Relax... Even "poor" bogleheads are exceptional

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Longtimelurker
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Relax... Even "poor" bogleheads are exceptional

Post by Longtimelurker » Mon Jan 06, 2014 1:24 pm

In response to numerous complaints about feeling inadequate relative to this self-selected pool of investors called boglehead, I thought it would be good practice to post occasionally some stats about non-bogleheads. Very sobering article.

http://www.cnbc.com/id/101311683
Only 41 percent of the 25,000 people surveyed said they spend less than their income.
56 percent of individuals lack a rainy day fund to cover expenses for three months in case of sickness, job loss or other emergencies, according to a FINRA study.
Nearly a third of U.S. adults admit their lack of knowledge has led to poor financial decisions and more than 40 percent acknowledge they've missed out on good financial opportunities as a result, according to a Harris Interactive survey.
Its pretty darn good to be a "poor" boglehead if you ask me...
Stay the course. If you can't resist greed, and fear is proven to be 2x as strong, you are doomed as an investor.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by ThatGuy » Mon Jan 06, 2014 1:27 pm

Just saw this on CNN:
CNN wrote:FORTUNE -- Are you saving too much for retirement? Can you believe I'm even asking that question?

Full disclosure: The folks at Morningstar Investment Management, specifically head of retirement research David Blanchett, asked it first. He found that for many people the answer is yes -- by an average of 20%.
Work is the curse of the drinking class - Oscar Wilde

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Re: Relax... Even "poor" bogleheads are exceptional

Post by mhc » Mon Jan 06, 2014 1:37 pm

Longtimelurker wrote:In response to numerous complaints about feeling inadequate relative to this self-selected pool of investors called boglehead, I thought it would be good practice to post occasionally some stats about non-bogleheads. Very sobering article.

http://www.cnbc.com/id/101311683
Only 41 percent of the 25,000 people surveyed said they spend less than their income.
56 percent of individuals lack a rainy day fund to cover expenses for three months in case of sickness, job loss or other emergencies, according to a FINRA study.
Nearly a third of U.S. adults admit their lack of knowledge has led to poor financial decisions and more than 40 percent acknowledge they've missed out on good financial opportunities as a result, according to a Harris Interactive survey.
Its pretty darn good to be a "poor" boglehead if you ask me...
So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Grt2bOutdoors » Mon Jan 06, 2014 1:39 pm

ThatGuy wrote:Just saw this on CNN:
CNN wrote:FORTUNE -- Are you saving too much for retirement? Can you believe I'm even asking that question?

Full disclosure: The folks at Morningstar Investment Management, specifically head of retirement research David Blanchett, asked it first. He found that for many people the answer is yes -- by an average of 20%.
We can fix that issue - just raise taxes by 20%. Now there is no over-saving. :twisted:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Relax... Even "poor" bogleheads are exceptional

Post by The Wizard » Mon Jan 06, 2014 1:56 pm

mhc wrote:
...So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
I don't completely agree.
Two different issues present themselves. The first is simply Living Beneath Your Means and not carrying credit card debt, that sort of thing.
The second is accumulating a few megabucks in your investment portfolio over the years.
It's hard to do the second if you haven't done the first.
It's worth clarifying this for newbies and outsiders IMO...
Attempted new signature...

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Re: Relax... Even "poor" bogleheads are exceptional

Post by IlliniDave » Mon Jan 06, 2014 2:06 pm

Longtimelurker wrote:In response to numerous complaints about feeling inadequate relative to this self-selected pool of investors called boglehead, I thought it would be good practice to post occasionally some stats about non-bogleheads. Very sobering article.

http://www.cnbc.com/id/101311683
Only 41 percent of the 25,000 people surveyed said they spend less than their income.
56 percent of individuals lack a rainy day fund to cover expenses for three months in case of sickness, job loss or other emergencies, according to a FINRA study.
Nearly a third of U.S. adults admit their lack of knowledge has led to poor financial decisions and more than 40 percent acknowledge they've missed out on good financial opportunities as a result, according to a Harris Interactive survey.
Its pretty darn good to be a "poor" boglehead if you ask me...
It's pretty sobering to look at the wider world (beyond Bogleheads). The Census Bureau also compiles quite a bit of wealth statistics that google will lead the interested person to. It makes one wonder what lies ahead. I'm pretty well positioned relative to my wider peer group, but pretty modestly positioned within this community. So I have to rely on my own analysis of my specific situation. Fortunately that suggests I'm doing pretty well. So I don't let the success of the Bogleheads at large worry me, I just give a congratulatory tip of the hat to the majority who are ahead of me in the game.
Don't do something. Just stand there!

