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 256 More: PSA, Oregon Trail
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26451 clicks; posted to Main » on 01 Oct 2012 at 3:01 AM (5 years ago)   |   Favorite    |   share:    more»

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The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

sidcart42: P.S. From the article:

"If a wagon train averages 10 miles a day for the first half of the Oregon Trail, how fast does it have to travel the second half to average 20 miles a day for the entire journey?"

The knee-jerk response is, naturally, 30 miles a day. But, as you might imagine, that wouldn't be worth writing about and isn't even close to correct. The blog continues:

"If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days. But if you averaged 10 miles a day traveling the first 1,000 miles, you would have already used up 100 days. You would then have to travel the second thousand miles instantly to overcome your slow start."

That might be apparent to a mathematician.

My knee-jerk response was that the problem presented had none of the information necessary to answer it. Something I'd imagine would be as apparent to a mathematician as some random blogger.

//not sure if serious

sidcart42: P.S. From the article:

"If a wagon train averages 10 miles a day for the first half of the Oregon Trail, how fast does it have to travel the second half to average 20 miles a day for the entire journey?"

The knee-jerk response is, naturally, 30 miles a day. But, as you might imagine, that wouldn't be worth writing about and isn't even close to correct. The blog continues:

"If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days. But if you averaged 10 miles a day traveling the first 1,000 miles, you would have already used up 100 days. You would then have to travel the second thousand miles instantly to overcome your slow start."

That might be apparent to a mathematician.

My knee-jerk response was that the problem presented had none of the information necessary to answer it. Something I'd imagine would be as apparent to a mathematician as some random blogger.

If you spend If you want to average some velocity, but you travel at half that speed for half the trail, you will have consumed your total time. Velocity is Distance over Time If your target velocity is X/Y but you travel at 0.5 of X/ Y for 0.5 Y you take X time. A modestly intelligent 7th grader should be able to answer that.

Krieghund: This is from the Forbes article linked to in TFA:

Here are the guideposts:

At age 35, you should have saved an amount equal to your annual salary.
At age 45, you should have saved three times your annual salary.
At 55, you should have five times your salary.
When you retire at age 67, you should have eight times your annual pay.

I'm supposed to have something like 250k saved in the next five years?
Oh, man. I am so screwed.
I guess it's a good thing my body is starting to give me the big 'fark you'. I'll hand what I have saved to a hospital and be dead by 60.

shower_in_my_socks: The "1 in 3" Americans relying on the lottery as their best bet at retirement stat never ceases to amaze me, even though your odds of winning a big lottery jackpot are statistically ZERO.

No, the odds are 50/50. You either win or you don't.

ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

Being born rich or having a wealthy relative that'll set you up are things outside of your control. Developing a skillset with higher earning potential is, for the most part, within your control.

xl5150: Came to see a bunch of sniveling, whining, and excuses about why all of your financial instability is everyone else's fault but your own.

Leaving satisfied.

/I could have sworn I read an article recently about a schoolteacher who made herself a millionaire on her own
//oh yeah, that was here
///but wait, that's IMPOSSIBLE!
////exactly why people like you will always, always work for people like me

Let the people working for you know how little you think of them and let's see what happens to you.

WMittensRomney: Wouldn't it be easier to just give people a deadline for offing themselves?

RENEW!!!! RENEW!!!

doglover: Ambivalence: This demonstrates everything that is wrong with rhetorical economists (especially Randians). less than 10% of the population makes "\$100,000 after taxes". And far far more than half do not make enough that they can afford to sock away half for retirement.

It grossly oversimplifies a process that has no basis in reality. It's all pie in the sky bullshiat that doesn't help anyone.

Well, it helps people making over \$100,000 after taxes. I mean, if I had 100k after taxes, I'd be able to put half of it in the bank, burn half the remainder on entertainment, and STILL be able to float my current lifestyle with more than a quarter left over to buy diamonds and shiat.

and create jobs. don't forget to create jobs.

Crudbucket: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

Being born rich or having a wealthy relative that'll set you up are things outside of your control. Developing a skillset with higher earning potential is, for the most part, within your control.

I would argue that it's really not. If you don't have the money to go to school, or a current job that demands enough time that you're unable to to to school, or some sort of home situation (sick relative, special needs family member...) that prevents you from having said time or money, it's not really in your control at all.

