Can you say "Wal-Mart Greeter?"

I too have asked this question a lot; and I mostly agree with you. I
think the general advice holds because most people are irresponsible
(it doesn't have so much to do with money I think). The nuances of
risk vs. reward don't work in practice with most people, so a
zero-tolerance approach is used. Therefore, anecdotally speaking, I
think there is some polarisation here where a lot of people either
overspend or oversave.

But your specific situation may differ and only you can judge that. It
depends on your potential future income (will your income rise
substantially higher than inflation), whether you're well-insured (for
catastrophic situations), whether you ever want to retire (you may not
because you're doing something you love), whether you have a safety
net (rich parents for example), how disciplined you are, etc.

As I've mentioned, I don't think much of debt. I don't think much of
money either. I do value life experiences. Money sometimes is required
for those, and sometimes not. If there is a life experience you really
wish, and it can't be put off (some things are best done single for
example), then I'd say take on debt and do it if that's what's
needed. But also remember that no one can experience everything (even
though I'd love to).

So pragmatically, figure out how much disposable income you need to
live a month. Be generous. Make sure you're saving for whatever you
need to save. Make sure you have insurance coverage. Budget for all
necessary and sundry items. Subtract all these payments from your
paycheck. What's left is what you can use to spend as you see fit
(perhaps even making a loan payment). Since I don't like debt, a
half-hearted compromise I've arrived is to only take on debt for
anything in a manner that raises net worth (so in theory you could
sell everything and be "debt free", and if you can make the payments
as I described above, then eventually you will "own" it completely).

Your point about age is relevant, but it is just having to do with
physical ability but your tendency to take risks, your understanding
of your mortality, the responsibilities you have to other people who
depend on you (not just family), and so on.

--Ram

VStennis <sayenvs[at]auburn.edu> wrote:

- quote -

[...]

Another thing to really consider is, what are your long-term goals with
your money? My goal is to be able to retire when I am ready and not
have to work part-time because I didn't save enough. Another goal I
have is to be able to give a lot of my money away. It gives me a great
feeling of warmth when I can give money, either anonymously or not
anonymously, and impact someone's life in a positive way.

It's far easier to be able to save for a comfortable retirement and
give a gift of money to someone who needs help when you don't have to
give the money to Bank of America, BMW financing, and Chase bank.

On Wed, 24 Nov 2004 17:56:41 CST, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> wrote:

- quote -

I too am closing on 60 and my experience is that the wanting of things
never changes. The things themselves do (I've been through cars,
motorcycles, fishing and scuba trips, second homes), but the wanting
never changes.

I've found that as long as you do the things you must do - avoid all
consumer debt (everything except home on a cash basis, and the home
should amortize before retirement), regularly save for retirement
(minimum would be IRS max 401k and Roth if eligible, index fund if
not), keep cash reserves, etc. - then what's left is yours and you can
have some fun along the way.


-HW "Skip" Weldon
Columbia, SC

sayenvs[at]auburn.edu (VStennis) wrote:

- quote -

Did that at 17.

- quote -

Did that at 52


- quote -

Did that at 46. And a bunch of other stuff, including BMWs, international
travel, nice TV, etc.

- quote -

Paid cash. That may be the best measure of whether something is "stupid stuff"
or not. If you've got to borrow for it (reasonable houses, cars, and education
excepted), it's stupid stuff.

- quote -

I haven't reached my prime time yet. Each year is better than the one before.
You are denying yourself *some* of these things when you are young so you can
have a bunch more of them later.

- quote -

You need it at 65 for the same reasons you need it at 25. And while you might
not live to 65, the overwhelming odds are that you will. And if you've saved,
you'll be able to take your grandkids flying or to Disneyland, you won't have to
just tell them about it.

You seem to think life ends at 30. Trust me, it doesn't.

-- Doug

- quote -

I'm a few months from 60 and I will be walking a marathon in January. No, I
won't be running (though there will be others older than me who will), but
I'll bet I'll be walking it faster than you could now at age 24. You're
going to be plenty surprised. I have a friend who is 75 and says that if he
knew he was going to live this long he would have taken better care of
himself. No he can't do much, but I know other 75 year olds who are pretty
spry.

You need to take care of both your physical self and your financial self.
Your $4000 a month 40 years from now won't buy much (is that pre-tax
earnings?), but it's your choice.