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Achelois » Mon Jan 06, 2014 2:08 pm

So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO



Yes, they should, absolutely, but seeing how others are doing, both better and worse,does provide a frame of reference and help to see possibilities.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by frugaltype » Mon Jan 06, 2014 2:11 pm

I'm sure there are some people who are doing spectacularly badly, sometimes through no fault of their own, which would throw statistics off.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Longtimelurker » Mon Jan 06, 2014 2:53 pm

frugaltype wrote:I'm sure there are some people who are doing spectacularly badly, sometimes through no fault of their own, which would throw statistics off.
Only 41% of 25000 surveyed spent LESS than what they made. So 59% or 14,750 people in this small population spend more then they make. I don't think you can claim this population is dominated by those who ran into a streak of bad luck - through no fault of their own...
Stay the course. If you can't resist greed, and fear is proven to be 2x as strong, you are doomed as an investor.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Longtimelurker » Mon Jan 06, 2014 3:00 pm

mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
Stay the course. If you can't resist greed, and fear is proven to be 2x as strong, you are doomed as an investor.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by mhc » Mon Jan 06, 2014 3:21 pm

Longtimelurker wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
I guess I misinterpreted you OP. I thought it was about helping people feel adequate. If it is really about motivating people to do the right thing, then ignore my OP.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Grt2bOutdoors » Mon Jan 06, 2014 3:58 pm

Longtimelurker wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
A former high school classmate told me of a certain religious sect that would indoctrinate their children to study hard, go to college, become a doctor, lawyer or businessman, then put them in a car and drive them to all the poor rough neighborhoods in NYC to instill fear in them of what they might become if they don't become successful. I'm not sure if any of it was true, but maybe it was because all of those in that particular sect grew up to become just that - doctors, lawyers or businessmen. Maybe there's something to be said about the threatening part.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Relax... Even "poor" bogleheads are exceptional

Post by staythecourse » Mon Jan 06, 2014 4:16 pm

I would not say the key is to relax or to be anxious. The key, like other aspects of your life, is to STOP comparing yourself just for the sake of doing it. It sometimes feels like we are back in high school where folks seem to be comparing themselves to the cool kids new Michael Jordan shoes. That is NEVER a good recipe for happiness.

The focus should always be turned to one self as the ONLY important measuring stick. Do YOU have or on pace to meet YOUR financial goals is all that matters.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Relax... Even "poor" bogleheads are exceptional

Post by HomerJ » Mon Jan 06, 2014 4:19 pm

Grt2bOutdoors wrote:
Longtimelurker wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
A former high school classmate told me of a certain religious sect that would indoctrinate their children to study hard, go to college, become a doctor, lawyer or businessman, then put them in a car and drive them to all the poor rough neighborhoods in NYC to instill fear in them of what they might become if they don't become successful. I'm not sure if any of it was true, but maybe it was because all of those in that particular sect grew up to become just that - doctors, lawyers or businessmen. Maybe there's something to be said about the threatening part.
I've told the story before, but when I almost flunked out of college, my Dad got me a job working the night shift on the assembly line in the factory he managed. Working that summer for near minimum wage with a bunch of very tired looking 35-year olds scared me enough to get straight As the following year (okay one B)

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Re: Relax... Even "poor" bogleheads are exceptional

Post by ajcp » Mon Jan 06, 2014 4:31 pm

Longtimelurker wrote:
Only 41 percent of the 25,000 people surveyed said they spend less than their income.
I read that as "less than half their income" and thought "Wow, that's a pretty high standard...I don't spend less than half my income either." Then I reread it and, uh, yikes.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by telemark » Mon Jan 06, 2014 4:42 pm

If I hadn't learned about index funds a few years ago, I would probably have bought a new car by now, just because I have the money and what else am I going to do with it? Saving to invest only makes sense if you think you can invest effectively. The only people I knew who talked about their investments were obviously hare-brained, always trying some new scheme that always turned out badly.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Twins Fan » Mon Jan 06, 2014 5:59 pm

I used to be one of teh folks quoted about in the first post. Spent more than I made, no emergency fund... no savings at all really, and knew nothing aobut 401k/deferred comp/IRA/you name it. I remember one time, after who knows how long, sitting down to figure out my monthly in vs. monthly out funds... and thinking, how am I living if I don't make enough to pay the bills?! As everyone can guess, debt was the answer.