That's the situation people are finding themselves in. Stuck in their station in life, unable to advance because the job they have to sustain themselves doesn't pay enough nor give enough leeway to allow it.

itsdan: "Saving 100% of your lifestyle sounds impossible, but it is not. If you earn \$100,000 after taxes, you must limit your lifestyle to \$50,000 and save the remainder. This strategy will allow you to retire at age 65 with a lifestyle of \$50,000."

And if you make \$50,000 or less to begin with, as most people do?

You should have thought of that before you...hm, can't really say.

JackalRabbit: doglover: Ambivalence: This demonstrates everything that is wrong with rhetorical economists (especially Randians). less than 10% of the population makes "\$100,000 after taxes". And far far more than half do not make enough that they can afford to sock away half for retirement.

It grossly oversimplifies a process that has no basis in reality. It's all pie in the sky bullshiat that doesn't help anyone.

Well, it helps people making over \$100,000 after taxes. I mean, if I had 100k after taxes, I'd be able to put half of it in the bank, burn half the remainder on entertainment, and STILL be able to float my current lifestyle with more than a quarter left over to buy diamonds and shiat.

and create jobs. don't forget to create jobs.

ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

There's actually a really easy step to take - cohabitate. During my first job, I made about 30,000 after taxes. I found a large townhouse, and went on Craigslist to find roommates. When you split your rent 2 or 3 ways, it's amazing how much extra money you end up having lying around at the end of each month. I managed to pay off my car in 1 year, and still save a few thousand dollars out of an already small income. If you have a family, you'll have to go with something bigger, probably a 4-5 bedroom single family home, and you'll have to look for roommates that are OK with that (might look at other families in similar circumstances), but it's worth the trouble.

Cohabitating isn't glamorous, but it saves you SO MUCH MONEY. My roommate and I now both are looking at 6 figures a year, and we have no intention to get our own places. We also have no intention of changing our lifestyles simply because we can afford it. Just because you have money, doesn't mean you have to spend it. If I live the same lifestyle at 6 figures as I did at 5 figures, I can save huge amounts per year. Suck up your pride, restrain your urge to be a typical American and spend on things you don't need, and save oodles of money.

If it helps motivate you, imaging retiring early. That's my goal...early retirement. Keeps my willpower strong.

gravebayne2: ive saved nothing. figure i'll be dead or in jail by retirement.

browntimmy: Let the people working for you know how little you think of them and let's see what happens to you.

Oooooh, what are they going to do? Quit and look elsewhere for a \$7-an-hour job? When your job can also be done by a monkey, you don't get the luxury of dignity. You have to take what you can get because you're unskilled.

I mentioned on a thread recently that I'd fired my personal assistant. It happened on Labor Day, so the irony makes it stick out in my mind. He asked me for a raise so I fired him. Within a few days I had a new personal assistant who is just as good as the old guy and I'm paying him \$50 less a week. That's just how it works when there are a lot of other people out there who can do your job as well as you can and they're willing to do it for less money. I think I did a good job of letting the people working for me know how I feel there, and you can see how it worked out for me--I have an additional \$50 in my pocket each week. Not too shabby.

I know you unskilled workers always look toward that scene in Fight Club where the unskilled workers give the big speech to the upper-class guy about how they do all the dirty work and how he shouldn't mess with them. Well, guess what--that's a movie. We live in the real world, and in real life, when there are many more people able and willing to do the exact unskilled job that you're performing, then you don't get to biatch about it because it's easy to replace you.

well...

JackalRabbit: gravebayne2: ive saved nothing. figure i'll be dead or in jail by retirement.

Bang as many women as you can. don't bother with condoms. the more babies they pop out, the more proof you got laid.

Oh money? don't bother. when you're homeless and millions behind on child support, just tell those rich snooty folk "yeah. i hit that. and her sister. and her mom." Their money can't buy that kind of fun.

And then suddenly it was a troll thread.

Shadowknight: Crudbucket: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

Being born rich or having a wealthy relative that'll set you up are things outside of your control. Developing a skillset with higher earning potential is, for the most part, within your control.

I would argue that it's really not. If you don't have the money to go to school, or a current job that demands enough time that you're unable to to to school, or some sort of home situation (sick relative, special needs family member...) that prevents you from having said time or money, it's not really in your control at all.

