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(Marketwatch)   Nearly 25% of Americans have no emergency savings. Good thing rioting, a pandemic, and global economic implosion isn't an "emergency"   (marketwatch.com) divider line
    More: Scary, Household income in the United States, Dow Jones Industrial Average, Unemployment, United States, lower income, Dow Jones & Company, Economic inequality, financial hardship  
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234 clicks; posted to Business » on 04 Jun 2020 at 10:35 AM (5 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



44 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-06-04 10:05:50 AM  
I guess if I can't be a part of the 1% the 25% will do.
 
2020-06-04 10:10:42 AM  
Forget emergency savings. Isn't something like half the population unable to meet a $500 emergency expense?
 
2020-06-04 10:30:31 AM  
What, didn't you get your $1200 in mid-March? That didn't cover your expenses through July?
 
2020-06-04 10:36:20 AM  
And the other 75% have had to spend their emergency savings during this emergency and now no longer have emergency savings.

Can't wait to see what happens once the moratorium on evictions is over!
 
2020-06-04 10:41:34 AM  

RussianPotato: And the other 75% have had to spend their emergency savings during this emergency and now no longer have emergency savings.

Can't wait to see what happens once the moratorium on evictions is over!


You logged in to the wrong account again.
 
2020-06-04 10:45:05 AM  

kryptoknightmare: What, didn't you get your $1200 in mid-March? That didn't cover your expenses through July?


With the tax code changes..at least for me,a good chunk of that went right back to Uncle Sam...
I just love supporting millionaires with tax cuts...
 
2020-06-04 10:46:40 AM  
What's the percentage of corportations who couldn't handle a week of depressed sales?
 
2020-06-04 10:50:43 AM  

Gubbo: Forget emergency savings. Isn't something like half the population unable to meet a $500 emergency expense?


And that included whether they could beg/borrow from friends and family.

Emergency savings that don't cover a full month of all living expenses aren't emergency savings, it's the float in the till.
 
2020-06-04 10:53:54 AM  
stonks are up on news of widespread rioting this week. that's the sign of a healthy stonk market for sure.
 
2020-06-04 10:55:38 AM  
Yet the line at every Starbucks drive through is always two blocks long.
 
2020-06-04 10:59:14 AM  
If people saved the economy would slow down. Spend, spend spend! Keep that capitalist machine fed!
 
2020-06-04 11:01:10 AM  
But I was assured that the tax break of a couple years ago would eliminate income inequality.
 
2020-06-04 11:06:37 AM  
I haven't received the stimulus yet, been off for 11 of the past 12 weeks. Haven't seen any UC either. We spent our emergency stash. Which, apparently, none of the corporations had any - looking at you airline passenger industry.

We have a lot of stuff to reverse when Trump gets blasted out of office in November. I would like to see if we can try to hammer his ass the moment the final official vote numbers come in. His penchant for destruction and grifting will increase exponentially as a lame duck.
 
2020-06-04 11:13:21 AM  

AngryDragon: Yet the line at every Starbucks drive through is always two blocks long.


Funny enough when you're poor with no savings and no education on financial matters and you're barely keeping your head above water, or slowly sinking, objectively stupid ideas make sense. Being poor makes the thought process "My money is just going to disappear, might as well spend it on something that makes me happy" make sense. You might as well buy those smokes, or that booze, or this coffee, you're not going to get ahead anyway, might as well be a little less miserable until you die.
 
2020-06-04 11:17:39 AM  

AngryDragon: Yet the line at every Starbucks drive through is always two blocks long.


Yeah seriously.  What's up with that?
 
2020-06-04 11:25:26 AM  

AngryDragon: Yet the line at every Starbucks drive through is always two blocks long.


Starbucks is busy sometimes, so there is no poverty.

Makes sense.
 
2020-06-04 12:06:57 PM  
every economic crisis that's come along in at least the last 20 years has proven that an astoundingly higher percentage of businesses have no emergency savings at all either.

and somehow, these articles are always about the little people.
 
2020-06-04 12:14:04 PM  

rightClick: every economic crisis that's come along in at least the last 20 years has proven that an astoundingly higher percentage of businesses have no emergency savings at all either.

and somehow, these articles are always about the little people.


Look, the government is going to take care of one of those groups, so you don't need to worry about it very much when you're working out your savings plan.
 
2020-06-04 12:16:26 PM  

rightClick: every economic crisis that's come along in at least the last 20 years has proven that an astoundingly higher percentage of businesses have no emergency savings at all either.

and somehow, these articles are always about the little people.