I have changed courses and have small peanuts compared to many in Bogleheads, but I am very glad to be a "poor" boglehead!! :sharebeer

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Re: Relax... Even "poor" bogleheads are exceptional

Post by JDaniels » Mon Jan 06, 2014 7:55 pm

Grt2bOutdoors wrote:
Longtimelurker wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
A former high school classmate told me of a certain religious sect that would indoctrinate their children to study hard, go to college, become a doctor, lawyer or businessman, then put them in a car and drive them to all the poor rough neighborhoods in NYC to instill fear in them of what they might become if they don't become successful. I'm not sure if any of it was true, but maybe it was because all of those in that particular sect grew up to become just that - doctors, lawyers or businessmen. Maybe there's something to be said about the threatening part.
Speaking as one of the people who grew up in those "poor rough neighborhoods in NYC", I can attest to how well the fear works. Lol
"The poor long for riches. The rich long for heaven. But the wise desire tranquility."

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Re: Relax... Even "poor" bogleheads are exceptional

Post by AustenNut » Mon Jan 06, 2014 8:30 pm

mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
This quote just really rubbed me the wrong way. Though I understand your point that we shouldn't look at the bottom portion of society to make us feel better, Longtimelurker was trying to address the bottom portion of Bogleheads, a very different group. Take a look at the threads on savings rates...the slackers are the ones who save less than 30% of their gross salary, as most people seem to boast rates of 50-80%. Or right now there's the 2014 net worth survey. Taking a look at the responses so far, only a few people have a net worth of less than $1 million. Obviously there's some self-selection in terms of who is responding, but this is the general message that is sent out to Bogleheads.

For those of us who do not earn six-figure salaries, or don't happen to live in a super-low-cost-of-living area, well things are tougher. Though I'm not one of them, I imagine that others have read some of the threads and thought, "If I can't save at least 35% of my salary then I'm screwed anyway, so why bother?" Please don't forget that the HOUSEHOLD median income in the U.S. for 2012 was $51,017 (from http://www.census.gov/prod/2013pubs/p60-245.pdf). Saying that they're "inadequate" because they don't save at least half their income is just a major slap in the face.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by nisiprius » Mon Jan 06, 2014 9:03 pm

A man saw a ball of gold in the sky;
He climbed for it,
And eventually he achieved it --
It was clay.

Now this is the strange part:
When the man went to the earth
And looked again,
Lo, there was the ball of gold.
Now this is the strange part:
It was a ball of gold.
Aye, by the heavens, it was a ball of gold.

--Stephen Crane
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Caduceus » Mon Jan 06, 2014 9:18 pm

A man saw a ball of gold in the sky;
He climbed for it,
And eventually he achieved it --
It was clay.

Now this is the strange part:
When the man went to the earth
And looked again,
Lo, there was the ball of gold.
Now this is the strange part:
It was a ball of gold.
Aye, by the heavens, it was a ball of gold.

--Stephen Crane
Thomas Aquinas on Stephen Crane:

Literal sense: The moon is made up of rocks but shines brightly nevertheless.
Allegorical sense: It's the journey, and not just the destination, that matters.
Moral sense: Don't forget to admire the ball of gold on your way there.
Anagogical sense: All this gold's just gonna turn into a pile of dust at some point ...

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mhc
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Re: Relax... Even "poor" bogleheads are exceptional

Post by mhc » Mon Jan 06, 2014 9:21 pm

AustenNut wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
This quote just really rubbed me the wrong way. Though I understand your point that we shouldn't look at the bottom portion of society to make us feel better, Longtimelurker was trying to address the bottom portion of Bogleheads, a very different group. Take a look at the threads on savings rates...the slackers are the ones who save less than 30% of their gross salary, as most people seem to boast rates of 50-80%. Or right now there's the 2014 net worth survey. Taking a look at the responses so far, only a few people have a net worth of less than $1 million. Obviously there's some self-selection in terms of who is responding, but this is the general message that is sent out to Bogleheads.