Elizabeth Richardson

VStennis wrote:
- quote -

I think I thought that when I was 24 too. Come to CA, it'll reset your
age-barometer. I've run into TM Herbert a bunch of times climbing in
Yosemite, that whole gang is still climbing - Steck, Robbins (these are
the guys that put up the big walls in the 1950s). And Hawaii hiking
isn't exactly the Himalaya, so there's plenty of white hair on the Na
Pali Coast. One of my climbing friends is pushing sixty, summited
Everest last year. Another (50+) books a different exotic fishing trip
every year. Really, things look like they can be plenty interesting at
50 and beyond, it's not all Geritol and daytime TV.

But of course those things aren't going to happen if you're still paying
off the credit cards you ran up because you plowed money into a car you
couldn't afford when you were 24. "Delayed consumption" is one of those
fundamental things that leads to personal wealth.

Look, I hear you on your basic point - definitely don't be a miser.
Misers aren't interesting people. You gotta strike a balance between
saving & spending. And when you're 24 there are things you can do that
you can't do later.

But I wouldn't put a 325, Austria or the Pyrenees in that category.
Especially the car - cars are one of those biggies where you give up a
lot, and get essentially the same thing (a ride from point A to B).
Sure, get a 325 if you can afford it (meaning pay cash out of your
checking account). But when you add it all up - purchase cost, interest,
insurance, upkeep, etc. - the life-cycle cost of a 325 is probably at
least $25,000 higher than something completely livable that does the
same thing, and that better fits your income level (for me at 24 it was
a used GTI). Is it really worth all that to you?

Look at the flip side, it's not that you would put $25k into savings and
promise not to touch it until the doctor bills (or funeral expenses)
come in. It's that you'll gradually sock it away and keep it working,
along with the money you save by making other similar decisions, like
the house or apartment that's a little bit smaller but $300/mo cheaper.
And in ten years your life will be much more interesting because of the
options available to you. Travel where you want, move where you want,
start a business, take a year off, whatever. That light at the end of
the tunnel comes much more quickly than you're making it out.

I guess I'd say you might consider raising the bar. You're talking about
a 325 and a trip to Hawaii like these are purchases of a lifetime - so
might as well do it now. Granted, they are for a lot of people, they
don't come cheap. But if you're even considering them at age 24 I'd
suggest that if you just scale that back a bit now, and sock away the
difference, then it won't be long before the Hawaii trip will be an
annual one, and the car will be the fast & plush 7 instead of the
milquetoast 325 (that my half-the-price Jetta can eat for lunch while
hauling a week's worth of gear & bikes).

-Tad

Richard Cline <dcline[at]silcom.com> wrote in message news:<dcline-
- quote -

Not to be cruel, but can you go hiking through the rain forest in
Hawaii for a week, can you go rock climbing in Pyrenees or snow
boarding in Austria, and I won't be able either at age of 70. That's
my point.

- quote -

You are a funny guy, well, I have to disappoint you, it is a 325, 7
series was just way out of my league for right now, maybe when I am 70
and rich like you. LOL

"John A. Weeks III" <john[at]johnweeks.com> wrote in message news:<231120041601321796%john[at]johnweeks.com> ...
- quote -

That is exactly my point - I don't see how it makes sense to deny
yourself nice things: and I am not talking about stupid stuff, but
things like traveling, buying that boat or motorcycle that you dreamed
of, taking flying lessons, going skiing to Colorado, go to Super Bowl,
Olympics, World Cup or what ever you are into, even if you have to go
into some reasonable debt over it. Why deny yourself these things in
your prime time, when you can enjoy them most, just so you can do them
when you are 60 or even take 40 and have kids, maybe grand-kids, other
responsibilities, health issues. It is a simple as that I can do A LOT
more when I am 25 and enjoy it more now, then when I am 45. I want to
have a full life, life rich in experiences, not money. When I have
grand kids I want them come to me not get some cash but so I can tell
them about that one time when I watched (not on TV, but live) Boston
Red Socks come back and beet Yankees in 2004, and tell them stories
about going to Spain for the running of the bulls or stories about
Australia or Japan or how I learned to fly an airplane. And again I am
not saying one should apply for as many credit cards as he can and
then just run up the debt like a mad man; however, what is wrong with
getting into some manageable debt or not paying off your mortgage in
12 years instead of 15 or even 30, but so you will have some cash on
hand to do these things now.