If you don't spend your entire budget this quarter then you won't get a bail out next quarter.
 
2020-06-04 12:24:02 PM  
Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.
 
2020-06-04 12:31:57 PM  

Jormungandr: AngryDragon: Yet the line at every Starbucks drive through is always two blocks long.

Funny enough when you're poor with no savings and no education on financial matters and you're barely keeping your head above water, or slowly sinking, objectively stupid ideas make sense. Being poor makes the thought process "My money is just going to disappear, might as well spend it on something that makes me happy" make sense. You might as well buy those smokes, or that booze, or this coffee, you're not going to get ahead anyway, might as well be a little less miserable until you die.


It's almost like the liberal leaning educational system is failing their students.  There is no reason why personal financial management isn't regular curriculum in every school system.
 
2020-06-04 12:39:51 PM  

madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.


Congrats on being well off. Now try doing that working 2 minimum wage jobs.
 
2020-06-04 12:52:31 PM  

Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.


Only 2.3% of workers make minimum wage
 
2020-06-04 12:55:51 PM  

TheGreatGazoo: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

Only 2.3% of workers make minimum wage


I don't know how they are compiling that statistic, but I'm calling bullshiat on it.

I wonder if they've excluded everyone making a few cents above federal minimum.
 
2020-06-04 12:58:06 PM  

Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.


I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)
 
2020-06-04 1:02:53 PM  

madgonad: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)


I think most Americans would love the opportunity to leave a large balance in their checking account.

Your personal experience of being reasonably well off and financially secure does not mean that there aren't a vast amount of people in America living paycheck to paycheck.

But seemingly you don't want to acknowledge that.
 
2020-06-04 1:12:29 PM  

Gubbo: madgonad: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)

I think most Americans would love the opportunity to leave a large balance in their checking account.

Your personal experience of being reasonably well off and financially secure does not mean that there aren't a vast amount of people in America living paycheck to paycheck.

But seemingly you don't want to acknowledge that.


No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.
 
2020-06-04 1:15:03 PM  

madgonad: No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.


Yes. People choosing to be poor...

And your example of people living paycheck to paycheck was the middle class. Talk about privilege.
 
2020-06-04 1:16:16 PM  

madgonad: Gubbo: madgonad: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)

I think most Americans would love the opportunity to leave a large balance in their checking account.

Your personal experience of being reasonably well off and financially secure does not mean that there aren't a vast amount of people in America living paycheck to paycheck.

But seemingly you don't want to acknowledge that.

No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion th ...


Ironically, if those people stopped making poor choices and instead saved all of their money the economy would collapse.
 
2020-06-04 1:18:30 PM  

madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.


Not completely true.

You can withdraw contributions from a Roth IRA any time tax & penalty free. So any money you have contributed can come out any time as you already paid taxes on it when you earned it. No strings attached.

It's when you withdraw earnings from your Roth IRA are you taxed or penalized.

As a simplified example, say you open a ROTH IRA on March 1, 2020 with $500. Come May 17th your car breaks down. Your Roth IRA account is worth $625 because of dividends paid and the value of the stocks/ETF's/mutual funds increased. You can withdraw $500 tax and penalty free because that was your contribution. The remaining $125 in the account are earnings and are taxed and penalized if you withdraw those.

So for me, I put money for "savings" in my Roth IRA. It increases in value (hopefully) while it sits there and is available any time. If I do have to make a withdraw, I can take out what I have put in and the account still has the money it's earned and it will continue to earn.
 
2020-06-04 1:25:19 PM  

CaptSS: You can withdraw contributions from a Roth IRA any time tax & penalty free. So any money you have contributed can come out any time as you already paid taxes on it when you earned it. No strings attached.

It's when you withdraw earnings from your Roth IRA are you taxed or penalized.

As a simplified example, say you open a ROTH IRA on March 1, 2020 with $500. Come May 17th your car breaks down. Your Roth IRA account is worth $625 because of dividends paid and the value of the stocks/ETF's/mutual funds increased. You can withdraw $500 tax and penalty free because that was your contribution. The remaining $125 in the account are earnings and are taxed and penalized if you withdraw those.

So for me, I put money for "savings" in my Roth IRA. It increases in value (hopefully) while it sits there and is available any time. If I do have to make a withdraw, I can take out what I have put in and the account still has the money it's earned and it will continue to earn.


Yes, and the rules are different from each type of investment. Also, Roths can only be used for short term withdrawals. I haven't done it, but I suspect moving the money may have fees as well (depending on institution). Roths are DDAs. They aren't designed for bidirectional flows.
 
