4 ms·

I'm all for digging deeper, but I'm not convinced you're going to find a satisfying answer. I try not to hop on the boomer hate train too much, but it's hard t

I'm all for digging deeper, but I'm not convinced you're going to find a satisfying answer. I try not to hop on the boomer hate train too much, but it's hard to look at what they were handed and not be angry. In the 60s and 70s, a college degree in anything from a decent school was enough to land you meaningful employment. That degree cost less than a third of what it does today. A decent size house in a metropolitan area could be had in your late 20s with a single income. Upward mobility in the workforce was basically unlimited, and thanks to the population bulge, boomers also were able to enact pretty much whatever political policies they wanted as an aggregate group. Yes, Vietnam really sucked, and the S&L crash wasn't fun, either, but how hard would it really have been to set aside 5% of income every year instead of plowing it into ever bigger houses, more cars, vacations, etc.? I'll give you one thing - financial planning education in the US is absolutely awful and continues to fail millions of people every year. Without that, all you see is mass commercialization encouraging people to spend more money, and an ever increasing need to keep up with the Joneses.

VLM 11y ago
"set aside 5% of income every year" At a 1 in 20 rate, if you have a 20 year career like your grandparents (although 20 year careers at the same employer disappeared generations ago, so you absolutely will not..) and with basically zero to negative investment return after deflation and taxation, one year after downsizing and offshoring you'll be down to the same $0 that the folks who didn't save at 5%, or were unlucky enough to get the economic death penalty a year before you. Meanwhile this happened 0 to 25 years ago and they have maybe 0 to 25 more years to live. Saving would have been a suckers game. You're not going to make it, you'll just be poorer along the way till you reach inevitable utter poverty. Any medical condition affecting you, your spouse, or your child is a financial death penalty. All you need is you, your spouse, and kids, to avoid getting seriously ill or disabled for 40+ years. If anyone gets sick, all saving means in the long run is the hospital execs get your saved money before you go on the charity plan. You're not going to be spending money on around the world cruises or even a quiet middle class life; all that capital will be vacuumed up by the medical, real estate, legal/criminal, or educational sectors. Why should I save today to make some vampire fatter tomorrow? If I scrimp and save for my entire life, some hospital exec can buy a new Ferrari using my savings... whats in it for me? Surely I will not be permitted to actually keep or spend what I save. Another way to put it is everyone in your cohort will get the economic death penalty and get the downward class mobility thing... but at different times. Many are banking on the idea that if they're happy, well fed, possibly educated, and entertained, they'll somehow get the economic death penalty more than a year after someone who has a bad attitude such that they'll run a net lifetime profit by not saving. They're probably correct... the guy who golfs and shares pro sports tickets with his boss is always the last downsized, the person who smiles the most seems the last fired, etc. Saving money does not necessarily correlate with maximized net lifetime income.
ThomPete 11y ago
Every generation become a product of the previous one. Just because you as young often revolt against the older generations, doesn't mean you can see through all the hazy clouds that surrounds you. Historically there have been a lot of money poured into finding ways to convince people to long term thinking with short term gains. There are a reason why advertising quick loans and and credit cards have become popular. There is a reason why the US creditscore system forces you to take on debt to build you credit score (just think about how absurd that notion is) and there is a reason why people growing up in an environment where this is the norm become bad at saving up. It's systemic and it's done by the previous generations and not simply because the young generations are stupider or more careless. You seem to believe that people in general rationalize far mor than they actually do. We are humans not rational machines.
- ethbro 11y ago
  > There is a reason why the US creditscore system forces you to take on debt to build you credit score (just think about how absurd that notion is) To be clear, the US credit score system forces you to take on credit limits, not actual debt.
  - ThomPete 11y ago
    It forces you to use your credit card in order to build a credit score. In fact in the beginning I had to sponsor my own credit line of which I paid interest. So yeah I would say pretty much forces you to take on debt even if it's only for a little while.
    - ethbro 11y ago
      You'd be surprised at the number of credit card companies that are perfectly willing to keep a card (and its associated credit limit) open with no activity. But granted, if for some reason the system scores you as not-auto-grant on the initial card application (in which case I have no idea what they base it on), then you might have to go with a fee secured in order to jump start the limit climb.
cm2012 11y ago
Just want to say - if someone set aside 5% of their income every year for 30 years, with a median national family income of $50,000, and assuming 5% after inflation gains, they would only have $125,000 saved after 30 years - only 2-4 years worth of living.
AnthonyMouse 11y ago
> I'll give you one thing - financial planning education in the US is absolutely awful and continues to fail millions of people every year. It's not just financial planning education -- it's financial planning policy. Almost every policy we have is described as progressive, but isn't, and acts to discourage saving. We have a graduated income tax. Where do the brackets start? ~$9000. That'll teach those fat cats making $15,000/year. And Richie Rich over there making over ~$37,000 will have to pay even more again -- even though the minimum wage fat cats were already paying the same marginal rate as investment bankers pay on capital gains. And the investment bankers don't pay into social security but you pay the full rate starting from dollar zero. Which money you won't get back unless you live long enough, can't dip into for emergencies (so emergencies get paid with high interest debt rather than reduced savings), and statistically will pay out less than investing the same money in an index fund. But that's not the half of it. The thing that really gets you is all the programs designed to "help" you. If these programs were unconditional (i.e. not tied to income/savings) then they might actually do this, but they aren't. And the thresholds are low. So two things happen. First you want to send your kids to college. Did you have some money saved up? We'll take that right out of your financial aid package thankyouverymuch, that'll teach you to save money. Same thing if you have to change careers and go back to school yourself. Then you realize that the amount of money you're making isn't going to cut it and look around for ways to make more -- which is where you get hit by the train. They call it progressive because people who make more money are supposed to pay more. But they never bother to tell you "more money than what" -- and the number is less than minimum wage. You work part time stocking shelves at the Walmart and you get government subsidies for food, housing, healthcare, etc. You bust your hump going to night school for three years so you can get a $38,000/year job as assistant to the regional manager and the subsidies evaporate... leaving you pretty much back where you started, only now you have student loans. But try to save something for retirement, would you?

