All you need to understand the stock market is highly manipulated.
Just like a roller coaster...... you just have to climb aboard, buckle up and go for the ride.
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Thoughts on retirement savings in the US
- Thread starter ATex7239
- Start date
All you need to understand the stock market is highly manipulated.
Just like a roller coaster...... you just have to climb aboard, buckle up and go for the ride.
.
About 20 years ago, I was doing well with my airline job (this was just before the bankruptcy and 65% pay cut, pension liquidation, etc that was still a year or two in the future) and lived in a nice neighborhood in Colorado.
Getting the kids ready for school, I was buckling them into their car seats in the back of a 16 year old Volvo wagon when a neighbor drove by in a brand new Mercedes. Another drove by in a new convertible. And another in a new SUV.
My (now ex) wife remarked, looking at those cars and then at the old Volvo, “I can’t believe all these people make more money than you.”
”They don’t. They just spend more.” Was my reply.
I could go point by point to rebut but I'm not going to waste my time or bother. You obviously think it was bad planning. But it was not. It was an excellent plan backed by plenty of liquidity. It worked very well, for a few years. But I could not fight the uphill trifecta of bad market forces, idiotic government leadership, and bad tenants (and not very good property management). The combination was a backbreaker even with my nice salary.
It boils down to timing. And nobody can force timing. You cannot "work hard" to make timing happen. By its nature, "timing" is generally just luck. And if I had "timed" it differently, I'd have probably doubled my money in 2 years rather than losing money in the 9 I owned it.
You've obviously never found yourself in dire straights no matter how well you planned and executed, the larger universe fortunes worked against you and it can be humanly impossible to win. I hope you never endure such things, but if you do you'll gain some wisdom and insights.
As they say, "the best laid plans of mice and men..."
JHZR2
Staff member
The thing with that is at some point the party ends. The credit cards get maxed, the interest becomes overbearing, the financing of a lifestyle fails.
What I don’t see is the failure. I see relatively stable families. Sure, behind closed doors maybe they’re entirely stressed.
So I attribute it to not saving to cash flow the spending. And in the macro sense: what happens when they need cash? Dump expensive housing? Are there enough suckers to buy it at that point? I think sooner or later the asset values will crash severely as folks try to cash out to cover, and fail at that transaction…
I’ve said a few times I’m hoping for a good correction. I’d like access to additional real estate at decent prices… but at some point I think a true correction has to come, and whomever is left holding the bag may end up paying for others’ excesses.
What do you mean by government leadership ?
If you were in a military town, were the renters in the military ?
My 100% unsolicited advice to 95% of all people with some cash to invest ...... stay FAR AWAY from becoming a landlord. Too risky and many laws are written favoring terrible renters, not to mention rent moratoriums allowing renters not pay a penny for 15-18 months.
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bad luck or...
seriously speaking, nobody ever wins 100% at this earthly game called life. at every christmas i think of my uncle ken who i never met. he was captured in the ardennes in 1944 and was murdered, not died, while a p.o.w. in nazi hands at age 23. he and many other young men never had any chance at life: no kids or grandkids, no home, no wife, no successes, no setbacks. i am sure that he would have preferred to return on two legs, or even one, to a life of ups and downs, rather than cold and horizontal in a pine box.
and facebook is absolute poison. its obsessions with “likes” and displays of “success” are premium top-tier gasoline that powers vanity, gluttony and lust.
sermon off.
seriously speaking, nobody ever wins 100% at this earthly game called life. at every christmas i think of my uncle ken who i never met. he was captured in the ardennes in 1944 and was murdered, not died, while a p.o.w. in nazi hands at age 23. he and many other young men never had any chance at life: no kids or grandkids, no home, no wife, no successes, no setbacks. i am sure that he would have preferred to return on two legs, or even one, to a life of ups and downs, rather than cold and horizontal in a pine box.
and facebook is absolute poison. its obsessions with “likes” and displays of “success” are premium top-tier gasoline that powers vanity, gluttony and lust.
sermon off.
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Love your story!
Back in the 90's runnup in Silicon Valley, parking lots were full of drop dead gorgeous German cars. Man did I lust over those 3 Series! I was driving a cheapie used 22RE Toyota pickup.
People looking great in Macys and Nordys clothes. I was in Levis Dockers at best.
