Author Topic: Saving/investing is absurd and ridiculous for most people!  (Read 5126 times)

APowers

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Saving/investing is absurd and ridiculous for most people!
« on: March 13, 2019, 03:11:17 AM »
I've been told in no uncertain terms that it is ridiculous to assume "that most people have the ability to save and invest."

I countered with: "Census data says that, in the U.S., most (~66%) households have an income of >$35,000, and that a full 53% of households have an income greater than $50k. Those are income levels where savings are very possible; maybe difficult, but definitely doable. *Most* people _aren't_ in poverty."

Which set off an argument about how it's not possible for a household to live on $35k/yr, let alone save/invest.

Me saying "yes, it's possible. No, didn't say it was easy."
Them saying "not possible, because reasons" (health insurance, car payments, grocery costs, childcare, health insurance, payroll taxes, but mostly health insurance)

Me saying "here's an example budget for a family of 4 with two school-age children"
Them saying, "well, our budgets are way more expensive than that" (one posting her budget for her family of 6 of ~$6k/mo. "APowers is getting a lesson in real life from the rest of the country")

Me saying "Okay, but, statistically speaking, most of the country lives in $50k+ income households, and isn't in such dire straits as to make saving/investing impossible."
Them saying "yeah, well, your situation is sheer luck. Most people under 200% of the poverty threshold can't make it."

Me saying "even if NO-ONE under that benchmark can save, that's still not _most_ people."


GAH!

Am I so far off base that I'm construing the statistics wrong? Btw, I'm the only person in this discussion who is quoting statistics.

66% of households in the US are two or fewer people.
66% of households have an income greater than $35k/yr
     53% of households' income is greater than $50k/yr
>70% of households are above the 200% poverty threshold

Is it wrong of me to look at these stats and assume that most people in the US can make some kind of savings work, even if it may not be easy?

kei te pai

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #1 on: March 13, 2019, 03:15:09 AM »
Save your breathe to cool your porridge. You know how these arguments go. Facts and reasoned statements won't get you far.

MikeBT

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #2 on: March 13, 2019, 03:24:16 AM »
Saving/investing is absurd and ridiculous for most people because they lack the desire and/or willpower and/or financial intelligence and/or life stability (e.g. ill health, poor job security) to do it properly. I don't think this is all that controversial.

You can be on a modest income and still save and invest heaps, if you have the willpower, financial intelligence and life stability. But it doesn't follow that most people on a modest income have all those things going in their favour.

This site tends to focus on what a person of above average intelligence and foresight can do with either an average or above average income. Fair enough. But give an average or above average income to someone of below average intelligence and foresight and...it ain't gonna end well.

Parizade

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #3 on: March 13, 2019, 04:03:29 AM »
Saving/investing is "absurd" for some people for the same reasons that dieting is "impossible." Many people are simply not capable of weighing options and making good long term decisions. It's possible they could learn that skill but they are not willing. They don't want to admit this is their choice so they convince themselves that they have no choice.

You can throw facts at a person like that all day long and it won't help, so don't waste your energy. As Thomas Paine said, arguing with someone who has abandoned the use of reason is like administering medicine to the dead.

Imma

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #4 on: March 13, 2019, 04:43:03 AM »
So many people have told me saving isn't possible for them at their income and most of those people earn more than we do. I can assure you a decent savings rate is possible on a >40k income because we've done it for years. It involves living a life most people don't want to live. We could triple our mortgage (I'm sure the bank would do that) and live in a much nicer home, but that would mean  our expenses would be Ä1000 higher every month. If I chose to get a nice company car my pay would be a couple hundred Ä lower every month but I'd have a really nice car.

The choice between living the good, consumer sucka life without having money stashed away and living the pathetic, pauper life with money in the bank is easy to make for most people.

mies

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #5 on: March 13, 2019, 04:56:03 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

Malkynn

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #6 on: March 13, 2019, 06:13:45 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

True, but I think it's a little more nuanced than that.

The truths that underpin most people's financial realities can be utterly terrifying to actually acknowledge. The numbers are kind of ugly when you actually look at them compared to what you might expect.

Most people expect that getting a good education and working hard in a "good" job will comfortably produce more than enough to live a "normal" comfortable middle-class lifestyle without the need to pay too close attention to the details. They perceived their parents, their friends parents, TV parents, etc, to effortlessly maintain this standard through "normal" careers, and they see only extreme options like very early retirement or very fancy lifestyles as requiring any special attention to finances.

Meanwhile, when you look closely, you find that a lot of "normal middle class" lifestyles are only affordable on extremely high incomes, especially if the person wants to be able to manage it without paying close attention. I remember being utterly shocked by how plain "normal" the lifestyle of people making a quarter million was. Meanwhile the guy making 400K lived a life that I would have expected for someone who made ~150K. I vividly recall being shocked at just how much money it took to live just marginally nicer versions of middle class life.

I remember assuming that making 30-40% more than the median should put someone into a very nice lifestyle position...yeah...not so much.

People operate under a collection of "givens" that are often grossly erroneous.
Challenging people's givens is much harder than challenging what choices they've made within their established paradigm.
Altering givens is wildly more uncomfortable than simply choosing a different option.

It's the same with health and lifestyle.
It takes A LOT to change people's paradigms from "I'm young and healthy and won't get sick" to "holy shit! My chances of serious illness are actually pretty fucking high!" I can't tell you how many people I've seen go into total fucking meltdown because they have to have a biopsy of a lump or because someone from their highschool died. I remember saying to my brother "you do realize that the healthier you are, the MORE likely you are to die of cancer, right???". The poor guy is still fucked up over that...

Challenging givens and restructuring paradigms is TREMENDOUSLY uncomfortable and can be downright traumatic.
Some of us respond to trauma very productively, some of us just retreat further into denial.

To those of us with paradigms predicated on realistic financial givens, how to spend and how not to spend is obvious. It makes it seem like those who spend irresponsibly are idiotic. Meanwhile, they are literally in denial about what the basis of their own financial reality is and the actual numbers are to be avoided because they risk toppling their entire paradigm if they look too closely at them.

Besides, saving is not the "slightly harder" choice. Working longer in high stress jobs with less flexibility due to unremitting financial stress is the MUCH harder option, they just literally don't accurately see the trade offs that they are making.

Livingthedream55

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #7 on: March 13, 2019, 06:48:08 AM »
I think the "not paying close attention" is the #1 contributor to this belief.

I have had the opportunity to dig deep into the finances of a couple of family members (they asked me - in both cases it was sibling about to become a single parent following a divorce) and also a close friend who is self-employed and dreams about retiring someday. In all three cases no one knew their monthly income and expenses, no one had any automated savings set up and two out of the three had unopened bills which were months old!! One of the three was going deeper and deeper into credit card debt each month and didn't know it!