That's the situation people are finding themselves in. Stuck in their station in life, unable to advance because the job they have to sustain themselves doesn't pay enough nor give enough leeway to allow it.

Some people may legitimately be trapped in their situation, but I don't think that's a sizeable portion of the population. The bigger group is people who either aren't aware of all the options open to them or are unwilling to make the temporary lifestyle changes needed to advance themselves. I have a friend from my Army days who is the same age as me, has the exact same training and certification as me, does the exact same work as me, and makes \$70,000 less than me because he decided to re-enlist instead of getting out and becoming a contractor. I'm not suggesting that everyone has that same opportunity, just that they get a type of tunnel vision or are too busy "keeping up with the Joneses" to consider all their options.

Write a book about how writing a book can make you millions and sell it to people who believe they can learn to become millionaires by reading a book by somebody who claims to have become a millionaire by writing a simple book about how to become a millionaire.

Works every time.

\bonus. It doesn't matter what you write because the type of people who buy such books don't actually read them.

J Noble Daggett: Write a book about how writing a book can make you millions and sell it to people who believe they can learn to become millionaires by reading a book by somebody who claims to have become a millionaire by writing a simple book about how to become a millionaire.

Works every time.

\bonus. It doesn't matter what you write because the type of people who buy such books don't actually read them.

are you ridiculing my coffee table?

Crudbucket: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

Being born rich or having a wealthy relative that'll set you up are things outside of your control. Developing a skillset with higher earning potential is, for the most part, within your control.

Itsdan's question was related to how the advice in the article doesn't fit people who make \$50,000 or less a year. Itsdan asked about how the advice could be tailored to fit that very large group of people.

xl5150's advice, to me, was not only negative but counterproductive. xl5150's advice, at its heart, said that those who make under \$50,000 should not be expected to be able to save. xl5150's advice said that there is no hope, and that the only way to save is to make more money before you can be in a position to save.

Is that truly the right advice, though? To tell someone that they have to be in a position where they have disposable income, and things are not so tight, before they can hope to save or be expected to save? That's what I mean by advising someone to have a rich uncle or a dead relative. That is not advice for the hear and now.

The true value of saving comes in being able to apply the concept and discipline of saving regardless of what income level you are at. Articles like the one above have been around for years and they are not meant for the average person. They are meant for the person who already has disposable income. The stock market is a game, after all. At the end of the day, especially with speculating, it's a leisure activity. It can even be looked upon as a type of lottery. It is a game of chance. It's one with better odds than Mega Millions, but given how it's really used it's no worse (or better) than Catholic Bingo Night or old school Numbers or Lemonade Stand.

By that I mean, being a stockholder who has an interest in a company because of how much money it can bring in to you is different from being a stockholder because you have an interest in a company's products/services. But it's mostly played for the former, not the latter. It's a game.

Back to what I was saying, more articles for persons with less disposable income getting into the saving game.

Unless the lesson of Bush's rebates holds true at the heart of articles like this: somebody has to spend, spend, spend. Somebody has to be encouraged to spend, spend, spend. Who is that group of people going to be?

J Noble Daggett: Write a book about how writing a book can make you millions and sell it to people who believe they can learn to become millionaires by reading a book by somebody who claims to have become a millionaire by writing a simple book about how to become a millionaire.

Works every time.

\bonus. It doesn't matter what you write because the type of people who buy such books don't actually read them.

And apparently they buy a shiatload of them. I think the average repurchase for self-help books on any given topic is like 18 per buyer.

All money is good for in an emergency is something to help start a fire, and that's assuming you aren't just carrying your debit card.

I think there is a real definable problem with creating a currency that is so devoid of actual real world value it can be used to define the value of anything. It has become the single most obvious goal in the quest for success for almost all of humanity and yet at it's core it is nothing. Money also allows for negative values, debts, burdens that anyone with a student loan or large credit card bill can understand are financially life crushing.

Trading real world materials and skills for money reminds me of trading money for tokens at the arcade, if you've bought a ton of tokens you better hope the arcade stays in business long enough for you to spend them.

So what you're saying is that the average person is farked and the future consists of the majority of the population being incapable of retiring?

200 million homeless people in their late 60's wandering around because they didn't save a years worth of their current salary by the time they were 35?

I want to make a lot of money so I can write a column about how no one else did it right because they didn't invest in some other company. That will motivate people. That will really drive people into understanding what they value or even the concept of it.

sidcart42: My knee-jerk response was that the problem presented had none of the information necessary to answer it.