For those of us who do not earn six-figure salaries, or don't happen to live in a super-low-cost-of-living area, well things are tougher. Though I'm not one of them, I imagine that others have read some of the threads and thought, "If I can't save at least 35% of my salary then I'm screwed anyway, so why bother?" Please don't forget that the HOUSEHOLD median income in the U.S. for 2012 was $51,017 (from http://www.census.gov/prod/2013pubs/p60-245.pdf). Saying that they're "inadequate" because they don't save at least half their income is just a major slap in the face.
I have never seen someone call someone else a slacker on this forum. In general, people are very positive and encouraging. If people are feeling like slackers for saving only 20% instead of 30%, then the solution is not to compare them to other people. Life is not a comparison of one person against another. If a person is doing what he should with what he has, then there is no need to feel inadequate.

There are many threads on saving to meet your goals. The goal is not to save as much as possible. If 10% gets you to your goal, then great. I think people read too much into these threads. That is why I suggest people take responsibility for improving their own lives instead of trying to validate themselves by comparing themselves to the bottom of some group.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by AustenNut » Mon Jan 06, 2014 9:41 pm

mhc wrote: I have never seen someone call someone else a slacker on this forum. In general, people are very positive and encouraging. If people are feeling like slackers for saving only 20% instead of 30%, then the solution is not to compare them to other people. Life is not a comparison of one person against another. If a person is doing what he should with what he has, then there is no need to feel inadequate.

There are many threads on saving to meet your goals. The goal is not to save as much as possible. If 10% gets you to your goal, then great. I think people read too much into these threads. That is why I suggest people take responsibility for improving their own lives instead of trying to validate themselves by comparing themselves to the bottom of some group.
Just this evening I saw a thread here (http://www.bogleheads.org/forum/viewtop ... st=1912817) where the OP was saving 25-30% of his/her income, which was going to be more than sufficient for the OP's needs. One user said
This assumes you want to work until you are 65. If you want to retire early or pursue a lower income job later in life you need to save more. Spending over 50% of your after tax salary seems reckless to me, but it's the american way.

When asked if it was a typo the person replied:
I meant 50%, but that includes payment of principal on mortgages.
Though the word "slacker" is not used, "reckless" is not far off from the same sentiment in this context. Though this is not necessarily the norm for Boglehead posters, I've seen many other comments elsewhere on this forum that give off a similar vibe.

I agree with you that people shouldn't compare themselves in order to validate themselves. But inevitably, that's what most people end up doing (perhaps not to validate themselves, but they still compare). It's one of the reasons I like to visit these forums. If I'm going to be influenced in one direction or another, I'd rather be veering towards a way that's more focused on saving, investing, and using money wisely. Because the vast majority of the other influences are to spend more, keep up with the Joneses, live for today because you only live once, etc. Yet I also don't see the harm in making the vast majority of visitors to this forum feel a bit better about themselves even if they don't have the stats of the people who like to post their own so frequently.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by Louis Winthorpe III » Mon Jan 06, 2014 9:48 pm

AustenNut wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
This quote just really rubbed me the wrong way. Though I understand your point that we shouldn't look at the bottom portion of society to make us feel better, Longtimelurker was trying to address the bottom portion of Bogleheads, a very different group. Take a look at the threads on savings rates...the slackers are the ones who save less than 30% of their gross salary, as most people seem to boast rates of 50-80%. Or right now there's the 2014 net worth survey. Taking a look at the responses so far, only a few people have a net worth of less than $1 million. Obviously there's some self-selection in terms of who is responding, but this is the general message that is sent out to Bogleheads.
Yeah, I've only been here for a few weeks, and the number of posts by young millionaires looking for advice with their portfolios, by guys who are tired of making $400,000+ per year in Corporate America, guys who received multi-million dollar windfalls, etc., is a little surprising. I do fine financially, and there's nothing wrong to fix, but it does seem like a lot of folks here come from a place I can't relate to. Knowing that most Americans are in awful shape financially doesn't do anything to change that.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by nedsaid » Mon Jan 06, 2014 9:58 pm

Louis, I have to admit that I have a hard time relating to the success of young millionaires seeking help. I actually have commented on a few of their threads and I have received nice responses. It does amaze me the large salaries that folks achieve at young ages. No "I am better than you" attitudes from these folks.

I have revealed some things about my portfolio holdings but I have also been a bit cryptic. How much I have or don't have and how that compares with others is not important and doesn't matter. And I have admitted to lots of mistakes and that I am still learning. This forum has never been about "keeping up with the Joneses.