Then there is the magical thinking that cars and houses and stuff don't need maintenance and repair from time to time and the anger and despair when something comes up that needs fixing. Because no margin, no planning, no emergency fund.

There is also the refusal to experience any diminishment of comfort (running heat at 78 degrees all winter and then setting the AC at refrigerator levels is just one example).

And lastly there is the exposure to wildly unrealistic media portrayals of what an average lifestyle looks like and how effortless it's supposed to be.

It's little wonder our message is unlikely to be welcomed.


DadJokes

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #8 on: March 13, 2019, 07:18:13 AM »
People aren't going to listen to reason until they want to. That goes double for finances.

When told their way is wrong, most people will dig their heels in, rather than see reason. I think the best thing you can do is to lead by example- live life frugally, demonstrating that it doesn't cost $80k just to get by.

APowers

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #9 on: March 13, 2019, 08:56:28 AM »
Finally found the statistic that I needed! Not that it will change the course of the discussion, but it's nice to know that I don't have to assume my own successful budget and have people tell me "it will never work".

Federal Reserve stats: Among households with income from $40k-100k, 55% reported spending less than they earned. Even more households spend less than they earn at the higher income levels. I already know from Census data that most people are in >$40k income households.

So even following whatever budgets they feel like, more people than not have income greater than their expenses.

TheContinentalOp

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #10 on: March 13, 2019, 09:20:47 AM »
Most people push themselves to their personal Malthusian limit. That's why you see these stories about how a ridiculously high percentage of people can't handle a U$400 car repair.

Is it possible to save/invest on a small income? Sure

Will most people on a small income save/invest? No

Will most people on a large income save/invest? No
« Last Edit: March 13, 2019, 09:22:42 AM by TheContinentalOp »

MaaS

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #11 on: March 13, 2019, 09:47:29 AM »
There are often people who will pull examples from the far end of one spectrum and extrapolate them to a broader group.  IMO, it's generally done to justify ones own actions.

For example, if I live in a city and don't eat healthy food, I could easily pull some niche stats on food deserts. I can then use these stats in a debate to prove that everyone doesn't have access to healthy, affordable food. And since this is true, clearly the problem is with society and not me. Whether I live in a food desert isn't relevant.

I agree that your statement is statistically correct. But, it's not worth arguing over IMO. When it comes to issues like money, many who aren't real victims prefer to live believing that they are.

FireryFIRE

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #12 on: March 13, 2019, 10:31:11 AM »
I feel the frustration of your post haha. I feel like lots of members have these types of arguments/discussions with the average person. They get so fired up trying to argue with you that it's not possible when we know full well that it is. People don't want to hear the truth because they don't want to destroy their own illusions.

I literally just had an argument with someone yesterday about how "it's not possible" to save enough to retire early and have the same lifestyle as someone who retires at "normal" retirement age. And at the rate he was saving  (8%/year including employer match) I'll have wayyyyy more money than him at age 65 lol.

I've accepted the fact that some people just won't listen. No matter how many accurate facts you give them. Know that we are here for you and we know the truth!

dcheesi

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #13 on: March 13, 2019, 12:11:48 PM »
Saving/investing is "absurd" for some people for the same reasons that dieting is "impossible." Many people are simply not capable of weighing options and making good long term decisions. It's possible they could learn that skill but they are not willing. They don't want to admit this is their choice so they convince themselves that they have no choice.

You can throw facts at a person like that all day long and it won't help, so don't waste your energy. As Thomas Paine said, arguing with someone who has abandoned the use of reason is like administering medicine to the dead.
Interesting analogy there. I found effective dieting difficult, until I found a system that allowed me to reliably quantify the benefits & harms of the choices I was making, and add them up over time. Previously, I would try to make reasoned trade-offs and compromises, but everything was a judgement call, and it was easy to justify a lot of bad by the little bit of good that came with it ("it's got healthy vegetables; who cares if they're drenched in butter?" etc.). But once I had a simple quantitative metric that made sense, my nerd-ish drive to optimize (and my natural "cheapness") took over, and the pound have flown off.

Similarly, I wonder how many people don't have the mental tools to deal with money/scarcity? It was always easy for me, since there was a handy valuation metric ($) attached to every choice. But not everyone's mind works the same way, and it seems like even with that common metric, some people are just as adrift in the money realm as I used to be in the diet/nutrition realm. The question, of course, is what tools/training would work for these folks, if any?
« Last Edit: March 13, 2019, 12:13:56 PM by dcheesi »

Maenad

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #14 on: March 13, 2019, 01:26:17 PM »
Plus, decision fatigue is a real thing. There's a ton of things vying for our attention in all of our lives, and some things will fall by the wayside.

For some people, managing their finances is one of those things. We all get enough guilt heaped on us for all the things we're "supposed" to be doing in order to be "successful adults". Bringing up something that they're not doing is going to make them defensive.

So I agree with others, don't have these arguments, they'll never go anywhere useful, and you run the risk of giving people a bad impression. You can always offer to help - once - if someone laments their circumstances, but otherwise it's a MYOB situation.

Parizade

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #15 on: March 13, 2019, 07:26:26 PM »
Interesting analogy there. I found effective dieting difficult, until I found a system that allowed me to reliably quantify the benefits & harms of the choices I was making, and add them up over time. Previously, I would try to make reasoned trade-offs and compromises, but everything was a judgement call, and it was easy to justify a lot of bad by the little bit of good that came with it ("it's got healthy vegetables; who cares if they're drenched in butter?" etc.). But once I had a simple quantitative metric that made sense, my nerd-ish drive to optimize (and my natural "cheapness") took over, and the pound have flown off.

Similarly, I wonder how many people don't have the mental tools to deal with money/scarcity? It was always easy for me, since there was a handy valuation metric ($) attached to every choice. But not everyone's mind works the same way, and it seems like even with that common metric, some people are just as adrift in the money realm as I used to be in the diet/nutrition realm. The question, of course, is what tools/training would work for these folks, if any?

You say you found dieting difficult until you found a system that worked for you. I would say I found saving and investing difficult until I found a system that worked for me. We both accepted that our chosen task was difficult and kept trying to find a way to make it work until we succeeded. Not all people have that ability/skill/personality. Some people, when faced with a difficult task, say to themselves "this task is difficult, therefore I don't want to do it, therefore I will say it's absurd, ridiculous, or impossible and stop trying." I felt like that's the kind of person Apowers was dealing with and it influenced my answer because I personally get very frustrated with that attitude too.

Tonight I volunteered at my local food shelf and was reminded that some people just flat out don't have the means to save any money. They are dependent on programs and charities to help them meet basic needs and all their energy is used to maintain some semblance of human dignity and find a shred of joy here and there (Oh look, cookies on the "free" shelf, it's a good day!) So I felt the need to soften my response here a bit. It really would be absurd and disrespectful to talk to the food shelf clients about investments.