2020-06-04 1:26:32 PM  

mcreadyblue: Ironically, if those people stopped making poor choices and instead saved all of their money the economy would collapse.


Not collapse, but it would grow slower. While spending would be down there would be more deposits available for lending.
 
2020-06-04 1:27:56 PM  

Gubbo: madgonad: No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.

Yes. People choosing to be poor...

And your example of people living paycheck to paycheck was the middle class. Talk about privilege.


You have been here for 13 years paying $5 a month for Total Fark. That's $780. If you had saved/invested it the value now would be $1,333. That's just for that $5 a month.

Imagine if you had another $5 a month subscription as well. Or that daily soda/coffee. It adds up and compounding is your friend.

When there is a will there is a way.
 
2020-06-04 1:33:11 PM  

CaptSS: Gubbo: madgonad: No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.

Yes. People choosing to be poor...

And your example of people living paycheck to paycheck was the middle class. Talk about privilege.

You have been here for 13 years paying $5 a month for Total Fark. That's $780. If you had saved/invested it the value now would be $1,333. That's just for that $5 a month.

Imagine if you had another $5 a month subscription as well. Or that daily soda/coffee. It adds up and compounding is your friend.

When there is a will there is a way.


780 -> 1,333

What interest rate did you use on that? And what discount rate did you apply to take into account the time value of money?
 
2020-06-04 1:37:56 PM  
How are people who are living paycheck to paycheck supposed to save any money?

How are people earning just above minimum wage expected to live, let alone pay bills or save money?

If you tell me they just need to get better jobs, then I curse you to lose your eyes the way you've already lost your sight.  I curse your dead heart.
 
2020-06-04 1:38:22 PM  
Nearly 70% living paycheck to paycheck last I looked, and that's... fark if I know, really, but it's definitely going to be different between the mass-unemployment and the augmented unemployment benefits for those who can get their applications through.

Either way, whatever it is, something is gonna happen if this keeps up.
 
2020-06-04 1:39:53 PM  

madgonad: CaptSS: You can withdraw contributions from a Roth IRA any time tax & penalty free. So any money you have contributed can come out any time as you already paid taxes on it when you earned it. No strings attached.

It's when you withdraw earnings from your Roth IRA are you taxed or penalized.

As a simplified example, say you open a ROTH IRA on March 1, 2020 with $500. Come May 17th your car breaks down. Your Roth IRA account is worth $625 because of dividends paid and the value of the stocks/ETF's/mutual funds increased. You can withdraw $500 tax and penalty free because that was your contribution. The remaining $125 in the account are earnings and are taxed and penalized if you withdraw those.

So for me, I put money for "savings" in my Roth IRA. It increases in value (hopefully) while it sits there and is available any time. If I do have to make a withdraw, I can take out what I have put in and the account still has the money it's earned and it will continue to earn.

Yes, and the rules are different from each type of investment. Also, Roths can only be used for short term withdrawals. I haven't done it, but I suspect moving the money may have fees as well (depending on institution). Roths are DDAs. They aren't designed for bidirectional flows.


There are no rules to withdrawing contributions from a Roth IRA. You can withdraw contributions at any time, for any reason, with no tax or penalty. You've already paid taxes, and the IRS considers it your money.

Your broker may charge a fee or have their own rules, but the IRS says contributions can been withdrawn at any age, any time, any reason, no reason because it is your money and it was already taxed. Don't have to pay back contributions.

I understand a Roth IRA isn't designed to be a passbook savings account. But I would rather park my money there and get a better return than putting it in a bank or credit union and earning 1.5% interest. And if an emergency comes up I can withdraw contributions from the Roth as easy as I can from a bank.
 
2020-06-04 1:42:04 PM  

madgonad: mcreadyblue: Ironically, if those people stopped making poor choices and instead saved all of their money the economy would collapse.

Not collapse, but it would grow slower. While spending would be down there would be more deposits available for lending.


But nobody would be borrowing.  It's not like the rich borrow money to buy that 3rd Banksy at the Sotherby's auction.
 
2020-06-04 1:49:26 PM  

Gubbo: CaptSS: Gubbo: madgonad: No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.

Yes. People choosing to be poor...

And your example of people living paycheck to paycheck was the middle class. Talk about privilege.

You have been here for 13 years paying $5 a month for Total Fark. That's $780. If you had saved/invested it the value now would be $1,333. That's just for that $5 a month.

Imagine if you had another $5 a month subscription as well. Or that daily soda/coffee. It adds up and compounding is your friend.

When there is a will there is a way.

780 -> 1,333

What interest rate did you use on that? And what discount rate did you apply to take into account the time value of money?


