Overheard at Work 2

[RetiredAt63]

Alright, I have a shorty from this week:

Coworker is peeved about last year's 3% raise. Says that they don't care about how much compensation is covered by 401k matching automatic deposits or the ESOP program, that the salary is the only thing that matters. Verbatim: "I don't care about retirement, I want the money now." I asked what their comparison salary research was showing for a wage gap, they said they haven't looked into it.


Eeesh.

 Well I'm sure they'll have a comfortable retirement with that mindset...

All one week of it.     ;-)

[CTEC_Stache]

This may not be too big of an "overheard at work" but I have one from a few years ago.

I am a teacher in a state with a rather "safe" pension. As such myself and my colleagues have access to a 403(b), Roth 403(b), 457, and obviously both IRA options. It is pretty easy to retire at a normal age of 60 with minimal personal investment due to our pension.

A couple of years ago the topic of the lottery came up between a few co-workers. Someone asked, "How much would you have to win today to be able to retire." I was only 28 and I said something to the tune of $2 mil could provide a pretty comfortable life for another 60 years if I was careful.

Two others, both in their 50s, were blown away by my answer and said if they got $2 mil today they wouldn't be able to retire. I tried to explain to them just how much money a year you can get from $2 mil in perpetuity if you adhere to a conservative SWR. It was like talking to a brick wall.

$2 million would likely provide nearly their entire salary. If they couldn't afford to retire on that then how do the manage to live currently?

My thoughts exactly. Not sure they understand how any of this works haha.

And why should they? Really, when those people were getting hired, pensions were normal for a lot of Americans. Even now, with the market on a crazy tear for the past 12 years, only ~ 50% of Americans have ANYTHING invested in the stock market.

For my mom, single divorcee with three kids in the 1970's, she couldn't even get an account with the WATER company; she had to have her dad co-sign the account when my dad left!!!

We are WEIRD. I think we forget that sometimes. But most people don't think about the stock market as accessible, or trustworthy, or even something that middle class folks participate in...

Good point, I don't really consider myself very mustachian (I'm working on it). Regardless, it seems that I have a very unique mindset on investing, retirement, spending, and saving when compared to my co-workers and many of my friends and family.

[Siebrie]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

[JoePublic3.14]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

Meanwhile the president compiles a list of potential investors for their soon-to-be-started ponzi/mlm scheme.

[Kris]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

WTF???

God, it is face-palmingly insane to me to hear about people who cannot manage to scrape together enough will-power to put an amount of money in a savings account, but can do this.

For some reason, it reminds me of a friend who is a teacher, and so bad with money that I have had to distance myself from her because her life stresses me out so much. She gets paid 9 months out of the year, but does not put aside the money every month to carry her through the three months of the summer. Instead, she lives off of credit cards all summer, going into debt, and then has to pay those cards off over the course of the next year, including the interest of course. But she never quite manages to pay the whole thing off, so she still has a balance when the next summer comes around… lather, rinse, repeat…

[charis]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

WTF???

God, it is face-palmingly insane to me to hear about people who cannot manage to scrape together enough will-power to put an amount of money in a savings account, but can do this.

For some reason, it reminds me of a friend who is a teacher, and so bad with money that I have had to distance myself from her because her life stresses me out so much. She gets paid 9 months out of the year, but does not put aside the money every month to carry her through the three months of the summer. Instead, she lives off of credit cards all summer, going into debt, and then has to pay those cards off over the course of the next year, including the interest of course. But she never quite manages to pay the whole thing off, so she still has a balance when the next summer comes around… lather, rinse, repeat…

I have a friend who casually mentioned that she does this as a school staff member on a 10 month pay schedule. I was shocked! Her monthly pay only just covers spending during the school year. She tries to pay the monthly balance on time to avoid interest, but it creates a cycle of always being a month behind and never saving anything.

[SailingOnASmallSailboat]

We had a teacher friend who did this out of college. Buy all the things during the school year, pay them off (mostly) with extra work during the summer. She bought a brand new car on graduation (when she had a job lined up for the fall). She could not understand at all why we kept our beater cars and the furniture we'd scooped up from the side of the road on move-out weekend and rarely ate out; she also could not understand at all how we could possibly afford to take 3 years off (with a completely paid off boat) to sail the Eastern Caribbean after only 3 years of working.

[ixtap]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

WTF???

God, it is face-palmingly insane to me to hear about people who cannot manage to scrape together enough will-power to put an amount of money in a savings account, but can do this.