AnnaGrowsAMustache

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #16 on: March 14, 2019, 02:10:26 AM »
Most people got the memo on 'earn more' but completely missed all the news about 'spending less', especially when it comes to their base expenses. With that mindset, it actually is impossible to save on $35,000.

Linda_Norway

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #17 on: March 14, 2019, 02:55:38 AM »
Society is also normalizing spending more than you own. There are so many adds for buying stuff now, pay later. Credit cards are totally normal (not only for the cashback, but for the option to pay later). I think some young people might not be so familiar with the concept of saving first and buying later, if your parents didn't teach you that. There is also the tax reduction on mortgages, which often is interpreted as "it is good to have a mortgage, don't pay it off".

Here in Norway we have had TV programs where people in deep debt got help from an expert to normalize their economy again. We currently have a program where a financial expert helps famous people to save more (for a hairy goal). I think such programs might help somewhat to at least to teach people that going into deep debt is not normal and that saving is a natural thing to do, and that saving is totally possible for everyone.

I also think that most people are used to their level of luxury and don't want to let go of it. For example, most of my colleagues have noticed that I bring lunch from home. Some even say occasionally that today's lunch is not worth what I paid for it, it should have brought food from home. They also know that I spend my summer vacations camping. They cannot imagine giving up their hotel vacations and go camping instead. Camping is primitive, and suited for students without money. Most people also don't like to drive an old car. My DH is suggesting that our next car should be one with little (electronic) extras as it is those extras that tend to break easily and need expensive repairs. "Basic" cars often survive longer. I was thinking that I really appreciate our car's electronic memory for the driver seat for 2 persons. But I also realized that before we had that, we also managed. So even for me as a Mustachian person, it is a matter of making deliberate reductions of luxury that I'm used to and I am not always very motivated to do that.

Leisured

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #18 on: March 14, 2019, 04:17:04 AM »
I am Australian, and have observed that many people have an antipathy to the idea of investing and receiving unearned income, and see investors as morally corrupt. I see unearned income as a good idea.

Many people deliberately spend as much as they earn, so if they have a few thousand dollars in the bank they feel they re doing something wrong, so they will spend that money, on anything.  My late father behaved that way.

In Australia we have the social phenomenon of the Battler, who lives payday to payday as policy, and feels morally superior for doing so.


Hula Hoop

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #19 on: March 14, 2019, 06:44:07 AM »
I just had this conversation with a colleague who earns a lot more than me.  She said "it's impossible to save anything at the end of the month on this salary".  I said "I manage" and she looked at me like I was insane.  I earn a lot less than her and my husband also earns a lot less than her partner.  We each have two kids and she lives rent-free in a family owned apartment.  We talked about it and she owns a car, loves eating out, recently renovated the apartment, loves new clothes, eats at the cafeteria every day and never buys anything second hand.  It's possible that I opened her mind as she said that she really admires the fact that I buy second hand things for my kids, don't own a car and only eat out (cheaply) once a month.  I told her that it's amazing what these little things can add up to.  Maybe a future mustachian?

ministashy

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #20 on: March 14, 2019, 06:55:28 AM »
I honestly think that most people have to be 'scared straight'.  That they have to have something come along that threatens their current lifestyle in a very real and permanent fashion, before they start getting serious about saving for a rainy day.  At least, I know it was that way for me.

Sadly, there are also a lot of people that even when faced with a real financial crisis, will continue to dig their hole even deeper.  I don't know of any way to reach them.

MikeBT

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #21 on: March 14, 2019, 06:59:52 AM »
I am Australian, and have observed that many people have an antipathy to the idea of investing and receiving unearned income, and see investors as morally corrupt. I see unearned income as a good idea.

Many people deliberately spend as much as they earn, so if they have a few thousand dollars in the bank they feel they re doing something wrong, so they will spend that money, on anything.  My late father behaved that way.

In Australia we have the social phenomenon of the Battler, who lives payday to payday as policy, and feels morally superior for doing so.
I am also Australian, and I concur with this view. In Australia the top 20% of earners pay over 2/3 of all income tax; we have the world's highest minimum wage (no seriously, check it out) and the OECD's most progressive system of taxes and transfers. Thus, we are one of the world's best and most efficient redistributive welfare states.

Yet people still whinge about the rich, and about inequality, and about unfairness - even though Australia is about as good as you can get as a platform for making something of yourself.

Investors are tackled non-stop with taxes. On an annual basis I pay rates ($2,500), land tax ($4,500), GST (approx $20,000 - $25,000), income tax ($45,000 - 60,000+) yet I am still made out to be one of the bad guys. And the poor, the heavenly poor, are beatified.

It's sad, and it's just evidence of our Tall Poppy Syndrome.

DadJokes

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #22 on: March 14, 2019, 07:20:56 AM »
I had never heard of Tall Poppy Syndrome before. I thought it was going to be some Australian slang before looking it up.

LadyMuMu

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #23 on: March 14, 2019, 07:24:27 AM »
When I look back, I had two good role models for folks who saved well and lived within their means. First were one set of grandparents. Single earner, lived in a 3br/1ba house that they built for most of their lives. Grandpa was an executive at a small oil refinery, so made good money for small town. They didn't spend lavishly because that would have been gauche. They did lots of RV traveling and cruises in retirement because they always were happy with simple things (food, clothes, etc.)

The other was a family friend who babysat me after school one year. Single earner--he delivered milk. They had a small 2br, 1ba house. His big hobby was gardening and he grew nearly all their non-meat food. She volunteered at the local hospital and kept house. Meals were simple. Vacations were going back to PA to see family every 3 years or so. When they retired, they were able to move to a small community in Florida for their last 15 years.

The common factor was that both had absolutely no interest in "fashion" whether it be clothing, home decor, or electronics. They had hobbies that were low cost or produced something of value to them (hunting, gardening, music). They volunteered in their communities. Vacations were a special thing, not an expectation anytime school closed. Other common factor: they lived through the Depression.

Cool Friend

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #24 on: March 14, 2019, 07:26:42 AM »
I think it's important to remember that there are as many life situations as there are people.  Yes, many people living paycheck-to-paycheck are doing so because they spend everything they make (or more) on things they don't need.  And yes, many people living paycheck-to-paycheck are not profligate spenders but have low income and fixed costs that eat up all (or virtually all) of that income. 

It's also important to remember that people's beliefs and attitudes about are often developed during the formative years of our lives.  Those kinds of beliefs are very resistant to change.  Not impossible to change, but difficult.  Not to mention the intense programming from advertisements that people in the developed world are bombarded with from birth as well.

I know some others here not inclined towards sympathy for people still stuck in the consumer sucka lifestyle, but I am.  I would guess that most of us here haven't lived our whole lives with our present ideas about money/saving/spending (if you have, count your blessings).  I've also noticed that many of us have an area or two of unnecessary spending on consumer goods that we consider worthwhile.  We're not all that different, I don't think, and I would personally be cautious to take a self-righteous stance.

