaining a house is like a second job, only instead of getting paid for doing the work, you're PAYING to do the work.

I keep looking at moving further from the city...supposedly I can get much more house for the same money. If I'm paying much more money, I want to make SURE it's somewhere I'm going to want to live for the rest of my natural life. Only then would I ever consider taking on that kind of debt.

I wouldn't even call myself that "financially savvy". At 30, I probably spend much more money than other people. But I spend it because I CAN.

I look at life differently...I don't want to retire at age 70, being only a handful of years from death and not fit to enjoy my money. I save what I feel comfortable saving and have been thinking for a while about opening an IRA, but if my buddy wants to take a trip to Green Bay to watch a football game, or I decide I want to buy a bike and ride, I'm not going to wait until I'm 65 years old and retired to enjoy those things.

Money itself is worthless when you're dead...all it's worth is what you get out of it. You have to think about the "opportunity cost" of saving that money, all the time you're not living, and whether when you're 50 or 60 whether you can have as much fun with all of your invested cash as you could when you were 30 or 40. I talk to my friends all the time about the "silver bullet retirement plan"...meaning if I run out of money in my old age, a bullet to the head solves all problems. I'm half-joking about it, but I'm half-serious.

I don't spend a lot of money on stupid crap. I bought a townhouse just before the housing boom, so I still have potential equity here. I don't do a lot in terms of "housekeeping". I have little furniture or decoration. I fix things when they break functionally, to the bare minimum to preserve the property value and remain comfortable here, until I figure out where I want to live.

I've tried the whole E-Trade manual investing stuff...I was never good at it. I didn't have the patience to follow shareholder meetings or to evaluate stocks, nor did I have the financial savvy. I have one of those ****ety 401k-style retirement plans through my job...the only reason I put money there is because they match it up to 5%, so it's an instant 100% return. The most I ever see myself doing is opening an IRA. One of those money-market accounts sounds like it might be a good idea as well...I'll have to check around.

But if I feel like going out and having a GOOD steak, or buy some new climbing gear and get a gym membership...why am I going to pinch now? Time is the only finite resource we have. I can't sit on my thumbs now in favor of an imaginary "retirement" in a future that isn't even certain. I could die in my sleep tonight. I could (very unlikely but possible) lose my job.

The only way I ever see myself getting "wealthy" would be lottery or coming up with some product or service that I can turn into a business. I think sometimes about writing...I just don't know what to write about that anyone wants to hear. I'm knowledgeable about everything but an expert in nothing.
As a man with a logical, rational mind, I suppose I am somewhat lacking in creativity.

 

[Scaramouche]

Dear Backbreaker,
"I have no idea what this post is about" Hmmm...Yeah,lack of intelligence,inability to appreciate the words of those who unlike you think outside the Box....Sadly I think you will always be a loser.

 

[Scaramouche]

Dear Tokyo,
Am I perhaps being a trifle optimistic in thanking for your back handed compliments?

 

[Jules Verne]

Some of these terms make no sense to me.

Hahaha.

 

[Luthor Rex]

Funny, isn't it?

I'll tell you...it gets lonelier every day when you choose not to walk "the path".

I don't believe that there's some secret conclave somewhere that's setting aside the "proper path" in life, but damned if these patterns DON'T arise naturally out of human evolution. Then the "shaming" comes...people so insecure with the lives they've chosen that they start wondering "what's wrong with you" if you're not doing the same thing.

I've thought about this too. Here is what I think it really is: most people are just very strong conformists. But they aren't just about being a conformist for themselves, they want everyone else to also be a conformist. It makes them feel safe or something.

Think back to high school: probably the time of the most demanding conformity of our lives. Same thing is basically going on in the adult world, but kind of a different form.

Also, old but good video: http://www.youtube.com/watch?v=mTkp9UqVVHs

 

[taiyuu_otoko]

Dear Tokyo,
Am I perhaps being a trifle optimistic in thanking for your back handed compliments?

more like underhanded, but yea, I'm all for optimism..