- quote -

I am not talking about spending every penny: there is 401k, mutual
funds, stocks. You don't have to have that much saved to live
comfortably at age of 65.

For example to withdraw every month - $4000(reasonable amount for most
of the country) for 30 years (since I think we will hard time living
past 95 ) at only 4% annual interest rate - you only need about
$830,000.
I figure that is pretty comfortable amount to live on, since by then
our house will be paid off, kids already out of college, basically
expenses will be pretty low.

Well my wife and I are 24 right now - so for us to reach that goal by
the age of 65, at APR - 5%(EXTREMELY low for long term investing) we
only need to invest $513 a month, that is without company matching and
all other stock perks that companies offer.

Now, I know that in 40 years $4000 will not be a lot of money due to
inflation, but you have to look that I used 5% which is a very LOW
number for 40 years of investing. Even at 10% - $500 a month will
become over $3.5 millions.

So why try to pay off mortgage earlier or try to invest more that $500
a month, yes I can have much more money if I do invest only $100 a
month more, but why would I need it at 65, even if I get to live till
I am 65.

sayenvs[at]auburn.edu (VStennis) wrote:

- quote -

All I know about Dave Ramsey is from the interview on 60 Minutes a couple of
weeks ago, but he seems extremely sensible.

- quote -

He only seems to advocate severe cut-backs for people that are deep in debt.

- quote -

With luck, long and high quality. The rewards of life change as you get older,
but they don't go away. Grandma lived happily and well until she was nearly
100.

- quote -

My dad enjoyed his BMW at 75. I'm enjoying mine at 54. I enjoyed another at
35.

- quote -

Go if you can pay cash. Go later if you have to save for it. You will enjoy it
then, too.

- quote -

The core point is to be happy, now and in the future. Misers are rarely happy.
People who are deep in debt won't be happy long and probably aren't now. Future
happiness often requires delayed gratification, e.g. saving and paying down
debt.

Money can't buy happiness, but it eliminates a lot of causes of unhappiness.

-- Doug

The point is to have a plan. Then to save to reach the goals of the plan.

You can take vacations and buy cars and retire providing you plan properly.

Brown bag lunch, clip coupons, don't run up big amounts of credit card debt,
spend on things that are important.

"VStennis" <sayenvs[at]auburn.edu> wrote in message
news:a847f35a.0411231207.1427905e[at]posting.google.com...
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

In article <a847f35a.0411231207.1427905e[at]posting.google.com> ,
sayenvs[at]auburn.edu (VStennis) wrote:


- quote -

I'm 70 and thoroughly enjoying life. I have all the toys that I want.
At the same time I see many people who had equal opportunity that are
now struggling with life.

- quote -

I hope you didn't wimp around with a lousy 3 series BMW. The only ones
that count are the 7 series. They are truely the BMW class. The 3
series can generally be beat by the Jap cars.
- quote -

Again, I hope you do it in that manner that will be memorable. Fly
first class. Stay in a 5-star hotel. Next year France.

- quote -

We each make our choices. As long as you are comfortable with your
choice you need not listen to others.

In article <a847f35a.0411231207.1427905e[at]posting.google.com> , VStennis
<sayenvs[at]auburn.edu> wrote:

- quote -

If you really did read Dave Ramsey's book, then you would know the
answer to that. Dave tells you to "live like no one else today
so you can live like no one else tomorrow". That is, if you are
wise about your decisions today, that will lead to wealth and
financial independence, and then you can enjoy the fruits of
life that come with wealth.

- quote -

So, what happens when you get 65 and you are broke? How are you
going to afford those doctors? What do you plan to eat...your
30 year old BMW or your boat? The fact of the matter is that
65 is just a starting point for many people, and if you follow
Dave's plan, you don't have to wait to 65 to get there.

- quote -

Again, if you really read Dave's book, you would know that he doesn't
preach paying off the mortgage. Dave is perfectly fine with you
taking out a low rate 15 year mortgage, as long as the home is a
reasonable home for your family.