EngagedToFIRE

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #25 on: March 14, 2019, 07:40:49 AM »
Finally found the statistic that I needed! Not that it will change the course of the discussion, but it's nice to know that I don't have to assume my own successful budget and have people tell me "it will never work".

Federal Reserve stats: Among households with income from $40k-100k, 55% reported spending less than they earned. Even more households spend less than they earn at the higher income levels. I already know from Census data that most people are in >$40k income households.

So even following whatever budgets they feel like, more people than not have income greater than their expenses.

I don't know many people, at any income level, that couldn't find some savings, somewhere.  Even those in poverty often spend too much on food and buy unnecessary items.  Go out to eat, even if it's McDonalds.  There is almost always dollars to be saved, somewhere.  You said it could be hard to save, but not impossible.  That's factually true.  Even a person in poverty could save $4 by not going to McDonalds.

Isn't that what this entire site is about?  Finding those savings?

JanetJackson

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #26 on: March 14, 2019, 08:00:02 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

True, but I think it's a little more nuanced than that.

The truths that underpin most people's financial realities can be utterly terrifying to actually acknowledge. The numbers are kind of ugly when you actually look at them compared to what you might expect.

Most people expect that getting a good education and working hard in a "good" job will comfortably produce more than enough to live a "normal" comfortable middle-class lifestyle without the need to pay too close attention to the details. They perceived their parents, their friends parents, TV parents, etc, to effortlessly maintain this standard through "normal" careers, and they see only extreme options like very early retirement or very fancy lifestyles as requiring any special attention to finances.

Meanwhile, when you look closely, you find that a lot of "normal middle class" lifestyles are only affordable on extremely high incomes, especially if the person wants to be able to manage it without paying close attention. I remember being utterly shocked by how plain "normal" the lifestyle of people making a quarter million was. Meanwhile the guy making 400K lived a life that I would have expected for someone who made ~150K. I vividly recall being shocked at just how much money it took to live just marginally nicer versions of middle class life.

I remember assuming that making 30-40% more than the median should put someone into a very nice lifestyle position...yeah...not so much.

People operate under a collection of "givens" that are often grossly erroneous.
Challenging people's givens is much harder than challenging what choices they've made within their established paradigm.
Altering givens is wildly more uncomfortable than simply choosing a different option.

It's the same with health and lifestyle.
It takes A LOT to change people's paradigms from "I'm young and healthy and won't get sick" to "holy shit! My chances of serious illness are actually pretty fucking high!" I can't tell you how many people I've seen go into total fucking meltdown because they have to have a biopsy of a lump or because someone from their highschool died. I remember saying to my brother "you do realize that the healthier you are, the MORE likely you are to die of cancer, right???". The poor guy is still fucked up over that...

Challenging givens and restructuring paradigms is TREMENDOUSLY uncomfortable and can be downright traumatic.
Some of us respond to trauma very productively, some of us just retreat further into denial.

To those of us with paradigms predicated on realistic financial givens, how to spend and how not to spend is obvious. It makes it seem like those who spend irresponsibly are idiotic. Meanwhile, they are literally in denial about what the basis of their own financial reality is and the actual numbers are to be avoided because they risk toppling their entire paradigm if they look too closely at them.

Besides, saving is not the "slightly harder" choice. Working longer in high stress jobs with less flexibility due to unremitting financial stress is the MUCH harder option, they just literally don't accurately see the trade offs that they are making.

Thank you.

Also thank you @Cool Friend and a few others here who have expressed understanding and empathy for poor or low income folks.

remizidae

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #27 on: March 14, 2019, 08:14:48 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

True, but I think it's a little more nuanced than that.

The truths that underpin most people's financial realities can be utterly terrifying to actually acknowledge. The numbers are kind of ugly when you actually look at them compared to what you might expect.

Most people expect that getting a good education and working hard in a "good" job will comfortably produce more than enough to live a "normal" comfortable middle-class lifestyle without the need to pay too close attention to the details. They perceived their parents, their friends parents, TV parents, etc, to effortlessly maintain this standard through "normal" careers, and they see only extreme options like very early retirement or very fancy lifestyles as requiring any special attention to finances.

Meanwhile, when you look closely, you find that a lot of "normal middle class" lifestyles are only affordable on extremely high incomes, especially if the person wants to be able to manage it without paying close attention. I remember being utterly shocked by how plain "normal" the lifestyle of people making a quarter million was. Meanwhile the guy making 400K lived a life that I would have expected for someone who made ~150K. I vividly recall being shocked at just how much money it took to live just marginally nicer versions of middle class life.

I remember assuming that making 30-40% more than the median should put someone into a very nice lifestyle position...yeah...not so much.

People operate under a collection of "givens" that are often grossly erroneous.
Challenging people's givens is much harder than challenging what choices they've made within their established paradigm.
Altering givens is wildly more uncomfortable than simply choosing a different option.

It's the same with health and lifestyle.
It takes A LOT to change people's paradigms from "I'm young and healthy and won't get sick" to "holy shit! My chances of serious illness are actually pretty fucking high!" I can't tell you how many people I've seen go into total fucking meltdown because they have to have a biopsy of a lump or because someone from their highschool died. I remember saying to my brother "you do realize that the healthier you are, the MORE likely you are to die of cancer, right???". The poor guy is still fucked up over that...

Challenging givens and restructuring paradigms is TREMENDOUSLY uncomfortable and can be downright traumatic.
Some of us respond to trauma very productively, some of us just retreat further into denial.

To those of us with paradigms predicated on realistic financial givens, how to spend and how not to spend is obvious. It makes it seem like those who spend irresponsibly are idiotic. Meanwhile, they are literally in denial about what the basis of their own financial reality is and the actual numbers are to be avoided because they risk toppling their entire paradigm if they look too closely at them.

Besides, saving is not the "slightly harder" choice. Working longer in high stress jobs with less flexibility due to unremitting financial stress is the MUCH harder option, they just literally don't accurately see the trade offs that they are making.

Thank you.

Also thank you @Cool Friend and a few others here who have expressed understanding and empathy for poor or low income folks.

I do have sympathy for the poor, but...there aren't that many truly poor people. 75% of Americans make more than $30k. We hear this whining a lot more often from deluded middle-class/rich people who make six figures and still somehow feel sorry for themselves.

APowers

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #28 on: March 14, 2019, 09:12:41 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

True, but I think it's a little more nuanced than that.

The truths that underpin most people's financial realities can be utterly terrifying to actually acknowledge. The numbers are kind of ugly when you actually look at them compared to what you might expect.

