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Americans, by and large, are morons, and don't deserve what they've been given

cpwill said:
While I'm a few decades away from having to make that math work, when I do long-term calculations, I usually figure that, whatever the account is at the end of December, I'll take 5% of that, and split it into monthly allotments for myself, and let a sort of reverse-dollar-cost-averaging effect take place, where I keep everything invested, and continue to grow over time. I'm willing for my retirement income to fluctuate a bit to have more on the tail-end of that period, when I figure I'll be most expensive.
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That's a good idea and basically what Peter Lynch suggested in one of his books on investing. Even if you only make the market's historical 7 or so percent annual return your investment will continue to grow.
 
beefheart said:
Last car I bought was 9 years ago, I still have it, took out a 3 yr loan plus cash. Finished the loan in a year.

Now that I work from home, it doesn't get a ton of miles on it..and its a Scion..its built to last forever. I'm on track for paying off mortgage by next Dec or Jan...I took a bit of a holiday on it this month and next month, because I'm going on vacation next month, air fair and 2 of three hotels paid off, plus transport, one hotel only takes cash....LOL
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:shrug: and that's awesome that you did - I just don't see why you even spent the year in car debt, given how solidly in charge you are of everything else.
 
beefheart said:
Not me. I find the places to eat that give me 6X miles, plus my work trips, and the miles add up. I pay my credit card off like it was debit. There is no difference other than remembering to go online and pay it off when it clears.
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It's at the point of purchase that they do the comparison and find that effect, though I agree that you are unfortunately rare in not letting it build up.
 
beefheart said:
Its easy...if you only buy what you need and can afford. You must build a credit score, or you will be punished by not having one. Get a Sears card for chrissakes...anything...build credit, if you ever buy a house...you will be thankful.
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... How?
 
EMNofSeattle said:
Well I'll just find a lady with a decent FICO score and shack up with her, problem solved on the house

There is nothing in my life I've needed one for, I drive a 99 crown Victoria, a very inexpensive and practical car, use a prepaid cell phone, live in a 300 sq foot studio cottage with included utilities (although it is on the beach) and eat out twice a week. One of which my grandfather pays for. So my money is in good shape and I do not need a FICO score.
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I do have a decent lady, she will most likely be moving in at some point next year (and after 6 mo....she gets free flight bennies as my domestic partner).

My house is the one I literally was conceived in, and grew up in. Parents bought it in 1960, built in 1957, raised 7 kids and 2 foster kids. I lived with my father the last few years of his life. I bought the remaining siblings out. Its 5 bedrooms, a pool and me and a dog. I live and work in the 800 sq ft add on, its a master bedroom and a huge great room and office with its own A/C. I close off the rest of the house for the summer...why cool it? It is all double paned windows, solid brick construction, and very energy efficient..you have to be when you live in the desert.
 
Carjosse said:
It also does not get any easier the younger you are. It is hard as a millennial to save. Do you really expect someone in their early 20s to have very much saved up if any at all?
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It's amazing the money that millennials can blow. Hell, as an early-20's punk, I spent enormous amounts of money on disposable and hedonistic junk. Personally, I think peer pressure and a bombardment of advertising is to blame. For instance:

Since when is it crucial to buy a $50,000 land yacht if you have one kid? No kids?
Since when is it crucial to buy a new iPhone every single year, just because a new number is slapped on the end of it?
You do not "need" cable or satellite TV.
You don't need that Coach or Gucci bag either.
...or that Starbucks coffee every morning, when you have a perfectly good coffee maker at home.

Best advice I ever got in my 30's....get a financial advisor. I know it sounds like "those things" are for "rich people," but as little as we put into it, when retirement comes around, I'll be glad for those dollars here and there, that I put into that plan.
 
beefheart said:
I'm 52, and still pretty aggressive, my work 401(k) is doing pretty good, much better than my Roth and former 401(k), but I am earning dividends quarterly which go back into the fund in more shares. God only knows what Social Security I'll get.
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Cool.