- quote -

Again, Dave doesn't say you cannot have the BMW. What he says
is that a new BMW is a very expesnive car, and it has a huge
opportunity cost. For example, if you were to buy a used Civic and
invest the BMW payments, you would end up with more than $1-million
in savings by age 65. What Dave wants you to realize is that by
getting this new BMW, you are actually paying a million for it.
Is it really worth it to you? If it is, then go for it. But in
my book, no car is worth a million.

In fact, Dave Ramsey's daughter just bought a BMW. She saved up
her allowance money, and Dave matched it dollar for dollar, and
she bought a nice used BMW. There is nothing wrong with doing that
since she did not go in debt to do it.

Bottom line...if you have to get a car loan, you cannot afford the
car.

Where Ramsey really rails on cars is when people call the show,
and they make $40K a year, have $40K in credit card debt, and
have two $30K 4x4's sitting in the front yard.

- quote -

Thank god you are only young once...that means you will only make
the mistakes of youth one time. Many people keep repeating the
same mistakes of youth over and over again until they are retired
and are still broken and in debt.

- quote -

If your bills are paid up, you are out of credit card debt, and
you are putting away for retirement, then there is nothing wrong
with taking a vacation in Hawaii. The key is that you have to
have your house in order first, and you need to be able to afford
it. If, however, you are massively in debt, and you plan to put
the trip on plastic, then you would be foolish.

- quote -

Actually, the statictics show that Americans pay too little attention
to their financial status. Savings rates are at an all time low.
People in China save nearly half of what they make. Americans save
less than 1%. 1 in 10 home mortgages is in default, and nearly 10
times as many people filed for bankruptcy last year as they did a
decade ago. The repo man is eating well these days.

In addition, it sounds like you are too young to have experienced
any lean years. Ask yourself what happens if one of you loses
your job, then loses your healthcare, and then gets cancer. Or
you have a miscarriage, or a really bad car accident. Things
happen, and you need to be at least a little perpared. The funny
things is that the more prepared you are, the less likely they
are to happen to you.

- quote -

Again, Dave Ramsey is not preaching that. Dave wants everyone to
live rich, but do it honestly and not by charging it on credit cards.

BTW, you really should call the show and get this first hand from
Mr. Ramsey. It sounds like you are doing OK, but could use a little
coaching on philosophy, and perhaps a little help on the steps.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

well, I read Dave Ramsey's book Total Money Makeover and constantly
read threads here about how great it is to not have any debt, pay
everything early, save for your retirement and so on. Well, I have one
question that is kind of always in the back of my mind when I hear or
read this kind of stuff:

When are you supposed to LIVE if all your life you cut back expenses
and invest all your spare money into mutual funds?

I mean, sure it's great when you are 65 and have 2 million bucks in
the account, but how much of a life and what quality of a life I will
have left. Maybe at best 20 years of life with most of my time spend
seeing doctors? Don't get me wrong, I am not for spending like crazy,
but why spend every dime to try to pay off a low interest mortgage
instead of using that money for traveling or buying a nice car or
motorcycle, doing something you always dreamed of doing and always
thought that you can't afford it.

I recently purchased a new car, this is my first truly new car. Since
I was allowed to drive I wanted a BMW, but never could afford and now
I am in a situation where I can finally "afford" one, so I spend long
time thinking on whether I should listen to Ramsey and others( I
mention his name, just b/c I read his book) or just buy one. I really
couldn't make up my mind: on one side I can buy a cheap and reliable
Honda Civic and save a lot of money, but no enjoyment or I can buy
BMW, waste(no argument here) a lot of money, but enjoy driving every
day. After a lot of thinking I went with BMW - I am young only once in
my life, never again will I ever enjoy this car like I can now.

Now second case, my wife and I are thinking about going to Hawaii,
again it's a lot of money - money that we can invest of even better
put down on our mortgage so we can pay it off couple years earlier,
but we only young once, we still don't have kids and there won't be
another time like this to go on a vacation, so what do we do???

I can talk about examples like this all day long, but this is getting
rather long.
So to summarize: I want to say that here in America people obsess over
their financial status way too much. It's all about how much equity I
have, how much money in the 401k, mutual funds and so on.
Again I am not saying you should spend like crazy and run up debt, all
I am saying is that you should NOT jump extremely to the other side
and start saving every penny so that in the end you are just an
extremely rich, but dead guy.
Any comments welcome