I just kept making my house payments; each month a little over. And NEVER touching my stock options.
I lost money on my 2nd house but took advantage of the down housing market to buy in a town that would have been otherwise unthinkable.
Things could have gone south, for sure. But ya gotta try. Short term is chump change. Think long term; stay on the path.
In my case it was easy. Having anything, anywhere to sleep, anywhere to go to, anything to drive, is light years away from being homeless.
I was scared straight and still am. I never wanna be busted again as long as I live.
I understand I cannot control the world, but in my life I have exactly 1 person to blame for my decisions. I have to own my choices.
Ask your advisor for a copy of his Form ADV. If he doesn't have one, he's not a fiduciary and it's time for you to find another advisor. Not kidding.
CharlesInCharge talks about good luck and bad luck. There is a bit more to go with that.
There is plenty of evidence of rigging in the financial system and anything that involves big bucks, such as buying/selling real estate, vehicles, expensive computers, and so forth. Much of the rigging seems deliberately designed to harm those at the bottom economically. That's not the same as bad luck, as luck has nothing to do with it. There was a famous book in the 1970s that described some of this: The Screwing of the Average Man by David Hapgood. Hapgood described how the big dogs on Wall Street tell "little guy" jokes just as people then told silly ethnic jokes—with "little guy" referring to the small investor, that is, you and me.
Even Del Walmsley, who advocates buying and selling class A rental housing as a scheme for building wealth, has admitted on his show that much of what he was able to do to build his own wealth when he started in real estate in the 1990s is no longer possible. The elites changed the rules. You can't do now some of what he did then.
Also, people at the lower end are often misinformed or just plain kept (again I think deliberately) in the dark about a lot of major things in life. My working-class parents weren't thinking in the 1960s and 1970s of their own kids going to university, partly because they never had the opportunity or money to go themselves. They thought kids who did really well in K–12 would get scholarships to pay their way. No one was pulling them, or parents like them, aside to tell them the realities, even though I was an honors student in gifted programs.
My parents were shocked when they discovered late in the game that they were expected to foot most of their kids' uni costs. Let me repeat: no one was telling them this until I was in high school. Later I couldn't get even a Stafford loan because even that was limited based on parental income. There is a lot more to this story, but the recession of the early 1980s played a big role. Plenty of other parents were in the same boat. A lot of people could not afford to go to uni in the first place, or (like me) left well before completing a bachelor's.
Part of the rigging there was in not adjusting the federal financial-aid tables to account for the roaring inflation of the 1970s–early 1980s. My parents both had to work and in 1982 had on paper an income that looked really nice by 1967 standards, when those charts were created. The reality was that they were just scraping by in 10+% inflation. Loads of others were in the same boat.
And then you have to factor sleazy employers who underpay their employees or otherwise don't treat well the people who help make their CEOs rich. Many people are stuck in such jobs. But that's a subject for another time and place.
At different times I have had to leave jobs and liquidate retirement accounts to survive, most recently when I left a career in corrections (state government) in 2006 to take care of my mother and stepfather. It can happen to almost anybody. That kind of event will set back most people. The thing is, at age 58 I'm only now making the kind of money I hoped to be making 30 years ago, and yes, I have a 401(k) with the maximum employer match. But it's hard to bounce back from the past or make up for it.
So I know where CIC is coming from. My input is that the luck argument is just a little simplistic. You have to add rigging, keeping people ignorant, and suffering setbacks beyond one's control.
Interesting that most states have resisted adding a financial-literacy requirement to the public-school curricula, almost as if they want to perpetuate the ignorance...
There is plenty of evidence of rigging in the financial system and anything that involves big bucks, such as buying/selling real estate, vehicles, expensive computers, and so forth. Much of the rigging seems deliberately designed to harm those at the bottom economically. That's not the same as bad luck, as luck has nothing to do with it. There was a famous book in the 1970s that described some of this: The Screwing of the Average Man by David Hapgood. Hapgood described how the big dogs on Wall Street tell "little guy" jokes just as people then told silly ethnic jokes—with "little guy" referring to the small investor, that is, you and me.
Even Del Walmsley, who advocates buying and selling class A rental housing as a scheme for building wealth, has admitted on his show that much of what he was able to do to build his own wealth when he started in real estate in the 1990s is no longer possible. The elites changed the rules. You can't do now some of what he did then.