I'm assuming I'll get zip from Social Security and will have to live on my 401K and my and my wife's pensions. I'm also not really planning to ever stop working. Just going to shift to things that I really enjoy doing that don't necessarily pay all that well instead of things that pay well. If Soc Sec sends me anything I'll look at it as gravy.
 
cpwill said:
... How?
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He's right. Get a credit card...but spend wisely on it. A credit rating isn't solely based on debt-to-income ratio. It's also based on on-time payments to debt. It's based on how "revolving" revolving credit is.

1) Get credit card.
2) Buy EVERYTHING with it (but within your means).
3) Pay the thing off every month (avoiding interest).
4) Credit score increases.

I know someone who did that at 20, and by 24 she had a credit score in the 800's. Banks will practically throw themselves at people with that kind of score, when it comes to car or home loans, with ridiculously low interest rates.
 
Velvet Elvis said:
He's right. Get a credit card...but spend wisely on it. A credit rating isn't solely based on debt-to-income ratio. It's also based on on-time payments to debt. It's based on how "revolving" revolving credit is.

1) Get credit card.
2) Buy EVERYTHING with it (but within your means).
3) Pay the thing off every month (avoiding interest).
4) Credit score increases.

I know someone who did that at 20, and by 24 she had a credit score in the 800's. Banks will practically throw themselves at people with that kind of score, when it comes to car or home loans, with ridiculously low interest rates.
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1. Plenty of lenders will do manual underwriting for a mortgage
2. You don't need to borrow money for cars
3. Paying for things with plastic v cash causes you to spend more


So why, again?
 
EMNofSeattle said:
Regardless of who had it easy, you can either sit and bitch or you can make an effort to improve yourself. In the end millions of people have overcome hardships to be successful, in the end the choice is always yours
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What's the point of that comment ??

I'm not the one blowing one tiny aspect of life out of proportion to cast everyone who fails to meet my personal standard in that one dimension as morons.
 
EMNofSeattle said:
Even debit you spent more, studies consistently show people pay more at restaurants and stores with debit or credit cards, because cash spending has a higher emotional register then swiping plastic, swipers look for less deals and order more stuff is the theory
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Its spending that I normally do. We eat out 2X a week ranging from $30-$50, and if it is at a place that gives me 6X FF points, bonus....and it all gets paid for within a week. I scrutinize every price, I don't order the $22 option when the $15 option looks just as good. When you constantly keep on top of the debt, it doesn't build up.
 
cpwill said:
Why get a car loan at all? I've bought several cars, all with cash. Wholeheartedly agree on paying a mortgage off early (my intent is to get out from under a house in less than a decade from when I get the loan), but I don't see how, with your good habits, you need to borrow money for a car.
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Some offer 0% APR, which could be a free loan that one would be stupid to refuse.

On top of that, they often offer financing incentives. I saved thousands of dollars buying my truck with a loan and then paying off the loan.
 
cpwill said:
Most of my credit score comes from having a work credit card I'm required to use for travel. But yeah, as a general rule, I don't recommend them to folks - debit cards have come a long way.
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There is a big advantage with a credit card, and it is well worth it: You are protected in case of error, fraud, or dissatisfaction.

As someone who's debit account got defrauded twice, I've learned the wisdom of using a credit-card in situations where I prefer to have the protection a debit card does not offer. And besides outright fraud, it gives great negotiating strength if you need to correct a marginal or troublesome expenditure. A simple reminder to the troublesome individual or entity of ... "I hope we can work this out so I don't have to decline the charge on my credit card" ... can do wonders to improve one's chances of a successful resolution of a problem or dissatisfaction.

Also, using a credit card when renting a car or certain other transactions prevents you from having unnecessary holds placed upon your otherwise liquid funds (My local Enterprise does a $500 hold).

Finally, my parents used to use the points from one of their credit cards to go to Hawaii every 3 years or so, getting enough points for free airfare. They would put literally every bill they could on their card, and paid it off every month without interest. This isn't my game, so I have no idea if some credit cards still do this.