Most people expect that getting a good education and working hard in a "good" job will comfortably produce more than enough to live a "normal" comfortable middle-class lifestyle without the need to pay too close attention to the details. They perceived their parents, their friends parents, TV parents, etc, to effortlessly maintain this standard through "normal" careers, and they see only extreme options like very early retirement or very fancy lifestyles as requiring any special attention to finances.

Meanwhile, when you look closely, you find that a lot of "normal middle class" lifestyles are only affordable on extremely high incomes, especially if the person wants to be able to manage it without paying close attention. I remember being utterly shocked by how plain "normal" the lifestyle of people making a quarter million was. Meanwhile the guy making 400K lived a life that I would have expected for someone who made ~150K. I vividly recall being shocked at just how much money it took to live just marginally nicer versions of middle class life.

I remember assuming that making 30-40% more than the median should put someone into a very nice lifestyle position...yeah...not so much.

People operate under a collection of "givens" that are often grossly erroneous.
Challenging people's givens is much harder than challenging what choices they've made within their established paradigm.
Altering givens is wildly more uncomfortable than simply choosing a different option.

It's the same with health and lifestyle.
It takes A LOT to change people's paradigms from "I'm young and healthy and won't get sick" to "holy shit! My chances of serious illness are actually pretty fucking high!" I can't tell you how many people I've seen go into total fucking meltdown because they have to have a biopsy of a lump or because someone from their highschool died. I remember saying to my brother "you do realize that the healthier you are, the MORE likely you are to die of cancer, right???". The poor guy is still fucked up over that...

Challenging givens and restructuring paradigms is TREMENDOUSLY uncomfortable and can be downright traumatic.
Some of us respond to trauma very productively, some of us just retreat further into denial.

To those of us with paradigms predicated on realistic financial givens, how to spend and how not to spend is obvious. It makes it seem like those who spend irresponsibly are idiotic. Meanwhile, they are literally in denial about what the basis of their own financial reality is and the actual numbers are to be avoided because they risk toppling their entire paradigm if they look too closely at them.

Besides, saving is not the "slightly harder" choice. Working longer in high stress jobs with less flexibility due to unremitting financial stress is the MUCH harder option, they just literally don't accurately see the trade offs that they are making.

Thank you.

Also thank you @Cool Friend and a few others here who have expressed understanding and empathy for poor or low income folks.

I do have sympathy for the poor, but...there aren't that many truly poor people. 75% of Americans make more than $30k. We hear this whining a lot more often from deluded middle-class/rich people who make six figures and still somehow feel sorry for themselves.

Don'tcha know that it's impossible for anyone to make ends meet on $30k/yr!? I can't, nor can any of my friends. We're constantly poor and will never make it. Someone has to make at least $60k to be able to live and save a tiny bit!

remizidae

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #29 on: March 14, 2019, 09:33:14 AM »
Sadly, if you give most people two choices, the easy wrong choice or the slightly harder correct choice, they will choose the easy wrong choice 99% of the time. Most people donít look at their lifestyle and finances with the cold logic people on this board do. I wish more people did, but not everyones brain is wired for it.

True, but I think it's a little more nuanced than that.

The truths that underpin most people's financial realities can be utterly terrifying to actually acknowledge. The numbers are kind of ugly when you actually look at them compared to what you might expect.

Most people expect that getting a good education and working hard in a "good" job will comfortably produce more than enough to live a "normal" comfortable middle-class lifestyle without the need to pay too close attention to the details. They perceived their parents, their friends parents, TV parents, etc, to effortlessly maintain this standard through "normal" careers, and they see only extreme options like very early retirement or very fancy lifestyles as requiring any special attention to finances.

Meanwhile, when you look closely, you find that a lot of "normal middle class" lifestyles are only affordable on extremely high incomes, especially if the person wants to be able to manage it without paying close attention. I remember being utterly shocked by how plain "normal" the lifestyle of people making a quarter million was. Meanwhile the guy making 400K lived a life that I would have expected for someone who made ~150K. I vividly recall being shocked at just how much money it took to live just marginally nicer versions of middle class life.

I remember assuming that making 30-40% more than the median should put someone into a very nice lifestyle position...yeah...not so much.

People operate under a collection of "givens" that are often grossly erroneous.
Challenging people's givens is much harder than challenging what choices they've made within their established paradigm.
Altering givens is wildly more uncomfortable than simply choosing a different option.

It's the same with health and lifestyle.
It takes A LOT to change people's paradigms from "I'm young and healthy and won't get sick" to "holy shit! My chances of serious illness are actually pretty fucking high!" I can't tell you how many people I've seen go into total fucking meltdown because they have to have a biopsy of a lump or because someone from their highschool died. I remember saying to my brother "you do realize that the healthier you are, the MORE likely you are to die of cancer, right???". The poor guy is still fucked up over that...

Challenging givens and restructuring paradigms is TREMENDOUSLY uncomfortable and can be downright traumatic.
Some of us respond to trauma very productively, some of us just retreat further into denial.

To those of us with paradigms predicated on realistic financial givens, how to spend and how not to spend is obvious. It makes it seem like those who spend irresponsibly are idiotic. Meanwhile, they are literally in denial about what the basis of their own financial reality is and the actual numbers are to be avoided because they risk toppling their entire paradigm if they look too closely at them.

Besides, saving is not the "slightly harder" choice. Working longer in high stress jobs with less flexibility due to unremitting financial stress is the MUCH harder option, they just literally don't accurately see the trade offs that they are making.

Thank you.

Also thank you @Cool Friend and a few others here who have expressed understanding and empathy for poor or low income folks.

I do have sympathy for the poor, but...there aren't that many truly poor people. 75% of Americans make more than $30k. We hear this whining a lot more often from deluded middle-class/rich people who make six figures and still somehow feel sorry for themselves.

Don'tcha know that it's impossible for anyone to make ends meet on $30k/yr!? I can't, nor can any of my friends. We're constantly poor and will never make it. Someone has to make at least $60k to be able to live and save a tiny bit!

See, in *my* area you can make $150k and still be completely unable to save....or so they say. :)

MikeO

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #30 on: March 14, 2019, 09:36:27 AM »
keeping up with the Jone's is what kills most.

but more importantly, I'm wondering....


why do you even give a hoot?  Why do you feel the need to spend so much time trying to convince someone who obviously doesn't get it that there is a different way of doing things? (I don't want to say "better" as better is subjective.)

personally, I like helping those that want the help.  I show friends and family my process and methods and if they want it, I'll coach them on investing, and I've done this very thing to a few who are happy seeing their nest egg grow.   But the truth be told most want what they are used to.  They might like the idea that I'm going to be FI much younger than them but they lack the desire to take the necessary steps to get there, which is fine too.  Not my problem.


now for full disclosure we don't live on 30k a year either.  We could, but we spend almost double that each year, why?  well we could be super frugal and get there even sooner but I want to live today, because I've seen first hand that tomorrow doesn't always come. so we enjoy life, travel a lot, and just get out there and do things all the time which costs money. 