For some reason, it reminds me of a friend who is a teacher, and so bad with money that I have had to distance myself from her because her life stresses me out so much. She gets paid 9 months out of the year, but does not put aside the money every month to carry her through the three months of the summer. Instead, she lives off of credit cards all summer, going into debt, and then has to pay those cards off over the course of the next year, including the interest of course. But she never quite manages to pay the whole thing off, so she still has a balance when the next summer comes around… lather, rinse, repeat…

I knew this guy at a restaurant job in college. He worked more hours than me, as he wasn't a student, but he borrowed $20 from me a few days before payday, almost every time. As a grad student, I had two friends with the same problem. Always ran out of money just before their student loan checks came. One had worked in their career for nearly a decade before coming to grad school vs the one year I worked between degrees.

[LennStar]

Not my work, and about 25 years ago....:

my very unmustachian friend lives and works in the UK, and she told me she had joined a 'Christmas Club'. I asked her what she meant, thinking it was similar to a Secret Santa, but it turned out to be an annual savings programme, where people would pay GBP10 a month to the 'President' of the Club, and then receive GBP110 in December, right on time for their Christmas shopping. The 'President' would keep GBP10 as a fee. My friend thought this was an excellent opportunity, because otherwise she wouldn't save at all.

WOW!
I don't have a thing for Christmas, but suddenly I want to be the president of the biggest Christmas club there is!
Money lenders, banksters and Christmas club presidents. What a group!

[talltexan]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

[ixtap]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

[OtherJen]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

Yeah, I remember going to the bank with my grandma in the 80s and seeing the signs for Christmas Club accounts. In retrospect, it seems like it was a cross between a savings account and a short-term CD: you put money in weekly or monthly, and it accrued interest, but you couldn't withdraw it without penalty until a set date.

[PMG]

It’s very different but makes me think of “layaway” programs.  Do stores still do those? I heard some story at work recently about a local philanthropist paying off a lot of layaway accounts at Christmas time.

[Rural]

Our bank still has a Christmas club, but then it's small, local, and pretty old school.

[hernandz]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

In a number of cultures it is common to use a form of peer-to-peer lending/savings.  I am used to the word "tanda" in the hispanic world, but "su-su" is used in other parts of the Caribbean. One organizes a group. Each puts in a set amount monthly.  Each month, a different member of the group is given the collected pot. It is common to use the money for a side hustle, but also for social obligations. It generally doesn't pay interest, but it generally considered easier than saving on your own, especially for the unbanked. Social pressure of disappointing a group of people you know are counting on you generally keeps people depositing month after month. In some instances, a member of the group may take a fee for the bookkeeping.

[Imma]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

In a number of cultures it is common to use a form of peer-to-peer lending/savings.  I am used to the word "tanda" in the hispanic world, but "su-su" is used in other parts of the Caribbean. One organizes a group. Each puts in a set amount monthly.  Each month, a different member of the group is given the collected pot. It is common to use the money for a side hustle, but also for social obligations. It generally doesn't pay interest, but it generally considered easier than saving on your own, especially for the unbanked. Social pressure of disappointing a group of people you know are counting on you generally keeps people depositing month after month. In some instances, a member of the group may take a fee for the bookkeeping.

Where I live (the NL) carnival is celebrated and it's a massive event with days of drinking. Many bars offer regulars the option of putting away a little bit of money every week so they have a lot of beer money on carnival Friday. Often in the form of an old fashioned wooden box with many little slots in them, every regular gets their own slot. People throw in money every week until carnival (or sometimes the local fair or end of year). It's actually an important part of the cultural heritage of working class people, factory and farm workers and the like. They did not have access to bank accounts like we do.

[stylesjl]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

In a number of cultures it is common to use a form of peer-to-peer lending/savings.  I am used to the word "tanda" in the hispanic world, but "su-su" is used in other parts of the Caribbean. One organizes a group. Each puts in a set amount monthly.  Each month, a different member of the group is given the collected pot. It is common to use the money for a side hustle, but also for social obligations. It generally doesn't pay interest, but it generally considered easier than saving on your own, especially for the unbanked. Social pressure of disappointing a group of people you know are counting on you generally keeps people depositing month after month. In some instances, a member of the group may take a fee for the bookkeeping.

There is another big reason these kinds of savings systems are used as well.

In many cultures certain members of the household might have a near unfettered social right to take the money in the family and spend it on whatever. For example the husband often has the authority to take the money of his wife and children to spend it on whatever he wants. And so if the money is at home or in a bank he can easily take it, but if it is kept with other members the community for safekeeping then it becomes a lot harder to demand access to the money without good reason.

