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Plenty of people can afford to retire, but they spend money like fools and then wonder why they don't have any. Read The Millionaire Next Door or listen to Dave

Plenty of people can afford to retire, but they spend money like fools and then wonder why they don't have any. Read The Millionaire Next Door or listen to Dave Ramsey and you'll quickly learn that you can save plenty on a low income or go broke on a high income. Savings, income, and wealth building are in fact three distinct and also interrelated things.

maerF0x0 8y ago
You're getting downvoted because it's a message people dont want to hear. We have advanced our standard of living, but haven't kept up our standard of responsibility. Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. All of those were likely dumped into home equity (owning your home was the predecessor to diversified assets in retirement savings). Another thing that hasn't helped is the government has been printing money like crazy, playing a mind game that means even though you make 2x when you started your career, you might actually be really earning less. For example, my earnings have gone up about 6x across my career, but my rent has gone up 10x...
- ryandrake 8y ago
  > Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. They also didn’t have six figure student loan debt, and their housing costs were not 50-75% of their salary. Video games and cell phones are small potatoes—-not what is keeping the current generation financially insecure, but they are visible “luxuries” that Baby Boomers can point to and try to shame people over.
  - randomdata 8y ago
    > and their housing costs were not 50-75% of their salary But our grandparents did predominately live in rural areas. You can still live quite affordably in rural areas now. Most people just aren't happy with that lifestyle anymore. Additionally, the majority of our grandparents didn't own their homes. If the majority of us were okay with renting like our grandparents were, you wouldn't see the irrational behaviour of buying at any cost that pushes the market beyond what is sensible (i.e. paying 75% of salary for no reason).
    - amanaplanacanal 8y ago
      The opportunities to make a living in rural areas aren't really there any more. Unless you mean to move to a rural area when you retire.
      - AstralStorm 8y ago
        Unless you're very physically fit, rural work will break you in old age. Good luck retiring to a farm. Even better luck getting health care there.
        randomdata 8y ago
        Does one need to be more physically fit to be a developer in a rural area (I know of several places hiring) as opposed to the big city? In fact, the data suggests that city dwellers are statistically more fit as they are more likely to walk everywhere, while rural people are more likely to drive to their desk job. Agricultural work can be available in rural areas, but even in the most agriculturally productive areas, makes up a small portion of the workforce. The age where the majority of the population are farmers is long gone. Even within the agricultural sector, a lot of the work is in front of a desk.
        ryandrake 8y ago
        There are far fewer development (or other white collar, low physical effort) opportunities in rural areas. If remote work ever gains significant traction, this would be a viable way to save housing expense.
        randomdata 8y ago
        > There are far fewer development (or other white collar, low physical effort) opportunities in rural areas. In my foolish youth I once tried to maintain two development jobs at the same time. That turned out to be a really big mistake. With that in hindsight, I really have to question why people are worried about how much opportunity there is. Maybe you are better than me and can handle two jobs without issue, but three? How many jobs do you really need? One available opportunity is all I will ever need again.
  - mmirate 8y ago
    > housing costs were not 50-75% of their salary 75% is far above what any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Personally, my housing is around 25% of my posttax income, and I thought I was pushing it a bit. This isn't a generations problem, this is a supreme-ignorance problem.
    - maerF0x0 8y ago
      > 75% is far above what I or any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Two rules of thumb i've heard are: 1) Do not mortgage more than 4x your annual salary (household if double income) . 2) Do not pay more than 20x annual rent for a place (eg, $50k annualized rent == $1M house) . Another way to rephrase an ignorance problem is a lack of education problem. On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") , on the other hand those tasked with educating us have failed us (parents, school system) .
      - mmirate 8y ago
        > (parents, school system) Being younger than the Web, I utilized neither of those things to learn how to set up a budget. > On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") Damn straight.
      - randomdata 8y ago
        > on the other hand those tasked with educating us have failed us (parents, school system) Is the problem lack of education, or is it that humans also have emotions to contend with? If, hypothetically, someone with a $100k income spends $75k on rent, they are left with $25k to spend elsewhere. If another location allows you to rent a place for $10k, that means that a $35k income would also leave you with $25k to spend elsewhere. Assuming all else is equal, try and convince someone with that $100k income that they should move and take a $40k job instead. It, in almost all cases, isn't going to happen. Sure, they would technically be better off, giving them an additional $5,000 in their pocket. But from a social perspective, saying that you make $100k sounds way more impressive than saying you make $40k. And moving isn't a desirable action for most. It seems that is difficult for a lot of people to overcome, even when they know the numbers are not in their favour.
  - maerF0x0 8y ago
    > Baby Boomers can point to and try to shame people over. I'm not a baby boomer and IMO people shouldn't both consume luxuries whilst complaining they cannot afford necessities (IMO retirement is a need), irrespective of how "small" the potatoes are, they add up and compound.