I also consider myself very fortunate (not lucky because I worked for my life, it wasn't given to me).  We make plenty of money to live on 50-60k a year and still invest 80K+ every year.  If we only made 30k a year trying to really "live" life and invest would be difficult.   

JMHO

MilesTeg

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #31 on: March 14, 2019, 09:51:23 AM »
I am Australian, and have observed that many people have an antipathy to the idea of investing and receiving unearned income, and see investors as morally corrupt. I see unearned income as a good idea.

Many people deliberately spend as much as they earn, so if they have a few thousand dollars in the bank they feel they re doing something wrong, so they will spend that money, on anything.  My late father behaved that way.

In Australia we have the social phenomenon of the Battler, who lives payday to payday as policy, and feels morally superior for doing so.
I am also Australian, and I concur with this view. In Australia the top 20% of earners pay over 2/3 of all income tax; we have the world's highest minimum wage (no seriously, check it out) and the OECD's most progressive system of taxes and transfers. Thus, we are one of the world's best and most efficient redistributive welfare states.

Yet people still whinge about the rich, and about inequality, and about unfairness - even though Australia is about as good as you can get as a platform for making something of yourself.

Investors are tackled non-stop with taxes. On an annual basis I pay rates ($2,500), land tax ($4,500), GST (approx $20,000 - $25,000), income tax ($45,000 - 60,000+) yet I am still made out to be one of the bad guys. And the poor, the heavenly poor, are beatified.

It's sad, and it's just evidence of our Tall Poppy Syndrome.

I can't speak for down under but in the U.S. dollars earned through labor are taxed at roughly twice (sometimes 3x or more!) the rate of dollars 'earned' through investment. This is, in my opinion, a profain absurdity. It should be exactly the opposite, or at the very least equal.

And I'm one of those folks that derives most of my income through investment.
« Last Edit: March 14, 2019, 09:54:52 AM by MilesTeg »

APowers

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #32 on: March 14, 2019, 09:53:12 AM »
keeping up with the Jone's is what kills most.

but more importantly, I'm wondering....


why do you even give a hoot?  Why do you feel the need to spend so much time trying to convince someone who obviously doesn't get it that there is a different way of doing things? (I don't want to say "better" as better is subjective.)

personally, I like helping those that want the help.  I show friends and family my process and methods and if they want it, I'll coach them on investing, and I've done this very thing to a few who are happy seeing their nest egg grow.   But the truth be told most want what they are used to.  They might like the idea that I'm going to be FI much younger than them but they lack the desire to take the necessary steps to get there, which is fine too.  Not my problem.


now for full disclosure we don't live on 30k a year either.  We could, but we spend almost double that each year, why?  well we could be super frugal and get there even sooner but I want to live today, because I've seen first hand that tomorrow doesn't always come. so we enjoy life, travel a lot, and just get out there and do things all the time which costs money. 

I also consider myself very fortunate (not lucky because I worked for my life, it wasn't given to me).  We make plenty of money to live on 50-60k a year and still invest 80K+ every year.  If we only made 30k a year trying to really "live" life and invest would be difficult.   

JMHO



But seriously, the person posting is someone I consider a friend, and who I know to have a reputation as a Class A researcher and advocate for fact-based living. Yet, here she was, making claims that are patently false, according to the actual data. It seemed to me that she's a bit emotionally invested in the fact that she and her social circle fall in an "economically disadvantaged" demographic, and that can feel hopeless; I get it. But to generalize that situation as fact for most Americans is wrong, and I thought that she, of all people, would be willing to recognize that.

Then again, I also thought that mentioning that success is possible, as demonstrated by my own modest success, would be helpful and encouraging, but I was clearly wrong about that.

SunnyDays

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #33 on: March 14, 2019, 09:54:53 AM »
I heard someone say at one time that America is the only country where poor people own colour TVs.  (I guess you could now say large screen TVs.)  Anyone in North America or Europe, Australia etc has no real concept of true poverty.  It will always be relative to what others have, and in countries with huge disparities, basically anyone can justify feeling too poor to save.  The expectations of what a middle-class life, or even a working-class life is has gone up tremendously just in my lifetime, and I'm only 58.  When I was a kid, no one my parents knew had more than one car, fancy furniture, went on cruises etc.  Now, you're looked at as failing or an idiot if you don't have or aspire to those things.
I don't think you can convince people they CAN save by throwing statistics at them, because everyone thinks they're an exception.  But mention that all those shoes, the new car, the all-inclusive vacation or whatever they brag about could have fueled their savings might have an impact.  Whenever someone complains to me about their finances and yet are spending up the yinyang, I just comment "Wow, it must be so stressful to live like that."  Most get annoyed with me that I don't "get it," but at least they don't complain to me again!

MikeO

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #34 on: March 14, 2019, 10:04:47 AM »
sometimes you just gotta let em be....

the ones I "love" (sarcasm) are those that are drinking a beer, puffing on a cigarette telling me how they are barely getting by.   I just chuckle internally and walk away.

Just Joe

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #35 on: March 14, 2019, 10:47:30 AM »
Drinking a beer, puffing on a cigarette and watching daytime TV talking about how hard it is to get by. Or - they could DO SOMETHING with all those spare hours... Go mow a yard or rake some leaves or clean a house. Back when i was going to university I started mowing yards and it took off. I was forced to decline work b/c I needed to study. I upped my prices a little, dumped a few customers who were difficult and business was brisk. Didn't get rich but I graduated and had money in my pocket.

Seadog

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #36 on: March 14, 2019, 12:50:06 PM »
I heard someone say at one time that America is the only country where poor people own colour TVs.  (I guess you could now say large screen TVs.)  Anyone in North America or Europe, Australia etc has no real concept of true poverty.  It will always be relative to what others have, and in countries with huge disparities, basically anyone can justify feeling too poor to save.  The expectations of what a middle-class life, or even a working-class life is has gone up tremendously just in my lifetime, and I'm only 58.  When I was a kid, no one my parents knew had more than one car, fancy furniture, went on cruises etc.  Now, you're looked at as failing or an idiot if you don't have or aspire to those things.
I don't think you can convince people they CAN save by throwing statistics at them, because everyone thinks they're an exception.  But mention that all those shoes, the new car, the all-inclusive vacation or whatever they brag about could have fueled their savings might have an impact.  Whenever someone complains to me about their finances and yet are spending up the yinyang, I just comment "Wow, it must be so stressful to live like that."  Most get annoyed with me that I don't "get it," but at least they don't complain to me again!

I really wished more people would travel, especially to some not-so-nice places so they could get a chance to see true poverty. I once flew to Peru through Toronto, and had a night there during a long stopover and used it to visit friends. A few beggars bothered me, and I thought it was ironic that they were dressed better than me, and aside from asking for money, showed no overt signs of poverty and were at least tolerably fed.