So I see a credit card as a tool, and a very useful one at that! Like any tool, it needs to be used correctly to remain safe and effectual.
 
beefheart said:
Its spending that I normally do. We eat out 2X a week ranging from $30-$50, and if it is at a place that gives me 6X FF points, bonus....and it all gets paid for within a week. I scrutinize every price, I don't order the $22 option when the $15 option looks just as good. When you constantly keep on top of the debt, it doesn't build up.
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So you're the exception to every rule, but how you manage your finances notwithstanding there are plenty of people who take the pitfall every year .
 
cpwill said:
:shrug: and that's awesome that you did - I just don't see why you even spent the year in car debt, given how solidly in charge you are of everything else.
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I look at it this way, I've worked for some troubled companies and always had the specter of unemployment looming, so, now while things are good I'm paying off stuff early....best case scenario, I'm still working (I plan to, my company is a massive Fortune 50) and I pay off the house and reap the rewards, or if something happens and I lose the job....I have a house paid off and my expenses are minimized.

Its the only logical way to go...look, I could spend $20,000 tomorrow on fixing up and taking my house out of its 70's decor, but that isn't necessary. Spend on what you need to spend..(roof, pool, new washer/drier, refrigerator, water heater) when it breaks, but pay the house off get that debt out of here, and all the interest that you would owe by paying it off in 30 years.
 
beefheart said:
Amen! If your company has 401(k), and they match, you would be a fool not to invest to get the matching. My company has a 6% match with a 4 year vesting period, in March, I'll be vested for 75% of the company match..its free freaking money, and I'm invested conservatively, but doing nearly 10% growth for the year. Take free money when people offer it.
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I agree!

Employee matching on a 401K is the sweetest deal going (with the other being an outright contractual pension).

Where else can you annually earn a guaranteed no risk 50-100% percent? Nowhere!
 
EMNofSeattle said:
So you're the exception to every rule, but how you manage your finances notwithstanding there are plenty of people who take the pitfall every year .
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Like I said...I have zero on my credit card...but I spend several hundred on it every month...but I pay it off. I pay 3X my mortgage to destroy all that interest. If I get a raise or a bonus....that extra money goes to mortgage or increasing my 401(k). If I can live comfortably on my current salary then I can funnel any raise into killing debt, and not feel any difference.

Its all about discipline.....where I live, we get 30 days in a row of temps over 110, so, I keep the A/C at 82, which feels really nice compared to outside...no need to put it at 73.
 
cpwill said:
:lol: how come so many of our wisest posters in this regard are our liberal ones? Most embarrassing :)
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Interesting.

I wouldn't have expected that!
 
EMNofSeattle said:
So you're the exception to every rule, but how you manage your finances notwithstanding there are plenty of people who take the pitfall every year .
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I am not the exception....I treat every penny I have seriously. Other people are morons. You always have to pay for everything. Every month my mortgage company (4th one I have had in 7.5 years because it always gets sold or merged) tries to get me to refinance my house. Now, I got my house at 5%, they tell me I can get 3.5% and save money..but, to do that I'd have to pay all kinds of fees and extend my mortgage out which will cost me much more than the path I am going....because...I am at 5%, yet I pay 3X my monthly bill, putting the excess money to principal...that effectively cuts my "real" interest rate by more than half...and no one is giving me 2.5% interest...I am giving myself that by paying down the principal at a rapid rate.
 
cpwill said:
... How?
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Get a card, buy stuff, pay it off before interest charges...repeat. Get a loan, pay it off early, never be late...repeat.
 
cpwill said:
It's at the point of purchase that they do the comparison and find that effect, though I agree that you are unfortunately rare in not letting it build up.
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Be rare.....screw the system, be responsible.