 

[Ballie]

Originally posted bysodbuster
having a wife and society expecting you to "live like a PROFESSIONAL". So you can be talked into buying a bigger house and better car than you really need.

Been through this one and see my fellow engineers getting sucked in this lifestyle. Lost most of it though when she decided to cash in. But I am now debt free and living a good life. Banks want to get you back in debt - you should see all the offers of personal loans I get.

But I am too wary to be enslaved again either by marriage or debt.

 

[sodbuster]

As far as my investment in land, time will tell if I'm a fool or a genius-if the towers don't get built, the return on land is only about 2% per year[plus the inflation hedge],while the payments are more than that. But I'll leave it to my kids and hunt on it in the meantime.

 

[mrRuckus]

I'd invest in stocks but the markets can't be trusted anymore; it's too much of a gamble.

Dude you need to read some stock market books. Try peter lynch.

Over the long term you're going to make out like a bandit on stocks. The key is to keep your money in there instead of panicing like everyone else just because the market falls. It always rises again.

Rich people like when the market is down. You know it's gonna go back up, so you buy stocks now while everyone else is scared.

 

[backbreaker]

Dude you need to read some stock market books. Try peter lynch.

Over the long term you're going to make out like a bandit on stocks. The key is to keep your money in there instead of panicing like everyone else just because the market falls. It always rises again.

Rich people like when the market is down. You know it's gonna go back up, so you buy stocks now while everyone else is scared.

it's more than reading a book, it's the pricinapality of the entire issue

investment is built now as a means of exchange and not production.

wall street is just a gambling institution built upon speculation now

whereas Wall St. was once the engine running the markets that we all love so much, it has now become nothing more than a gambling scheme, and from a general princplality of it, I stay out.

I own shares of 1 stock, CDI and that is for 2 reasons. First, i know the indusutry well enough where I feel comfortable investing money in it, and 2. i believe in what CDI is trying to do in the long term for horse racing industry.

 

[LeftyLoosey]

Dude you need to read some stock market books. Try peter lynch.

Over the long term you're going to make out like a bandit on stocks. The key is to keep your money in there instead of panicing like everyone else just because the market falls. It always rises again.

Rich people like when the market is down. You know it's gonna go back up, so you buy stocks now while everyone else is scared.

I think it's incorrect to believe that a paradigm that has only existed for 100 years or so is necessarily permanent. Take a look at Japan; the Nikkei has not recovered since the late 80's. I believe the world markets in general are starting to follow that trend. The days of exponential economic expansion are over.

More people in this world make their money by being good at what they do, not through investments. I intend to make my money at being good at what I do, and even if it doesn't make me rich, it will still make me happy.

 

[synergy1]

Odd you mention a parabola and a periodic function as if they are the same. The only real function we can assign to our monetary system is the exponential growth of our money system ; national debt, inflation etc. Otherwise, you are simply seeing what you want to see and there is no real 'rhyme or reason' to the market as a periodic function would suggest. The swings are due to greed and fear dominating one another, but they are hardly comparable to sin/cos functions to anyone who took high school mathematics.

My history is a bit spotty, but it seems to be that fiat currencies have a habit of failing. They are backed by nothing, and eventually lose all their value. It already happened with the continental. What is to stop it from happening again? How do you hedge against the dollar? is it even worth it?

For now, I am going to wait until some bad news hits and gobble up some shares of companies I thought have some room to grow. I don't really do much research and have been pondering index funds or value invested mutual funds, but don't like the idea of management fees associated with them. Wish I had more time for this stuff right now

 

[Julius_Seizeher]

Guys, don't fear the markets. And don't think of stock appreciation as the only way to make money investing. Stocks and bonds have an inverse relationship with regards to performance; stocks grow like wildfire in bull markets and bonds are easy money in bear markets. Warren Buffett is the richest man in America because he has been so good at calling the bulls and bears, the one who gets his money in first is going to win.