On top of that of course the other big reason to use these savings groups other than the lack of access to banks is that often banks are not trusted due to corruption or an inability of many to understand what good a bank will do for them (especially if there are cultural/language barriers).

[Siebrie]

My sister-in-law is African, living in The Netherlands, and has joined a group of women with a similar background to meet once a month and pay into a savings pot, which is called a 'tontine' (that's a French word :)). Originally, it was meant to send one of their group to Macca every year, but currently it's used for urgent needs, strictly on a rota.

[AMandM]

My grandmother, Chinese but educated in France, also used the word 'tontine' to refer to a similar savings rota she belonged to in a North American Chinatown.

[ixtap]

I wonder how they came to use that word. My understanding of it has always been a last to die trust kind of set up. Perhaps that interpretation is specific to English Common Law, rather than the French original.

[PDXTabs]

I wonder how they came to use that word. My understanding of it has always been a last to die trust kind of set up. Perhaps that interpretation is specific to English Common Law, rather than the French original.

That's certainly the popular understanding of the word, but I don't think that it is historically accurate.

[pasadenafr]

I wonder how they came to use that word. My understanding of it has always been a last to die trust kind of set up. Perhaps that interpretation is specific to English Common Law, rather than the French original.

I think a tontine is generally speaking a pot of money that several people contribute to, to the benefit of one of them. The "last to die" set up is basically a version of that - you can still do that in France (either the last to die (often for real estate), or the survivors after X years (insurance / savings kind of thing)).

[Sugaree]

Isn't this just a Sous-sous or RASCA by another name?

I suppose the difficult thing is that everyone's need for funds lines up...someone could start a RASCA where Orthodox and Western Christians pool their funds for christmas gifts at different times.

OK, I came up with a ballet jump and Spanish for scratch. What the heck are sous sous and RASCA?

My Mom always used the Christmas Club at the bank, but that was the 70s and 80s and they paid the same interest as regular savings accounts.

Yeah, I remember going to the bank with my grandma in the 80s and seeing the signs for Christmas Club accounts. In retrospect, it seems like it was a cross between a savings account and a short-term CD: you put money in weekly or monthly, and it accrued interest, but you couldn't withdraw it without penalty until a set date.

My parents have done this for years.  That's a good description for it.  It earns the exact same interest as a savings account, but can't be accessed until around Thanksgiving.  It's a decent enough program for people who don't have the discipline to do it themselves.

In extreme cases (like the time that dad accidentally transferred the mortgage payment to the xmas club account instead of making that month's payment) it can be accessed early.  But it's difficult to do.

[Just Joe]

We set up a Christmas club account about 20 years ago. B/c we've never changed banks, it still functions the same. We don't really need it now but we just let it run its course. I think it's max amount is $350 or so.

[AMandM]

We set up a Christmas club account about 20 years ago. B/c we've never changed banks, it still functions the same. We don't really need it now but we just let it run its course. I think it's max amount is $350 or so.

Nowadays that $350 seems like a pretty frugal Christmas budget by most people's standards!

[Nickyd£g]

It’s very different but makes me think of “layaway” programs.  Do stores still do those? I heard some story at work recently about a local philanthropist paying off a lot of layaway accounts at Christmas time.

My local butcher does a Christmas layaway account, people pay in £5 a month and then get £60 of meat at Christmas. He doesn't charge them anything to do it.

[Sugaree]

It’s very different but makes me think of “layaway” programs.  Do stores still do those? I heard some story at work recently about a local philanthropist paying off a lot of layaway accounts at Christmas time.

There might be a few, likely independent, stores.  I think Walmart axed their layaway program in 2021 in favor of Affirm (a buy now pay later third-party company). 

I once worked at a store once that sold a niche holiday product.  We did layaway.  About half the time it was because people wanted to come in and buy while the the selection was good, but didn't want to have to store it at their house for a couple of months. 

[OtherJen]

It’s very different but makes me think of “layaway” programs.  Do stores still do those? I heard some story at work recently about a local philanthropist paying off a lot of layaway accounts at Christmas time.

My local butcher does a Christmas layaway account, people pay in £5 a month and then get £60 of meat at Christmas. He doesn't charge them anything to do it.

That's really smart. It's guaranteed income for the butcher, plus it would help with planning orders from suppliers during the busy season. Customers would also be assured of getting good meat for their dinners and/or gifts.