It seems like there A LOT of people in San Francisco who have the same exact mindset of your friend. I know several people in their 50's and 60's who have zero money saved for retirement and their retirement plan is to simply trust that things will work out. One person is in her mid 50's, works hard and is a good person but only makes enough to cover her bills and due to circumstances beyond her control isn't eligible for social security. I really worry about her. But she says it isn't a problem, she just trusts everything will work out and she likes what she does and is okay working for the rest of her life.
Another person is in her early 50's and makes good money but lives an extremely luxurious lifestyle with fancy cars, restaurants, drinking, lavish trips and has no interest in saving. She also has her own business and I am pretty sure she has not filed a tax return in at least 20 years, so she won't be getting social security. But this isn't a problem, because she just trusts things will work out for her. I worry about her as well. She actually believes is is really dumb to pay taxes and save money and every time the stock market crashes, she uses this is justify her position.
Both of these people can cite dozens of examples where they were in tough situations and divine intervention came through and the Universe provided for them. They both seem to really have no doubt that things will be okay for them. I do think it is great to have that kind of faith, but wouldn't it be better to make a plan, save some money AND have faith?
Then there is another one who has her own business and she is in her 60's and her business is not doing well. She has tons of debt and nothing saved. Every time I mention her filing for social security, she gets nervous, turns white and changes the subject which makes me think that maybe she hasn't been paying taxes either and might not be eligible.
I am no financial wizard myself and well was on my way to becoming very much like frugalecon's friend. I had massive credit card debt, huge expenses, a negative net worth and an out of control credit card addiction. So I am in no position to judge anyone, which I am not, I am just worried about them. If it had not been for Dave Ramsey, JL Collins and this website, I would be COMPLETELY doomed. I am now 50 and it wasn't until age 48 that I was able to turn all of these things around. I am now debt free, free of my credit card addiction, have low expenses and am saving a significant amount of money every month consistently. Even though I got off to a late start, I feel grateful that I will be able to retire eventually, probably by age 60. With the path I was on, I would have been working my ass off until I was 80.
And Frugalecon, this was an EXTREMELY helpful thread and I really appreciate you starting it.