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I think the article can be summed up by this sentence: > We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wed
by Lazare 11y ago
I think the article can be summed up by this sentence:
> We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wedding.
The author isn't mysteriously broke. Money is not being stolen from his account. Rather, he's spending a lot of money on things which he believes are necessities (like paying for a child's wedding), and sacrificing a lot of things which he believes is optional (like having retirement savings). Some would suggest both categorizations are wrong.
Also:
> we believed [our children] had earned the right to attend good universities
That's actually not how university tuition works, and the rhetorical tricks being deployed here leave me cold. Your daughters did not have the right to attend those expensive private universities; they had the privilege of doing so, because you spent a lot of money you didn't really have to obtain that privilege for them. Which is awesome for them! No doubt it will benefit them (which is why you paid all that money, I imagine). But it's not entirely clear to me how "middle class" paying for your children to go to some of the most expensive schools in the world really is?
- Lawtonfogle 11y ago>No doubt it will benefit them (which is why you paid all that money, I imagine). The nightmare many are facing is that it doesn't benefit them. Regardless of what self improvement one may receive from their degree, certain degrees are being awarded at a faster rate than the economy demands them, depressing wages for those who can use that degree to get a job and resulting in many who can't use that degree to get a job.
- carsongross 11y agoThere is no doubt that they have spent money foolishly, but bear in mind you are talking about them spending on a wedding and college. These are not trips to Vegas with hookers and blow, but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. So, yes, there is some blame to be apportioned for the spending habits. However, there is also the systemic problem of real incomes declining significantly, with major life costs (housing, education, medical, taxation) increasing dramatically: https://research.stlouisfed.org/fred2/graph/fredgraph.png?width=880&height=440&id=MEHOINUSA672N https://research.stlouisfed.org/fred2/graph/fredgraph.png?wi... This problem is significantly worse if you use the old CPI, which some people feel is more honest: http://www.soundmoneyproject.org/wp-content/uploads/2012/03/Household-income.png http://www.soundmoneyproject.org/wp-content/uploads/2012/03/... Either way, the decline in real wages in the face of rising major life costs is a major contributor to the increasingly precarious position of many middle class families.
- koolba 11y ago> These are not trips to Vegas with hookers and blow, but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. I have more respect for someone who blows all their money on "hookers and blow" (or whatever their personal equivalent is) than keeping up with the Jones. If you're gonna flush your wad of cash down the toilet, pick your own stall!
- geodel 11y agoI totally agree with that. Though my chosen low expense lifestyle hasn't earned me any respect from consumerist drones friends and colleagues.
- tamana 11y agoI'll be your frugal friend and respect you. I blow my money on charity medical relief in impoverished regions, not fancily-plated food.
- anon4 11y agoMaybe keeping up with the Jetsons is their personal equivalent?
- jbob2000 11y agoYou don't need to have an expensive wedding, worthy of emptying a retirement savings account. You can still have a wedding, just don't spend 40 years of savings on it. And you can still go to college, but go to a state college and live at home. The con these private universities are pulling on the middle class is something for the history books. They sell this "university lifestyle" to impressionable, naive high schoolers who then throw themselves (or parents) into stupid amounts of debt just to live the lifestyle.
- jazzyk 11y agoThis. See my comment in this thread (basically saying the same thing)
- deleted 11y ago[deleted]
- dforrestwilson 11y agoThis is not the first woe is me article put out by destitute writers. I can't say I feel bad for his life choice to get a degree in something that everyone knows pays poorly.
- mfoy_ 11y agoHe actually claims to be making a decent income, the issue is his spending habits, not his career choice.