I do agree with backbreaker to an extent, there are some pretty ridiculous investment vehicles out there now. For one, I think it should be illegal to sell someone's mortgage on an exchange, and don't even get me started on hedge funds. Big money, big risk, loose regulation, run by criminals who kill each other and themselves when they lose the wrong guy's money, real wild wild west...I read an article last week about hedge funds giving odds on lawsuit judgments, wtf is that?

It's an (equity) buyers market out there, boys. The world isn't going to end but it will leave you behind if you are content to wallow in doubt, fear, and negativity. This is a time of profound opportunity, anyone can sit on the sidelines and whine about how it's all over with.

 

[samspade]

This is a great thread. I myself got sucked into the credit card lie when I was young. The one thing I can say in my defense is that I didn't blow it on material goods for the most part, but on traveling. I suppose that doesn't justify living beyond one's means, but I don't regret the trips I've taken. Otherwise, aside from financing a car for a year (then selling and paying off), I haven't done the car/house/marriage thing. I have student loans, but I went to a state school with extremely cheap tuition.

Lately I've been more responsible about these things, though. I opened a 401k and I put away 15% pre tax every paycheck...so at least I'm building assets to offset my liabilities. My employment is actually more dependable now than in the past, though my income has been somewhat stagnant. I'm getting a good tax refund this month, and I guess I'll hold on to some for emergency funds.

Warrior, thanks for the Dave Ramsey link. I'm going to take a look. I'm trying to be good about credit cards and pay them off, but it's not easy. It's the one albatross in my life and I'm pretty ashamed of it.

 

[brokenupinside]

I love reading these threads,pissing contest,my deek is bigger than yours and so on...and on and on........

 

[synergy1]

There are no doubt about the booms/busts of the market over the years, but as someone with a fairly strict mathematical background, one would be disappointed if I didn't jump in I try and buy when markets are as depressed as much as the next value investor, but I don't try and apply mathematical models to 'predict' any such behavior.

t's an (equity) buyers market out there, boys. The world isn't going to end but it will leave you behind if you are content to wallow in doubt, fear, and negativity. This is a time of profound opportunity, anyone can sit on the sidelines and whine about how it's all over with.

I disagree. I have my own simple models in order to determine the intrinsic value of an equity, and out of the 12 or so I am eying, 3 are priced right. I buy on bad news...the worse the better off. Its too bad I am not really for car companies because toyota's recent debacle is a perfect buying opportunity. Since I am patient, the money I would be investing into company stock is just sitting in a low interest rate account. Any suggestions for what to do with the money while I wait? Perhaps those Money market things you mentioned earlier? Are there drawbacks to those? Fees? Minimums?

 

[Mr.Positive]

My history is a bit spotty, but it seems to be that fiat currencies have a habit of failing. They are backed by nothing, and eventually lose all their value. It already happened with the continental. What is to stop it from happening again? How do you hedge against the dollar? is it even worth it?

All fiat currencies fail, and have failed, given time.

My favorite story about that was during Germany's currency failure, 1940's time, a man took a wheelbarrow full of cash to the store to buy a loaf of bread. When he got there, the store was closed for the evening. Figuring nobody would take all that worthless cash, he left it there to return in the morning to buy his bread.

He was right, the next morning all the cash was there. On the ground, someone stole the wheelbarrow and didn't want the cash.

Here's good Ron Paul speech that correlates to this..and may answer your questions.

http://www.youtube.com/watch?v=EhYfm4f7PXQ

I really like his statement at the very end, after talking about how we can fix these issues..

"Signs abound that angry Americans are now more ready than ever before for a change in direction that is indeed real. If this program were improvised-even suddenly and dramatically-the adjustment, though significant and to a degree somewhat painful, would be much shorter and of minor consequence compared to the chaos and poverty that will result if we refuse to change our gluttonous appetite for a free lunch."

 

[backbreaker]

that's pretty screwed up.