VLM 11y ago

"set aside 5% of income every year" At a 1 in 20 rate, if you have a 20 year career like your grandparents (although 20 year careers at the same employer disappeared generations ago, so you absolutely will not..) and with basically zero to negative investment return after deflation and taxation, one year after downsizing and offshoring you'll be down to the same $0 that the folks who didn't save at 5%, or were unlucky enough to get the economic death penalty a year before you. Meanwhile this happened 0 to 25 years ago and they have maybe 0 to 25 more years to live. Saving would have been a suckers game. You're not going to make it, you'll just be poorer along the way till you reach inevitable utter poverty. Any medical condition affecting you, your spouse, or your child is a financial death penalty. All you need is you, your spouse, and kids, to avoid getting seriously ill or disabled for 40+ years. If anyone gets sick, all saving means in the long run is the hospital execs get your saved money before you go on the charity plan. You're not going to be spending money on around the world cruises or even a quiet middle class life; all that capital will be vacuumed up by the medical, real estate, legal/criminal, or educational sectors. Why should I save today to make some vampire fatter tomorrow? If I scrimp and save for my entire life, some hospital exec can buy a new Ferrari using my savings... whats in it for me? Surely I will not be permitted to actually keep or spend what I save. Another way to put it is everyone in your cohort will get the economic death penalty and get the downward class mobility thing... but at different times. Many are banking on the idea that if they're happy, well fed, possibly educated, and entertained, they'll somehow get the economic death penalty more than a year after someone who has a bad attitude such that they'll run a net lifetime profit by not saving. They're probably correct... the guy who golfs and shares pro sports tickets with his boss is always the last downsized, the person who smiles the most seems the last fired, etc. Saving money does not necessarily correlate with maximized net lifetime income.

ThomPete 11y ago

Every generation become a product of the previous one. Just because you as young often revolt against the older generations, doesn't mean you can see through all the hazy clouds that surrounds you. Historically there have been a lot of money poured into finding ways to convince people to long term thinking with short term gains. There are a reason why advertising quick loans and and credit cards have become popular. There is a reason why the US creditscore system forces you to take on debt to build you credit score (just think about how absurd that notion is) and there is a reason why people growing up in an environment where this is the norm become bad at saving up. It's systemic and it's done by the previous generations and not simply because the young generations are stupider or more careless. You seem to believe that people in general rationalize far mor than they actually do. We are humans not rational machines.

ethbro 11y ago
> There is a reason why the US creditscore system forces you to take on debt to build you credit score (just think about how absurd that notion is) To be clear, the US credit score system forces you to take on credit limits, not actual debt.
- ThomPete 11y ago
  It forces you to use your credit card in order to build a credit score. In fact in the beginning I had to sponsor my own credit line of which I paid interest. So yeah I would say pretty much forces you to take on debt even if it's only for a little while.
  - ethbro 11y ago
    You'd be surprised at the number of credit card companies that are perfectly willing to keep a card (and its associated credit limit) open with no activity. But granted, if for some reason the system scores you as not-auto-grant on the initial card application (in which case I have no idea what they base it on), then you might have to go with a fee secured in order to jump start the limit climb.

cm2012 11y ago

Just want to say - if someone set aside 5% of their income every year for 30 years, with a median national family income of $50,000, and assuming 5% after inflation gains, they would only have $125,000 saved after 30 years - only 2-4 years worth of living.

AnthonyMouse 11y ago

> I'll give you one thing - financial planning education in the US is absolutely awful and continues to fail millions of people every year. It's not just financial planning education -- it's financial planning policy. Almost every policy we have is described as progressive, but isn't, and acts to discourage saving. We have a graduated income tax. Where do the brackets start? ~$9000. That'll teach those fat cats making $15,000/year. And Richie Rich over there making over ~$37,000 will have to pay even more again -- even though the minimum wage fat cats were already paying the same marginal rate as investment bankers pay on capital gains. And the investment bankers don't pay into social security but you pay the full rate starting from dollar zero. Which money you won't get back unless you live long enough, can't dip into for emergencies (so emergencies get paid with high interest debt rather than reduced savings), and statistically will pay out less than investing the same money in an index fund. But that's not the half of it. The thing that really gets you is all the programs designed to "help" you. If these programs were unconditional (i.e. not tied to income/savings) then they might actually do this, but they aren't. And the thresholds are low. So two things happen. First you want to send your kids to college. Did you have some money saved up? We'll take that right out of your financial aid package thankyouverymuch, that'll teach you to save money. Same thing if you have to change careers and go back to school yourself. Then you realize that the amount of money you're making isn't going to cut it and look around for ways to make more -- which is where you get hit by the train. They call it progressive because people who make more money are supposed to pay more. But they never bother to tell you "more money than what" -- and the number is less than minimum wage. You work part time stocking shelves at the Walmart and you get government subsidies for food, housing, healthcare, etc. You bust your hump going to night school for three years so you can get a $38,000/year job as assistant to the regional manager and the subsidies evaporate... leaving you pretty much back where you started, only now you have student loans. But try to save something for retirement, would you?