8.5 % although the historical average of the stock market is around 10%.
 
2020-06-04 1:54:11 PM  

CaptSS: Gubbo: CaptSS: Gubbo: madgonad: No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion that their annual income barely qualifies them for. They buy all the latest fashions and you better believe that everyone in the family gets a new iPhone at least every other year. They shuffle credit card debt from one low interest offer to the next. The median (not mean) household income in the US is around $60k. While I agree that life is hard for the working poor, but the middle class is making bad choices which result in living paycheck to paycheck.

Yes. People choosing to be poor...

And your example of people living paycheck to paycheck was the middle class. Talk about privilege.

You have been here for 13 years paying $5 a month for Total Fark. That's $780. If you had saved/invested it the value now would be $1,333. That's just for that $5 a month.

Imagine if you had another $5 a month subscription as well. Or that daily soda/coffee. It adds up and compounding is your friend.

When there is a will there is a way.

780 -> 1,333

What interest rate did you use on that? And what discount rate did you apply to take into account the time value of money?

8.5 % although the historical average of the stock market is around 10%.


And the fact that there is inflation as well? What about the utility value of that $5 every month. You've taken something that is very complicated and decided that, fark it, the number would be bigger.

You can't say if the number would be worth more, if it would have more or less purchasing power. You've also just assumed that it has been perfectly invested.

Anyway, all that to say that you've taken a very simplistic approach to life, money and happiness there.
 
2020-06-04 2:13:56 PM  

SirEattonHogg: AngryDragon: Yet the line at every Starbucks drive through is always two blocks long.

Yeah seriously.  What's up with that?


Cars are big.
 
2020-06-04 2:18:59 PM  

madgonad: Gubbo: madgonad: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)

I think most Americans would love the opportunity to leave a large balance in their checking account.

Your personal experience of being reasonably well off and financially secure does not mean that there aren't a vast amount of people in America living paycheck to paycheck.

But seemingly you don't want to acknowledge that.

No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a McMansion th ...


Beginning to think some people would rather biatch and moan about their situation rather than do something about it.
 
2020-06-04 2:37:27 PM  

CaptSS: madgonad: Gubbo: madgonad: Gubbo: madgonad: Personal finance is really more complicated than that.

As much as I hate the man, I learned a lot from Dave Ramsey in how to manage my personal finances. I do try to keep a couple months worth of spending in checking, but preparedness is more than that. I have a HELOC on my home and if I really needed money I could pull $60k out of it. If things are really bad I could borrow against my 401(k). So a family's ability to tap other sources of funds is varied. Heck, I'm not even counting asking family or friends for help. I don't think these surveys can ever be individualized enough to accurately measure a household's preparation.

The answer is better retirement savings structures designed to also serve as an emergency fund. Leaving a lot of money in checking is not good financial advice. Money in 401(k), IRA, and pension plans all have byzantine rules and possible penalties deterring people from accessing those assets.

Congrats on being well off. Now try doing that working 2 minimum wage jobs.

I had the HELOC and 401(k) back when I made a third of what I do now. My point is that more Americans have easily accessed resources that aren't as simple as their checking account balance. It is actually dangerous to 'leave' a big balance in checking. It encourages unwise major purchases because the money is right there. (see tax-refund season and the number of giant TVs, cars, and boats purchased with those checks)

I think most Americans would love the opportunity to leave a large balance in their checking account.

Your personal experience of being reasonably well off and financially secure does not mean that there aren't a vast amount of people in America living paycheck to paycheck.

But seemingly you don't want to acknowledge that.

No, what I am saying is that many people do that as a choice.

A huge chunk of the middle class lives paycheck to paycheck because they CHOOSE to buy that $45k pickup or $55k SUV. They live in a Mc ...


Yeah. Why don't poor people just borrow money off their parents. Or sell some of their shares.
 
2020-06-04 2:45:32 PM  
There are a lot of people, especially people of color, that have a hard time trusting any institution
with their money...They have been scammed and taken advantage of by these institutions
to the point that it's not even considered. Fees and surcharges and minimums and and suddenly
it's gone. And all of it done, "legally".  Can you blame people that get burnt by the system, not wanting
to go back? Even if the system, "pinky swears" that won't happen anymore...Then you have a-holes
like Wells-Fargo and BOA screwing their customers in the news AGAIN...

Then you add in, what is, an incredibly complex and byzantine system of rules and markets and
tax laws.."Ain't nobody got time for that.." .. Even as a college educated person, it's mind boggling to
me how arcane and overly complex this all is...
 
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