You just proved the author's point.

Emposter: Cohabitating isn't glamorous, but it saves you SO MUCH MONEY.

ExperianScaresCthulhu: xl5150's advice, to me, was not only negative but counterproductive. xl5150's advice, at its heart, said that those who make under \$50,000 should not be expected to be able to save. xl5150's advice said that there is no hope, and that the only way to save is to make more money before you can be in a position to save.

Is that truly the right advice, though? To tell someone that they have to be in a position where they have disposable income, and things are not so tight, before they can hope to save or be expected to save? That's what I mean by advising someone to have a rich uncle or a dead relative. That is not advice for the hear and now.

You can either make more money or spend less. For people in the (let's say) \$30,000+ income range, there are probably a few things you can do to cut your spending and put the money into savings instead. That'll differ for each individual's situation.

If you're making less than that, you're probably barely getting by as is. Your budget is down to the bone already, there's not going to be anything you can cut in favor of savings. You might be getting by day-to-day, but you can't easily build a future off that. In that situation, you've gotta find some way to expand your skillset or get into a position to make more money. Or rely on welfare.

Crudbucket: Shadowknight: Crudbucket: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

Being born rich or having a wealthy relative that'll set you up are things outside of your control. Developing a skillset with higher earning potential is, for the most part, within your control.

I would argue that it's really not. If you don't have the money to go to school, or a current job that demands enough time that you're unable to to to school, or some sort of home situation (sick relative, special needs family member...) that prevents you from having said time or money, it's not really in your control at all.

That's the situation people are finding themselves in. Stuck in their station in life, unable to advance because the job they have to sustain themselves doesn't pay enough nor give enough leeway to allow it.

Some people may legitimately be trapped in their situation, but I don't think that's a sizeable portion of the population. The bigger group is people who either aren't aware of all the options open to them or are unwilling to make the temporary lifestyle changes needed to advance themselves. I have a friend from my Army days who is the same age as me, has the exact same training and certification as me, does the exact same work as me, and makes \$70,000 less than me because he decided to re-enlist instead of getting out and becoming a contractor. I'm not suggesting that everyone has that same opportunity, just that they get a type of tunnel vision or are too busy "keeping up w ...

And all itsdan was asking was that those options be opened up and revealed.
'Make more money' is cynical advice.
A person making \$50,000 needs advice tailored to their situation.
They can not apply the advice given to someone making \$100,000.

The same goes double for someone making \$25,000 a year.
The same is critical for someone at the poverty line.

As for your friend in the military................ people who have military experience under their belt
are a whole different continent away from the advice which can be given to people
who do not have military experience under their belt............. likewise, people who get in and get out
need different advice than people who are in it as a career.

If your friend is making \$70,000 less than you, it's not really because of re-enlistment.

How many more business contacts and how much better at networking are you, than your friend?
Contracting is a word of mouth game, not a merit game.

My advice, marry rich. Not that I did. She does have a nice chunk of family money. It works out though because I'm currently working my ass off so she can get a Master's with a locked in employment path.

But I love her and I don't want to spend too much of her money, so I'm eating lots of Hot Pockets.

doglover: Emposter: Cohabitating isn't glamorous, but it saves you SO MUCH MONEY.

But when you have a good one, you need to take advantage of it.

To xl5150 and itdan, related to the above: Saw an article where a woman was badly in debt. She was able
to get out of that debt by devoting all of her income towards the debt without
accruing any additional debts. She was happy and feeling pretty proud of
herself that she didn't have to declare bankruptcy.

She was able to devote all that income because her husband paid for
- the mortgage
- the utilities
- her car

Saw another article where a woman was able to save all of her income
and pay cash for her dream home after several years of saving. Lot of back patting.
She was able to devote all that income to saving because

- she lived with her mother and had no mortgage or utility payments.

Saw a third article, a couple was in debt, and got out of it after several years by devoting the majority of their income to savings. They were able to do it because

- they found government jobs
- the article specifically mentioned native american programs they were able to take advantage of

None of these people got out of their situation because they followed xl5150s advice about developing new skillsets. They *did* get out of a hellhole because someone else provided a safety net for them, to allow them to pick themselves up on their own time. With discipline they were able to do it... but they were only allowed to develop that discipline because someone else picked up the slack temporarily.