They don't like that, but when you have a high credit score, you will ALWAYS get the loan, the new card, etc. And if you work in a job that requires a security background check....well a high score means you are someone they can trust.
 
beefheart said:
That is no way to manage your money. I pay back everything early because I only buy what I can afford. Get a mortgage, pay it early, get a car loan, pay it off early. Never overdraw on your accounts and pay off things.

Paying off too much interest? I haven't paid interest on a credit card in 10 years! I have paid 25 years of my mortgage off in 7.5 years, I have eliminated tens of thousands of dollars of interest. You don't understand credit or loans, you clearly don't.
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QFT!

I have beat this into my kids like you wouldn't believe, since their teens!

*NO* mortgages >15 years! None! Never!

(also, start a $150-200 bucks a month house savings plan when you buy a house - use it for the major expenditures that are unexpected like water heater, furnace, etc. If you are lucky enough to get 2-3 years saved-up with out blowing it on a repair, you can start siphoning-off the excess to savings, investments, or paying down the mortgage)
 
cpwill said:
:shrug: and that's awesome that you did - I just don't see why you even spent the year in car debt, given how solidly in charge you are of everything else.
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I spent the year to build credit, and ensure that I still had the year salary in the bank.

Savings are important, I had a lot of money in savings when I got laid off from a company, I spent a year without a job....I went on lots of vacations....but the money was there to get me through the hump.
 
Chomsky said:
QFT!

I have beat this into my kids like you wouldn't believe, since their teens!

*NO* mortgages >15 years! None! Never!

Yup...in the last year, I have had a $1000 new fridge, $1500 new pool pump $4000 repairs to the flat roof part of my house, new drier, new dishwasher, etc. Most were paid with my credit card and got me lots of FF miles.

I had the money to cover the costs, some I staggered out over 3 paychecks, but the money was there because I live within my means and save what isn't spent.

(also, start a $150-200 bucks a month house savings plan when you buy a house - use it for the major expenditures that are unexpected like water heater, furnace, etc. If you are lucky enough to get 2-3 years saved-up with out blowing it on a repair, you can start siphoning-off the excess to savings, investments, or paying down the mortgage)
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Yup...in the last year, I have had a $1000 new fridge, $1500 new pool pump $4000 repairs to the flat roof part of my house, $4000 A/C new drier, new dishwasher, etc. Most were paid with my credit card and got me lots of FF miles.

I had the money to cover the costs, some I staggered out over 3 paychecks, but the money was there because I live within my means and save what isn't spent.
 
Chomsky said:
There is a big advantage with a credit card, and it is well worth it: You are protected in case of error, fraud, or dissatisfaction.

As someone who's debit account got defrauded twice, I've learned the wisdom of using a credit-card in situations where I prefer to have the protection a debit card does not offer. And besides outright fraud, it gives great negotiating strength if you need to correct a marginal or troublesome expenditure. A simple reminder to the troublesome individual or entity of ... "I hope we can work this out so I don't have to decline the charge on my credit card" ... can do wonders to improve one's chances of a successful resolution of a problem or dissatisfaction.

Also, using a credit card when renting a car or certain other transactions prevents you from having unnecessary holds placed upon your otherwise liquid funds (My local Enterprise does a $500 hold).

Finally, my parents used to use the points from one of their credit cards to go to Hawaii every 3 years or so, getting enough points for free airfare. They would put literally every bill they could on their card, and paid it off every month without interest. This isn't my game, so I have no idea if some credit cards still do this.

So I see a credit card as a tool, and a very useful one at that! Like any tool, it needs to be used correctly to remain safe and effectual.
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Well, if one eats cardboard and lives in a shoebox so that they can die on a big pile of money, they're less likely to spend enough to justify the fraud protection that a credit card would provide, anyway.

My credit card also provides additional insurance for things like rental cars, not to mention that i often get a % cashback with no annual fees, so i pay it every month and it gives me free money.

They also give me some nice tools for analyzing my spending habits and doing my taxes.

Oh, and i'm building my credit, so when i do apply for another mortgage, my credit score will save me tens of thousands of dollars in interest.
 
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