- koolba 11y ago>> We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wedding. > The author isn't mysteriously broke. Money is not being stolen from his account. Rather, he's spending a lot of money on things which he believes are necessities (like paying for a child's wedding), and sacrificing a lot of things which he believes is optional (like having retirement savings). Some would suggest both categorizations are wrong. Bingo. As much as I think of social security as a ponzi scheme, one thing I do like about it is that it forces people to contribute and they can't touch their contributions. Sure you might only get $.60 back for every dollar you throw in there but hey at least you'll get something. It's sad to say it, but the majority of people are not financially savvy enough to make sound decisions. Left to their own devices most people wouldn't save diddly squat, work till they're fired, then be destitute. And they probably won't have kids to take care of them anymore either because "Kids are expensive ... you can't afford that!".
- brianwawok 11y agoThe average person sees maybe 600 ads a day asking them to buy something, and maybe 2 ads telling them to save more (using overpriced financial advisor X). Not saying people have no responsibility, but the odds are kind of stacked against you - it is an uphill battle to survive.
- SilasX 11y agoBut the Ponzi scheme aspect of SS is (mostly) orthogonal to its "forced savings" aspect. If the revenues from its taxes had been invested like a sovereign wealth fund, even very conservatively, it would be in much better shape. Instead, it was "invested" in government bonds, which is equivalent to saying, "oh, I'll just raise the money later". But that's courting disaster: if you have these unfunded obligations that come due, you have to gore an increasingly difficult amount of taxes out of your base, which can become rapidly impossible if and when people start fleeing from the burden. We could have kept the forced savings but given people back more than a real dollar per dollar forced to contribute.
- rayiner 11y agoI think part of the problem with those 47% is that they can't distinguish the two cases. Middle class people aspire for their children to be upper middle class, and the traditional routes to such jobs (excluding the software world), require an expensive education. They do not require an expensive house, or expensive car, or expensive wedding. The article strikes a chord with me, because the author exhibits some of the same thinking as my own parents. They paid for my brother and I to go to college, for which we are very grateful. But they also say that the giant house in an expensive zip code, the foreign cars, etc, are "for us" using some nebulous baby boomer thinking like "if you want to be somebody, you have to look like somebody." Far be it for me to judge my parents' choices. But recently, my dad quit his job and started a business. At that time, he definitely wished he had built up more of a runway.
- tamana 11y agoThey do require an extensive house. Am expensive house gets you into a top public school that feeds into a top college, and makes you neighbors and friends with rich people who can get you a good job or a wealthy spouse.
- JabavuAdams 11y agoThis is a real thing. I like to call our current house "our parental overreaction". Even here, though, there's an easy trade-off. Expensive house in good public school catchment, or cheap house + private school. But, don't do both if you're stretched.
- rayiner 11y agoNo public schools "feed into a top college." I went to a public HS regularly ranked #1 in the country, and students went to exactly the colleges you'd expect based on their SAT/GPA.
- turar 11y agoI'd imagine students at lower ranked schools had lower SATs scores, and thus didn't get to similar colleges.
- mfoy_ 11y agoI personally blame marketing and advertising for this trend. They've sold people that they not only can, but should, live beyond their means.
- pwthornton 11y agoIn fairness, if a wedding eats up your entire retirement savings, you either had a royal wedding or had no real money for retirement. I put enough in my 401k each year to pay for a wedding.
- whatok 11y agoApparently Manhattan weddings are on average your 401k contribution and then some more expensive than the next highest, Chicago. http://www.businessinsider.com/manhattan-weddings-are-us-most-expensive-2016-4 http://www.businessinsider.com/manhattan-weddings-are-us-mos...
- JabavuAdams 11y agoThere's a huge variance in what people consider a reasonable price for a wedding. My wife and I budgeted $10k in 2000, and felt like that was a bit higher than we wanted. This is in Toronto, Canada. I'm always a bit surprised when younger friends tell me they're paying double that when I don't consider them to be as financially secure. Especially when they're secular, and there's no constraining family culture to appease.
- tamana 11y agoPeople like this writer are narcissists -- relatively wealthy people who squander their gifts and seize attention from the working class who never have a chance to waste money like he does.