People do get out of bad situations and can learn to save. They just have to be in a position to be able to save. That doesn't take a new skillset. It takes a safety net. Once you no longer need the safety net, you have (hopefully) learned saving skills which will last the rest of your life as you continue your discipline.

Emposter: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

There's actually a really easy step to take - cohabitate. During my first job, I made about 30,000 after taxes. I found a large townhouse, and went on Craigslist to find roommates. When you split your rent 2 or 3 ways, it's amazing how much extra money you end up having lying around at the end of each month. I managed to pay off my car in 1 year, and still save a few thousand dollars out of an already small income. If you have a family, you'll have to go with something bigger, probably a 4-5 bedroom single family home, and you'll have to look for roommates that are OK with that (might look at other families in similar circumstances), but it's worth the trouble.

Cohabitating isn't glamorous, but it saves you SO MUCH MONEY. My roommate and I now both are looking at 6 figures a year, and we have no intention to get our own places. We also have no intention of changing our lifestyles simply because we can afford it. Just because you have money, doesn't mean you have to spend it. If I live the same lifestyle at 6 figures as I did at 5 figures, I can save huge amounts per year. Suck up your pride, restrain your urge to be a typical American and spend on things you don't need, and save oodles of money.

If it helps motivate you, imaging retiring early. That's my goal...early retirement. Keeps my willpower strong.

Yah, let's not enjoy life and save money instead! Fark living with roommates, I need my space. I may not be saving OODLES of money, but at least I enjoy myself. As far as retiring early, why? As a teacher I get every summer off and by the time it's over I'm happy to go back to work. Work centers you more than anything else, especially if you actually enjoy doing it. Yes, for the most part I enjoy work. It sucks sometimes, but everything sucks sometimes.

ExperianScaresCthulhu: But when you have a good one, you need to take advantage of it.

When you have a good one.

Not every heroin addict is Jason Mewes.

Unless you have some kind of wonderful sexy job, nobody saves sh*t.

That's part of the problem with our society. We are by and large living day by day, paycheck to paycheck.

The big problem with all this type of advice is that the assumption is that at age 65 you're going to stop making a dime and start spending everything you had put away. It doesn't have to be this way. I plan on working and earning money indefinitely. You can run a small house-based business, write a book or teach English while on that 6-month vacation to Africa. Just do something productive. There's no rule that says you have to move to FLA, wear geezer clothes and hang around for the early bird special til the day you keel over.

Save 43.2% of my annual income. Riiiiiiiiiight!

Is this a joke, or a troll or something?

"...For those who start late, though, retirement security is an uphill climb. Here's Forbes' analysis of how a late start affects your required savings rate:

(MORE: The Mormon in Mitt)

Start at age 15, and you need to save 8% of annual income for life...."

What.

xl5150: Came to see a bunch of sniveling, whining, and excuses about why all of your financial instability is everyone else's fault but your own.

Leaving satisfied.

/I could have sworn I read an article recently about a schoolteacher who made herself a millionaire on her own
//oh yeah, that was here
///but wait, that's IMPOSSIBLE!
////exactly why people like you will always, always work for people like me

Weird. Maybe I was one of the comments that caused you so much pleasure? Cause I said I liked my job and am pretty happy even though I don't make a lot of money but I know one day it will bite me in the ass?

Did that comment make you feel better than me? Really? Did it? Cause it would interest me to see what sort of person would think like that. Certainly no one I'd want to be around but would like to study from a distance, like an insect. Please tell me more about yourself, fascinating creature.

I don't have a lot of adice on saving, but one thing I did learn (at a loss of \$30K) is do NOT just put your money in a 401k or IRA and expect some nucklehead to earn you money with it. Once they have your money, they don't give a good goddam. Harass the shiat out of them and keep an eye on what you have.

/scum
//all financial planners

Bigdogdaddy: I don't have a lot of adice on saving, but one thing I did learn (at a loss of \$30K) is do NOT just put your money in a 401k or IRA and expect some nucklehead to earn you money with it. Once they have your money, they don't give a good goddam. Harass the shiat out of them and keep an eye on what you have.

/scum
//all financial planners

sidcart42: P.S. From the article:

"If a wagon train averages 10 miles a day for the first half of the Oregon Trail, how fast does it have to travel the second half to average 20 miles a day for the entire journey?"