Also, people at the lower end are often misinformed or just plain kept (again I think deliberately) in the dark about a lot of major things in life. My working-class parents weren't thinking in the 1960s and 1970s of their own kids going to university, partly because they never had the opportunity or money to go themselves. They thought kids who did really well in K–12 would get scholarships to pay their way. No one was pulling them, or parents like them, aside to tell them the realities, even though I was an honors student in gifted programs.
My parents were shocked when they discovered late in the game that they were expected to foot most of their kids' uni costs. Let me repeat: no one was telling them this until I was in high school. Later I couldn't get even a Stafford loan because even that was limited based on parental income. There is a lot more to this story, but the recession of the early 1980s played a big role. Plenty of other parents were in the same boat. A lot of people could not afford to go to uni in the first place, or (like me) left well before completing a bachelor's.
Part of the rigging there was in not adjusting the federal financial-aid tables to account for the roaring inflation of the 1970s–early 1980s. My parents both had to work and in 1982 had on paper an income that looked really nice by 1967 standards, when those charts were created. The reality was that they were just scraping by in 10+% inflation. Loads of others were in the same boat.
And then you have to factor sleazy employers who underpay their employees or otherwise don't treat well the people who help make their CEOs rich. Many people are stuck in such jobs. But that's a subject for another time and place.
At different times I have had to leave jobs and liquidate retirement accounts to survive, most recently when I left a career in corrections (state government) in 2006 to take care of my mother and stepfather. It can happen to almost anybody. That kind of event will set back most people. The thing is, at age 58 I'm only now making the kind of money I hoped to be making 30 years ago, and yes, I have a 401(k) with the maximum employer match. But it's hard to bounce back from the past or make up for it.
So I know where CIC is coming from. My input is that the luck argument is just a little simplistic. You have to add rigging, keeping people ignorant, and suffering setbacks beyond one's control.
Interesting that most states have resisted adding a financial-literacy requirement to the public-school curricula, almost as if they want to perpetuate the ignorance...
In a real sense most investors are along for the ride. They might have some idea of what they are invested in. The idea of the big guy versus the little guy was that news was caught by the big guys first who profited one way or the other. The little guy is along for the ride.
Investing houses use computers to do the heavy work these days. Along with that more and more are implementing AI intelligence to predict stock and market moves. Most investors think that all the action happens on Wall Street but the reality is that the big action happens in non-descript warehouse buildings in New Jersey and across the globe. These buildings house the server farms that use the data to make decisions in milliseconds.
As a business owner with 24 employees ranging in age from 18 to 67 and pay rates of $18/hr to $170/hr it's always interesting to see who has contributed to the 401K. We give a 3% match.
No one in the 18 to 30-year-old range contributes anything and these people make between $18/hr and $35/hr.
We have someone who is 43 and makes $28/hr who maxes out the 401K every year. She has a husband who works and makes a decent living.
We have three people all 40+ years old who make around $50/hr and all 3 were contributing the max although one has borrowed heavily against her 401k.
We have four people who make +$350K and they all max out the 401lk.
What's the difference? Is it purely age? Hard to say since all of the $50/hr and above people have significantly more education than everyone else and they are significantly older than the average. We sit down every year and implore the staff to contribute. We beg. We call it "free money" and the key to their future. It largely falls on deaf ears for the younger crowd.
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I'm going to guess they're dentist. First go to dental school and then fill out the application after graduation.What position pays $170 an hour ?
Where do I fill out a job application ?
Interesting data. I wonder if anyone else has measured this trend also? quick did not reveal so. Supposedly 401k participation is high, like 85%, but the deferral rate is low, like 8.6%.
It's really tough to convince the younger people. Most of them are just starting to have kids and so I'm sure cash flow is king in their minds but my partner and I keep hammering the message every year with them.
JHZR2
Staff member
Well, the $50-$170/hr earners are making between $100k-$340k/yr. At some point money starts to free up depending upon lifestyle and housing choices.
Taxes erode income quite a bit, so saving can be harder, but when earning more, it starts to look almost like a 1:1 - divert it to a 401 or pay it in taxes.
Ive saved heavily since I started working, early 20s. I pulled back the rate each time my wife took off a year without pay to raise an infant. But otherwise it has been significant.
I totally understand this, and it is not just in the US or current time but throughout the entire human history and civilization from the stone age.