Flash forward to Peru. There are beggars down there as well, and 'poor' down there means you don't have shoes, and are rummaging through dumps for useful bits of stuff to sell.

I think that's why Mustachianism just took to me. My mindset was always that for $7, you could buy a fancy coffee at starbucks, or if you are in a third world place, use that money to literally eat survival level food for almost a week. To say that a fancy coffee = staving off starvation for a week is ludicrous.

the barefoot badger

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #37 on: March 14, 2019, 12:54:35 PM »
As Thomas Paine said, arguing with someone who has abandoned the use of reason is like administering medicine to the dead.
Outstanding.  Does he have a twitter account?  ;)

the barefoot badger

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #38 on: March 14, 2019, 01:13:49 PM »
Summary?  Unrealistic or overprivileged idea of what "normal" is = no money left to save. Having fixed ideas about spending habits and a vested interest in not examining them = no money left to save.  Just being butt-stupid = usually no money left to save.  Being influenced or controlled by others who have a say about your income or whose opinion is vitally important to you = possibly no money left to save.  Circumstance you don't know about (helping a poor parent, health problem, whatever) = no money left to save.  Technically, as a first world person with access to enough garbage left over from our wasteful peers that we hardly need to spend money at all,  just about anyone above the poverty line, or perhaps even below it, can save.  But they won't.

Parizade

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #39 on: March 14, 2019, 01:51:42 PM »
As Thomas Paine said, arguing with someone who has abandoned the use of reason is like administering medicine to the dead.
Outstanding.  Does he have a twitter account?  ;)

:-D Wouldn't that be a great blog title? "If Thomas Paine had Twitter"

DadJokes

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #40 on: March 14, 2019, 01:58:39 PM »
I heard someone say at one time that America is the only country where poor people own colour TVs.  (I guess you could now say large screen TVs.)  Anyone in North America or Europe, Australia etc has no real concept of true poverty.  It will always be relative to what others have, and in countries with huge disparities, basically anyone can justify feeling too poor to save.  The expectations of what a middle-class life, or even a working-class life is has gone up tremendously just in my lifetime, and I'm only 58.  When I was a kid, no one my parents knew had more than one car, fancy furniture, went on cruises etc.  Now, you're looked at as failing or an idiot if you don't have or aspire to those things.
I don't think you can convince people they CAN save by throwing statistics at them, because everyone thinks they're an exception.  But mention that all those shoes, the new car, the all-inclusive vacation or whatever they brag about could have fueled their savings might have an impact.  Whenever someone complains to me about their finances and yet are spending up the yinyang, I just comment "Wow, it must be so stressful to live like that."  Most get annoyed with me that I don't "get it," but at least they don't complain to me again!

I really wished more people would travel, especially to some not-so-nice places so they could get a chance to see true poverty. I once flew to Peru through Toronto, and had a night there during a long stopover and used it to visit friends. A few beggars bothered me, and I thought it was ironic that they were dressed better than me, and aside from asking for money, showed no overt signs of poverty and were at least tolerably fed.

Flash forward to Peru. There are beggars down there as well, and 'poor' down there means you don't have shoes, and are rummaging through dumps for useful bits of stuff to sell.

I think that's why Mustachianism just took to me. My mindset was always that for $7, you could buy a fancy coffee at starbucks, or if you are in a third world place, use that money to literally eat survival level food for almost a week. To say that a fancy coffee = staving off starvation for a week is ludicrous.

When my son is older, I want to take him on "reality check" trips. It can be anything from sending him with the church youth to do volunteer work in Haiti, or it can simply be a family vacation to South America that has an added benefit of seeing how the local population lives. I think that will do him a lot of good in life.

I didn't go on any such trips in my childhood. My first reality check was in Afghanistan. I would not recommend that being your first trip out of the country.

mm1970

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #41 on: March 14, 2019, 02:28:17 PM »
I think it's important to remember that there are as many life situations as there are people.  Yes, many people living paycheck-to-paycheck are doing so because they spend everything they make (or more) on things they don't need.  And yes, many people living paycheck-to-paycheck are not profligate spenders but have low income and fixed costs that eat up all (or virtually all) of that income. 

It's also important to remember that people's beliefs and attitudes about are often developed during the formative years of our lives.  Those kinds of beliefs are very resistant to change.  Not impossible to change, but difficult.  Not to mention the intense programming from advertisements that people in the developed world are bombarded with from birth as well.

I know some others here not inclined towards sympathy for people still stuck in the consumer sucka lifestyle, but I am.  I would guess that most of us here haven't lived our whole lives with our present ideas about money/saving/spending (if you have, count your blessings).  I've also noticed that many of us have an area or two of unnecessary spending on consumer goods that we consider worthwhile.  We're not all that different, I don't think, and I would personally be cautious to take a self-righteous stance.
+1 to this and Malkynn.

I have a whole passel of siblings, spaced out over 21 years.  I'd say that 7 of us are pretty damned frugal, and my dad could get blood out of a rock.  I mean, before he died he gave me one of his prized possessions, a copy of Walden.  When he died in 2007 and his house sold shortly thereafter, it still had the multicolored shag carpet that was put in in 1971.

But there are two...for whatever reason...like to spend more (both are the "babies" in some form).  Who knows what it was about them, or their particular spot in the line of family members, that make them like this.  But they've always been kind of like this.

So...even in his 40s, my brother would complain about "never being able to retire".  Well, now he has a state job with a pension, and his military time will count, so he'll be able to retire at 20 years (total).  So yay!  But the fact of the matter is...his house payment was $375/month.  He and his wife love to shop (clothes and cars).  He decided he *hated* his $40k a year job and swapped it for a $25k/year job (essentially "forcing" his wife to keep her $67k a year job, where she worked 12-13 hours a day, 5-6 days a week.)

It was only recently (after he got the state job) that his wife was able to switch to a better schedule with less pay.  They stopped buying SUVs and trucks and Jeeps, and bought two sensible Toyota/ Honda accord types.  Their commutes dropped in half (they were 45 min- 1hour).  He's actually redoing his kitchen HIMSELF.  Complained about the kitchen for YEARS (the house was owned by a couple that were <5' tall, and my brother is over 6'.  The counters are LOW.)  My brother used to work in construction!  But refused to do his own work.  One of his jobs in his 30s was as a truck driver.  He got paid to go to school to get the certification, which required to work for the company for a year.  HATED it, quit after 3 months, and had to pay it all back.

I mean, we are talking decades of bad decisions...they are making progress now (partly, I think, because my mom died and so the flow of "oh I'm short on money" stopped.)

But plenty of other people I know are just freaking poor.

mm1970

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #42 on: March 14, 2019, 02:36:10 PM »
Quote
I do have sympathy for the poor, but...there aren't that many truly poor people. 75% of Americans make more than $30k. We hear this whining a lot more often from deluded middle-class/rich people who make six figures and still somehow feel sorry for themselves.