The knee-jerk response is, naturally, 30 miles a day. But, as you might imagine, that wouldn't be worth writing about and isn't even close to correct. The blog continues:

"If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days. But if you averaged 10 miles a day traveling the first 1,000 miles, you would have already used up 100 days. You would then have to travel the second thousand miles instantly to overcome your slow start."

That might be apparent to a mathematician.

My knee-jerk response was that the problem presented had none of the information necessary to answer it. Something I'd imagine would be as apparent to a mathematician as some random blogger.

also the statement "If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days" is entirely incorrect

averages ... How do they work?

xl5150: noneyourbase: I'm a grad student. I'd like to open a mutual fund, because the \$0.25 interest rate just isn't cutting it, frankly. What should I read? How do I start?

Do you already know which mutual fund(s) you'd like to invest in, or are you looking for a full-service brokerage that will provide you with financial advice?

I just want to look good naked.

Don't fall for that stock or mutual fund crap. Here is the voodoo they give you: "just keep handing us your money, and ONE DAY the magic of COMPOUND INTEREST will start happening!" Well, I've been saving for about twenty years and, added up, still have little more than what I put into it. Can't wait for my money to start doubling every 5 years, or whatever their so-called math promises.

Keep waiting for that compounding, all that'll happen is you take a pounding.

zepillin: sidcart42: P.S. From the article:

"If a wagon train averages 10 miles a day for the first half of the Oregon Trail, how fast does it have to travel the second half to average 20 miles a day for the entire journey?"
. . .

also the statement "If the trail is 2,000 miles long, to average 20 miles a day you would have to travel the entire trail in 100 days" is entirely incorrect

averages ... How do they work?

The statement is not incorrect. There is a convention at work that is well explained at the top.
Average for trip = total distance / total time

The Southern Dandy: Save 43.2% of my annual income. Riiiiiiiiiight!

Is this a joke, or a troll or something?

The assumptions behind that 43.2% are significant:
--you're 40 years old and haven't saved a dime yet
--you will retire at 67 and not earn another dime after that
--you will live on [~85% of your pre-retirement income] annually after retirement
--you will continue to live for 25 years after retirement
(--and a bunch of other assumptions about vehicles and rate of return and so on)

Articles like these just annoy me. So the guy sat down, banged out a couple of formulas in excel to and said "whoo hoo! I have all I need for my article deadline".

The only problem is that it's the most incredibly simplistic model possible. They admit as much in the article from the previous week that they link to.

Inevitably the biggest issue I have whenever I hear one of these "what you need to retire is to do 'x' " formulas is that some big Assumptions are being made which usually can't be true. Most of them are that things will stay constant over your lifetime - income growth year over year, contribution, investment returns, employer matching, etc.

I saw a good article some time ago, I think it was the columnist Scott Burns, that pointed out that the ultimate damage done by a downturn / disruption event like 2008 varies considerably based on when it happens to you in your working life and other factors like the time between such events. I.e. it can take a lot of time / good investments to recover from, and should it happen at the wrong time in your life, you're really going to hurt. And it's not just the stock market and investment returns. In most people's working lives there will be some periods of good times income-wise, some ok times, and a few big setbacks such as divorce, downsizing, illness, or some other situation where either the income isn't there to save and invest. Even if you get back on the savings track after a big disruption, it can take a years to get back on the original trajectory to those retirement targets. So really, what would be of more use is a prediction model that tries to account for the irregularities of life, and maybe show some sort of 'probability outcome ranges'

And don't get me started about their 5.5% annual return assumption, or what inflation and wage growth really are vs the govt numbers. I'm so glad to read that most farkers have been saving 20% since age 15, but most of the people I know aren't so luc... er.. smar.. er.. fortunate.

I'm not saying don't save... savings and living within your means will always always trump not doing so, and the more the better. I'm just saying that father away your retirement is, the less confidence there is that any remotely accurate prediction can be made of what your fiscal situation will be then.

And all that is not even considering any possible big external disruptive events like currency devaluation/ massive inflation/ significant tax changes/ retirement fund going under (CALPERs?)/ a Bernie Madoff at your investment house and so on.

Life's a gamble.. but it also occasionally gives you winning hands too.

Emposter: ExperianScaresCthulhu: xl5150: itsdan: And if you make \$50,000 or less to begin with, as most people do?