The reason being, other than technology improvement that improves everyone's quality of life, when it comes to "investing" there's always winning and losing, and there are always people who can tolerate more risks (more networking, more money, more ways to borrow, more education, less burnt out, physically healthier) and they are always the one who have less chances on defaulting on a loan, a promise, etc, and therefore lenders, customers, vendors, employers, landlords, etc are always more likely to take a risk on them than the people who are desperate and down in luck. Over time this compounding of advantages will always work against the poor and work for the fortunate ones (who will always use their resources to invest in more advantages, which is by definition what investing really is in general).
We tried using communism to fix it, but in the end they still run into the same problem after shuffling who has and who has no advantages over the others.
The only "fair" thing we have in humanity, is typically after 3 generations of wealth, some of the off springs will become spoiled, unlucky, stupid, etc and end up either wasting the advantages away, or place the wrong bet and lost them. This doesn't change the fact that it may not help you, or the fact that there will always be winners and losers in the zero sum portion of the game.
Charles, I am sorry a lot of bad things happened to you in your life, and that sort of explain your hate against the elite, which spills over into the EV hate in the technological domain as well, I am starting to understand you more now (I still disagree with you but I am starting to see you differently).
Marriage is a choice, career is a choice, finishing school is also a choice, although we don't always get to make the right choice every single time there are always some that will be better than the others.
Usually you can see what is going on with the spouse candidate before you commit to marriage or having kids with them. Yes, I'm talking about abandoning someone you may have loved if they are addicted to narcotic, or to end or avoid a pregnancy that would have ruined your family (say you already have too many children for your income, and your health screening suggests that your next kid would have been disabled for the rest of his life requiring permanent parental care). Sometimes you have to pick what you can salvage out of a bad situation and who you can save and who you cannot save, these are tough choices and many people are not able to make them, and many made bad choices because they are lack of resources or opportunities.
Also human has a tendency of believing their successes are due to their hardworks and failures are due to their bad lucks. I have a feeling you and PWMDMD are on the 2 extremes on the scale.
One finance manager (graduated from Cambridge with MBA in finance, worked in some big major investment bank) told me, the fundamental reason why we have collapses and bargain is we have people who are distressed and couldn't find ways to save their investment, and end up getting liquidated when there is nothing they can do. So, sadly the only way you can find a bargain like that is when someone else were about to "jump off a building".
It is sad if it happens to hard-working people all the time, because when they finally can "buy a home" or "becomes a landlord and have someone else's money pay their mortgage", they are buying at an inflated price and on their barely affordable payment. The leverage is high just like investment bank with 10x or more leverage, all it take is a recession to wipe them out.
IMO this is the main reason you should not buy a home you cannot afford for your income, rent is better in this case for many people, and invest with no leverage (long term low cost investment like S&P500) with a healthy rainy day fund (i.e. 6 months living expense min in cash, not stock). Yes it is not a good feeling when your friend made 1M last year with bitcoin on borrowed money, but he may jump off a building if things go bad, not you.
I personally know many wealthy people "lose it all" when making bad investment. Wealthy is not a guarantee permanently and I have worked for a few guys who saw their companies went out of businesses after successes from hard work, and ended up working another normal 9to5 jobs like you and me.
I went to my ancestors' grave back in China once, it was massive, the family tree laid out names of children to be born 8 generations ahead, my dad was the 6th generation, and he grew up in poverty and malnourished, his dad died when he was 8, his mom was a gambling addict and used all the money his sister sent home to finance the addiction and his grandma ended up raising him with food shortage all the time.
He got lucky, got into middle class, still hate a lot of stuff in government and I still see him overeat himself into diabetes, subconsciously, to overcompensate for his childhood. Still, he made a good choice marrying my mom who rejected him previously, wasn't pretty, but was very savvy in saving money and investing. She was not smart but was generous to friends and family, someone you can count on, work hard, and have a positive attitude in life that compensates for my dad's doom and gloom outlook in life. I think out of all the personality trait my mom's positive outlook in life is really what made my dad a more positive person, and in the end, makes him work harder to get a better life.
Not everything is about money and success, what helps you become a better person, support you during bad time (emotionally, not financially), and brings you back to the right path when you are distracted, IMO are more important traits than someone rich and beautiful / handsome, from a nice family with a nice education, etc.
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