maerF0x0 8y ago

You're getting downvoted because it's a message people dont want to hear. We have advanced our standard of living, but haven't kept up our standard of responsibility. Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. All of those were likely dumped into home equity (owning your home was the predecessor to diversified assets in retirement savings). Another thing that hasn't helped is the government has been printing money like crazy, playing a mind game that means even though you make 2x when you started your career, you might actually be really earning less. For example, my earnings have gone up about 6x across my career, but my rent has gone up 10x...

ryandrake 8y ago
> Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. They also didn’t have six figure student loan debt, and their housing costs were not 50-75% of their salary. Video games and cell phones are small potatoes—-not what is keeping the current generation financially insecure, but they are visible “luxuries” that Baby Boomers can point to and try to shame people over.
- randomdata 8y ago
  > and their housing costs were not 50-75% of their salary But our grandparents did predominately live in rural areas. You can still live quite affordably in rural areas now. Most people just aren't happy with that lifestyle anymore. Additionally, the majority of our grandparents didn't own their homes. If the majority of us were okay with renting like our grandparents were, you wouldn't see the irrational behaviour of buying at any cost that pushes the market beyond what is sensible (i.e. paying 75% of salary for no reason).
  - amanaplanacanal 8y ago
    The opportunities to make a living in rural areas aren't really there any more. Unless you mean to move to a rural area when you retire.
    - AstralStorm 8y ago
      Unless you're very physically fit, rural work will break you in old age. Good luck retiring to a farm. Even better luck getting health care there.
      - randomdata 8y ago
        Does one need to be more physically fit to be a developer in a rural area (I know of several places hiring) as opposed to the big city? In fact, the data suggests that city dwellers are statistically more fit as they are more likely to walk everywhere, while rural people are more likely to drive to their desk job. Agricultural work can be available in rural areas, but even in the most agriculturally productive areas, makes up a small portion of the workforce. The age where the majority of the population are farmers is long gone. Even within the agricultural sector, a lot of the work is in front of a desk.
        ryandrake 8y ago
        There are far fewer development (or other white collar, low physical effort) opportunities in rural areas. If remote work ever gains significant traction, this would be a viable way to save housing expense.
        randomdata 8y ago
        > There are far fewer development (or other white collar, low physical effort) opportunities in rural areas. In my foolish youth I once tried to maintain two development jobs at the same time. That turned out to be a really big mistake. With that in hindsight, I really have to question why people are worried about how much opportunity there is. Maybe you are better than me and can handle two jobs without issue, but three? How many jobs do you really need? One available opportunity is all I will ever need again.
- mmirate 8y ago
  > housing costs were not 50-75% of their salary 75% is far above what any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Personally, my housing is around 25% of my posttax income, and I thought I was pushing it a bit. This isn't a generations problem, this is a supreme-ignorance problem.
  - maerF0x0 8y ago
    > 75% is far above what I or any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Two rules of thumb i've heard are: 1) Do not mortgage more than 4x your annual salary (household if double income) . 2) Do not pay more than 20x annual rent for a place (eg, $50k annualized rent == $1M house) . Another way to rephrase an ignorance problem is a lack of education problem. On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") , on the other hand those tasked with educating us have failed us (parents, school system) .
    - mmirate 8y ago
      > (parents, school system) Being younger than the Web, I utilized neither of those things to learn how to set up a budget. > On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") Damn straight.
    - randomdata 8y ago
      > on the other hand those tasked with educating us have failed us (parents, school system) Is the problem lack of education, or is it that humans also have emotions to contend with? If, hypothetically, someone with a $100k income spends $75k on rent, they are left with $25k to spend elsewhere. If another location allows you to rent a place for $10k, that means that a $35k income would also leave you with $25k to spend elsewhere. Assuming all else is equal, try and convince someone with that $100k income that they should move and take a $40k job instead. It, in almost all cases, isn't going to happen. Sure, they would technically be better off, giving them an additional $5,000 in their pocket. But from a social perspective, saying that you make $100k sounds way more impressive than saying you make $40k. And moving isn't a desirable action for most. It seems that is difficult for a lot of people to overcome, even when they know the numbers are not in their favour.
- maerF0x0 8y ago
  > Baby Boomers can point to and try to shame people over. I'm not a baby boomer and IMO people shouldn't both consume luxuries whilst complaining they cannot afford necessities (IMO retirement is a need), irrespective of how "small" the potatoes are, they add up and compound.