[newdamage]

Just got done listening to an interview with Stephen Pollen, who wrote a book called "Die Broke". Since this board frequently discusses the issues of an economic depression, I thought his ideas were especially relevent.

Die Broke

For those of you without Real Player he basically says:

- Only use credit for major purchases (house, car, etc.)
- Only spend the money you have, save for future purchases
- Don't plan on retiring, it's a backwards idea and it's easier just to save
moderately and plan on working in some form or another well into your
later years
- Don't leave your inheritance to your children when you die and they're
already grown, take care of them when they really need it (0-25 years)

I thought this was great advice, because all he's doing is telling people use some common sense and live within their means. It echoes what people say on this board about just getting off the consumer merri-go-round. I really like how he says, "It may be a bit painful at first, but it will be far more painful in the future if you continue to rely on credit".

Granted that's the whole problem, American culture says to think about the now and spend beyond your means, worry about the consequences later. Most people refuse to endure any pain (i.e. one average TV instead of a TV for each bedroom and a bigscreen in the living room) and just ignore how their credit spending hurts them.

Just amazes how financial advisors will give people this advice and people refuse to listen. Heck, it's the same message the Motley Fool preaches too.

Call me genuinely curious to see what would happen if everybody in this country followed this advice ...I'd love the see the gov't freak when savings rise dramatically and GDP slows to about 1% growth.

[cube]

If retirement means sitting at home and doing nothing but watching TV then I plan on never retiring. What's wrong with working until you die? At least with a job there's a sense of purpose in life.

anyways that's my philosophy on "retirement" if that makes any sense.

[KevO]

$this->bbcode_second_pass_quote('cube', ' ')At least with a job there's a sense of purpose in life.
.

[linlithgowoil]

the problem with all those recommendations is that they only really apply to people who have no money worries anyway.

anyone who can afford to save money, and doesnt need credit to buy stuff such as fridges, cookers etc., doesnt have any worries anyway.

the problem is people who have zero savings, zero assets, lowish incomes, families to feed and a house to keep - people like me, for instance.

i spent 7 years gaining a qualification as a lawyer (why did i do this?... ), which is now giving me the huge reward of earning £15,700 a year, around £6,000 less than what your average bus drive earns. however, in those 7 years, i also built up £25,000 of debt for that education.

There are tons of people like me now - graduates who are earning less than manual workers, but who also have debt far higher than their annual income. my unsecured debt payments eaccount for over 40% of my pay each month, the rest going on rent, food, taxes, fuel etc. i have less than zero left at the end of each month.

So, in 3 months, when my current job finishes, i'm signing on the dole (unemployment benefit to you yanks), and i'm defaulting on my debt payments. recent changes in UK law mean that, because i have unsecured creditors, there is absolutely nothing they can do, except threaten bankruptcy - but i doubt they will make me bankrupt, as i have zero assets and it wont be worth their while.

Roll on the crash!

[Roy]

Being that I'm 37 years old, I don't see my generation, or the great majority of them being able to "retire" in the conventional sense. I think the boomers will be the last generation that will be able to retire.

For example, I've been with my current employer for 7 years. When I hired on, I elected the Optional Retirement plan, which is a 401k invested in mutual funds thinking along the conventional lines that if Iput my money in the market that my future would be secure.,

HAHA.

The rate of return on my investment since 1998? .07%. The firm that handles our retirement accounts offers a choice of 76 mutual funds to put money into.

As of right now, 74 of them have negative rates of return for 05.

the other 2 show a 1.3% and a .76% for the year.

My ROR is less than even the government's cooked CPI figures.

Anyway, it seems to me that most of my kinfolk, men in particular, die within a few years of their retirement. Lack of purpose in their lives? That's what I believe. Even before I became aware of the precarious situation we're in, I always felt that I would work till I die. I figured once my engineering career was finished I would find work doing something I acutally like and that I find more fulfilling, such as gardening, mechanical repairs, and maybe even coaching basketball which is my true calling

Now those views have been slightly revised to include food production and teaching my kids and (hopefully) grandkids the skills they'll need to survive in a powered down world.