Then you should be working at making yourself more marketable so that you can develop a skillset in which you can charge more for your services.

That's all well and good. Like advising people to make sure they're born to parents who already have money and can give them a leg up and a head start. Or advising people to make sure they're in the will of a rich relative.

But in the meanwhile, what can people do to save in their current situation?

There's actually a really easy step to take - cohabitate. During my first job, I made about 30,000 after taxes. I found a large townhouse, and went on Craigslist to find roommates. When you split your rent 2 or 3 ways, it's amazing how much extra money you end up having lying around at the end of each month. I managed to pay off my car in 1 year, and still save a few thousand dollars out of an already small income. If you have a family, you'll have to go with something bigger, probably a 4-5 bedroom single family home, and you'll have to look for roommates that are OK with that (might look at other families in similar circumstances), but it's worth the trouble.

Cohabitating isn't glamorous, but it saves you SO MUCH MONEY. My roommate and I now both are looking at 6 figures a year, and we have no intention to get our own places. We also have no intention of changing our lifestyles simply because we can afford it. Just because you have money, doesn't mean you have to spend it. If I live the same lifestyle at 6 figures as I did at 5 figures, I can save huge amounts per year. Suck up your pride, restrain your urge to be a typical American and spend on things you don't need, and save oodles of money.

If it helps motivate you, imaging retiring early. That's my goal...early retirement. Keeps my willpower strong.

You are absolutely correct. The issue is that most people live at or above their means. Buying too expensive of clothes, cars, and houses. Either putting themselves in debt and paying interest which goes to the 'evil 1%' or never saving anything. Look back in the 1950s the average house was 1000 sq ft compared with 2,200 in 2000, and that is before all the luxuries people fill there homes with. I'd say at least half of the 99% literally hand money to the 1% in the form of interest and most of that is on stuff they don't need.

I don't have a roommate but I do OWN (no mortgage) a 1,200 sq ft home, I have an 18 month old phone, eat most of my meals at home (\$1.50 breakfast, \$1.50 lunch, \$5.00 dinner). Don't buy many luxuries with the exception of items of better quality and longer life, for example \$200 dress shoes vs \$50 bargain ones. In a normal month I'll net at least a 1/3 of my take home salary, not including the 5% of my pay that is direct to my 401K. If anything I live on less now than I did when I made half as much (eating out less and generally smarter in purchases).

I can basically only roll my eyes when someone who works for me making about 1/2 my income will buy a pair of iPhone 5s for his wife and him and then a Coach purse for her, meanwhile my boss who makes twice what I do will wait until he can get an iPhone on Craigslist for \$100 and wouldn't conceive of ever buying his wife anything in the realm of a Coach purse. Not everyone can afford luxuries and trying to live like someone on TV when you aren't making that kind of money puts you in debt which in reality allows you to buy less down the road.

Remember the good times in the 80's and 90's making 70% interest. Today with zero % interest by the Feds. Forget it, just plan on going to prison for your retirement.

Ambivalence: itsdan: "Saving 100% of your lifestyle sounds impossible, but it is not. If you earn \$100,000 after taxes, you must limit your lifestyle to \$50,000 and save the remainder. This strategy will allow you to retire at age 65 with a lifestyle of \$50,000."

And if you make \$50,000 or less to begin with, as most people do?

This demonstrates everything that is wrong with rhetorical economists (especially Randians). less than 10% of the population makes "\$100,000 after taxes". And far far more than half do not make enough that they can afford to sock away half for retirement.

It grossly oversimplifies a process that has no basis in reality. It's all pie in the sky bullshiat that doesn't help anyone.

Especially for people who don't understand the word example. The author was using 100k as a round number for simplification, but apparently not simple enough for you.

If you make 50k, chop the example numbers in half. You won't be retiring at a lifestyle level of 50k. Is that too obvious?

Here's the reality checks.
Do you have parents? You may wind up supporting them. More often than not, kids do, especially if you don't hail from a very wealthy family. If you have special reasons to hate them or are simply an ungrateful jerk, this does not apply.

Do you have kids? The cord is often not cut at 18, or 25. Things happen.
Corollary: Would you like to leave them something? Or do you plan to die broke like a posthumously famous artist?

Bottom line. If you view your current earnings as something to live off of, you're foolish. Horribly foolish.

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