This quote and a lot of talk about reality checks...I don't know where everyone lives, but I live in Coastal So Cal.

We have a massive homeless problem - I don't have to go ANYWHERE for my son to see poor people.

85% of the school is eligible for free lunch, 20-40% are identified as homeless.  (Which could mean homeless, living in a car, living in a shelter, or living with multiple families in a single apartment.  Which to me, is still poor!)

In short, it doesn't really matter if you make more than $30k if that won't pay for a roof and food and health care. 

It's probably a good place to put this:
https://www.theguardian.com/lifeandstyle/2019/mar/12/poor-broke-difference-poverty-inequality-society


Yep, some people have spending problems.  A lot of people are actually poor.

stoaX

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #43 on: March 14, 2019, 03:00:33 PM »
Quote
I do have sympathy for the poor, but...there aren't that many truly poor people. 75% of Americans make more than $30k. We hear this whining a lot more often from deluded middle-class/rich people who make six figures and still somehow feel sorry for themselves.

This quote and a lot of talk about reality checks...I don't know where everyone lives, but I live in Coastal So Cal.

We have a massive homeless problem - I don't have to go ANYWHERE for my son to see poor people.

85% of the school is eligible for free lunch, 20-40% are identified as homeless.  (Which could mean homeless, living in a car, living in a shelter, or living with multiple families in a single apartment.  Which to me, is still poor!)

In short, it doesn't really matter if you make more than $30k if that won't pay for a roof and food and health care. 

It's probably a good place to put this:
https://www.theguardian.com/lifeandstyle/2019/mar/12/poor-broke-difference-poverty-inequality-society


Yep, some people have spending problems.  A lot of people are actually poor.

I'm in SoCal myself. It has been quite a change over the last 15 years in terms of the number of homeless that you see.  The OC Register did a story about part of the problem. 

Of course, you never know if someone is homeless if they are couch surfing or in way-overcrowded living arrangement. For those people it's an issue of low income and quite expensive housing here.   

https://www.ocregister.com/2017/12/17/are-drug-rehab-centers-fueling-homelessness-in-southern-california/

mathlete

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #44 on: March 14, 2019, 04:00:21 PM »
If you really want to dig in, the BLS publishes household expenditures by income decile, so you can see exactly what each 10% is group is spending money on, and then tell them how they're doing it wrong.

https://www.bls.gov/cex/2017/combined/decile.pdf

It's of course, objectively wrong to say that people cannot afford to save. But I guess, try to understand the point your friends are making, even if they're doing a bad job of making the point. There are hard floors to how much you can spend and still function in society. The bottom decile of households by income, for example, is still spending $10K on housing and $4K on food. And while lower income people certainly can save, the meager savings is also more likely to be wiped out by a medical emergency, or needing new tires or some shit. Because there's hard floors to these costs as well.

mathlete

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #45 on: March 14, 2019, 04:12:18 PM »
https://www.bls.gov/cex/2017/combined/decile.pdf


A trap that I used to fall into was looking at these deciles, or quintiles, and seeing my own story in them just based on the income. After all, I lived and worked and earned and saved in the bottom decile once, and now I'm in the top decile.

But when I was in the bottom quintile, I wasn't 49 years old and supporting myself, and .6 of another person, as the data indicates. I was 18 and in college on a good scholarship because I got good grades. I had no health insurance, but I was young, healthy, and lucky. I had $5K in savings from high school jobs, but that would be nothing against getting a major sickness.

When I was in the 50th-60th percentile, I wasn't 48, with .5 of another earner helping me earn $60K, and supporting 1.1 kids or non-working adults. It was just me, 22 and out of college with a nice job.


Parizade

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #46 on: March 14, 2019, 05:16:21 PM »
A resource that I have found helpful is the MIT Living Wage Calculator. I've followed them for a couple of decades and found their calculations to be very reliable in multiple locations.
[Living Wage Calculator]

You go to the site and select your state and city (or county) and the calculator will display the cost of living breakdown for various family types as well as average income for various job types.

If I look up my own state and county, the cost of living for a single adult is almost exactly what I spend and I think I live a pretty comfortable life. Of course my income is 4x my spending so I have no worries, which makes it that much more comfortable.

So I would look at this very accurate and helpful tool and say anyone whose income is less than or equal to the cost of living for their location would likely not be able to save much or invest any of their money and it would be absurd to suggest it. They will be living paycheck to paycheck and taking advantage of any social benefits they can access.

However, if someone is earning more than a living wage for their location and they are choosing to spend that extra money on consumer crap and then complaining about being broke,  I think it is fair to suggest to them that saving the extra might be a better plan. They of course would have every right to tell you to f*ck off so be prepared for that reaction.

HBFIRE

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #47 on: March 14, 2019, 05:35:31 PM »
Americans for whatever reason are extremely bad with money.  It's just cultural consumerism addiction.  Very common for immigrants to come here and save huge amounts earning the same lower wages as everyone else.   I see this all the time in SoCal.

Not There Yet

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #48 on: March 14, 2019, 05:50:39 PM »
Quote
Americans for whatever reason are extremely bad with money.  It's just cultural consumerism addiction.  Very common for immigrants to come here and save huge amounts earning the same lower wages as everyone else.   I see this all the time in SoCal.

I often wonder if this is a major reason so many Americans dislike immigrants.  Immigrants prove so many of cherished American beliefs wrong!

APowers

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Re: Saving/investing is absurd and ridiculous for most people!
« Reply #49 on: March 14, 2019, 06:41:26 PM »
A resource that I have found helpful is the MIT Living Wage Calculator. I've followed them for a couple of decades and found their calculations to be very reliable in multiple locations.
[Living Wage Calculator]

You go to the site and select your state and city (or county) and the calculator will display the cost of living breakdown for various family types as well as average income for various job types.

If I look up my own state and county, the cost of living for a single adult is almost exactly what I spend and I think I live a pretty comfortable life. Of course my income is 4x my spending so I have no worries, which makes it that much more comfortable.

So I would look at this very accurate and helpful tool and say anyone whose income is less than or equal to the cost of living for their location would likely not be able to save much or invest any of their money and it would be absurd to suggest it. They will be living paycheck to paycheck and taking advantage of any social benefits they can access.

However, if someone is earning more than a living wage for their location and they are choosing to spend that extra money on consumer crap and then complaining about being broke,  I think it is fair to suggest to them that saving the extra might be a better plan. They of course would have every right to tell you to f*ck off so be prepared for that reaction.

For my family/work situation here in CO:
They're suggesting that transportation costs are ~$850/month. Not sure how I would go about spending that without having a fancypants car + payment.
Also, >$850/month for food?

These are the kinds of things that make me wonder about the accuracy of the rest of the numbers that I can't verify the accuracy of.