Maybe I'm not a doomer after all???

Roy

[Ludi]

$this->bbcode_second_pass_quote('Roy', 'B')eing that I'm 37 years old, I don't see my generation, or the great majority of them being able to "retire" in the conventional sense. I think the boomers will be the last generation that will be able to retire.


The rate of return on my investment since 1998? .07%. The firm that handles our retirement accounts offers a choice of 76 mutual funds to put money into.

As of right now, 74 of them have negative rates of return for 05.

the other 2 show a 1.3% and a .76% for the year.

[Roy]

When I leave my current job to re-locate, I'm taking my money out. I'm fully vested. Hopefully the market will hold for another 18 months or so. But I have my doubts about that. If it doesn't there won't be much of anything in there. I have moved most of my funds into a money market account, what ING refers to as a "stability of principle" account since I believe that I need to protect what I have rather than speculating.

When I was getting started, the investment advisor (what a fricking joke) told me to expect 8% ROR from the market vs. 2.5% from the state retirement fund. And he said to plan for 3% inflation and that I should plan to have an income till I was 90. Refer to my parenthetical comment above.

Right now 2.5% is looking much better than 0.07%!!!!!

Hindsight right?

[RiverRat]

$this->bbcode_second_pass_quote('Roy', 'T')he rate of return on my investment since 1998? .07%. The firm that handles our retirement accounts offers a choice of 76 mutual funds to put money into.

As of right now, 74 of them have negative rates of return for 05.

the other 2 show a 1.3% and a .76% for the year.

My ROR is less than even the government's cooked CPI figures.

[Roy]

RR,

I think you're absolutely correct. I began actively managing my portfolio last year and after the election things started really doing well. My ROR crept up to around 3% by February. But then the drop started and now my fund is worth almost exactly what I put into it. Efffectively lost all the gains made from my efforts.

One thing that saved me from losing principle was moving it to a stability of pricinciple account. It hasn't gone down like all the other offerings.

Unfortunately, Im not able to control my investments like a private investor or I'd be going in different directions.

Good luck with your accounts. I think we're all gonna need it with the market ocsillating like it has. Seems like on the big players are making money now because they can short stuff and do puts and buy on margins.

Us little guys are stuck with what the firms offer us and not enough money to take big risks.

i'm getting out of the market as soon as physically possible.

Roy

[b0nez]

Working till you die is good?Wow.I'm going out on a limb and guess you guys don't carry bricks for a living..lol Believe it or not alot of people work so hard that if they ever see 65 it would be a miracle,now let's move it further out.A few more years digging ditches is good for them..lolol

[Daculling]

Huh, My grandfather is still farming at 95. Not as fast as he used to be but he still has 150 head cattle and 400 acres in corn and hay. Actually I think he might die if he could'nt work.

[Trab]

Being a Gen-Xer, I don't believe that retirement will still be a valid concept by the time I'd be hitting that age in 30-35 years. The idea of me quitting work and playing golf all day just won't hold water, I think. For that matter, the idea that I'll be living in a condo someplace warm several thousand miles away from my family doesn't seem valid either. I expect to be working in one form or another until I die. Might be gardening/farming/tinkering as I get older and lose the ability to do heavy manual labor, but it would still contribute.

I fully expect multi-generational living arrangements to come back in one form or another. Without the cheap energy boon, limited mobility and ability to take care of ones' self isn't a probelm you can pay away via nursing homes or 'senior apartments,' I think.

[JoeW]

$this->bbcode_second_pass_quote('Roy', '
')
Right now 2.5% is looking much better than 0.07%!!!!!

Hindsight right?

[RiverRat]

You know … all this talk about 401k’s and IRA’s has got me wondering.

What would the state of ‘Wall Street’ be without the MASSIVE influx of personal capital over the years since these two retirement options became available.

Where would the DOW be …. 8,000 ???
Where would the NASDAQ be …. 1,000 ???

I’m sure without 401k’s and IRA’s the vast majority of people would never have been so heavily involved in stocks and bonds. There is a lot of excess capital infused into 'the system' on a regular basis.