What I hope is that we all learn from each other and that we can benefit from others' experiences.
A fool and his money are good for business.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by MossySF » Mon Jan 06, 2014 10:49 pm

AustenNut wrote: Just this evening I saw a thread here (http://www.bogleheads.org/forum/viewtop ... st=1912817) where the OP was saving 25-30% of his/her income, which was going to be more than sufficient for the OP's needs. One user said
This assumes you want to work until you are 65. If you want to retire early or pursue a lower income job later in life you need to save more. Spending over 50% of your after tax salary seems reckless to me, but it's the american way.
For a highly-taxed Boglehead, 50% after-tax savings is about 30%-35% pre-tax. How much more different is that from the "average" Boglehead saving 20%-30% pre-tax?

And if you are earning a highly taxed salary, you often are in a high stress, high risk, high volatility, high burnout job. Lord forbid outside forces dump you into position earning a "mere" six-figure salary because you will wish you had been saving 75% after-tax nevermind 50%. For somebody posting from that point of view, reckless is the correct adjective for them.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by dan23 » Mon Jan 06, 2014 10:57 pm

I find it unwise to compare yourself to the average person to make yourself feel better - that is how you get no improvement. I think it is good when people feel at the bottom of the pack - it can act as a motivator.
Last edited by dan23 on Mon Jan 06, 2014 10:59 pm, edited 1 time in total.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by LadyGeek » Mon Jan 06, 2014 10:58 pm

This thread is now in the Personal Finance (Not Investing) forum (savings rate).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: Relax... Even "poor" bogleheads are exceptional

Post by SP-diceman » Mon Jan 06, 2014 11:02 pm

...of course I'm exceptional. :D

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Re: Relax... Even "poor" bogleheads are exceptional

Post by deadlymonkey » Mon Jan 06, 2014 11:33 pm

Grt2bOutdoors wrote:
Longtimelurker wrote:
mhc wrote: So you are going to post about how others are doing poorly to try to help people feel adequate. If people are feeling inadequate, then they should re-evaluate their lives and fix what is wrong. Adequacy should not come from comparisons to others. IMHO
The carrot and the stick, brother. You can beat people all you want, threaten them with poverty, show them how much worse they are doing then other bogleheads… and yes, that will convince some. You can also share that if they are LBYM, they are automatically in the top 40% - you can celebrate that and perhaps some who respond poorly to the stick will find motivation in the fact that they are top 40%, and want to get to top 30%...
A former high school classmate told me of a certain religious sect that would indoctrinate their children to study hard, go to college, become a doctor, lawyer or businessman, then put them in a car and drive them to all the poor rough neighborhoods in NYC to instill fear in them of what they might become if they don't become successful. I'm not sure if any of it was true, but maybe it was because all of those in that particular sect grew up to become just that - doctors, lawyers or businessmen. Maybe there's something to be said about the threatening part.
My father barely graduated high school and never went to college. When I was 15, he told me he was getting me a job working for him on the loading docks at a nearby factory where he was a supervisor. I didn't need the lesson (was very focused on school) but the lesson still stood, do well and get a good paying job so I am not the 50 year old still doing manual labor all day for little play.

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grabiner
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Re: Relax... Even "poor" bogleheads are exceptional

Post by grabiner » Tue Jan 07, 2014 12:11 am

Longtimelurker wrote:
frugaltype wrote:I'm sure there are some people who are doing spectacularly badly, sometimes through no fault of their own, which would throw statistics off.
Only 41% of 25000 surveyed spent LESS than what they made. So 59% or 14,750 people in this small population spend more then they make. I don't think you can claim this population is dominated by those who ran into a streak of bad luck - through no fault of their own...
It's not quite as disturbing; here's the full quote:
About 19 percent of Americans spend more money than they make and slightly more than a third are just breaking even, leaving little or no money for savings, according to a study by the Financial Industry Regulatory Authority's Investor Education Foundation. Only 41 percent of the 25,000 people surveyed said they spend less than their income.
I don't know who is in this survey. Retirees with savings are likely to spend more money than they make, as that is what they have been saving for. Students who take out loans are spending more money than they make, in order to make more than they spend in later years. Even students who don't take out loans are likely to be close to break-even.

Considering my own experience as an adult, I had a positive cash flow as an undergraduate once I started summer jobs because my parents were paying my expenses. I had a neutral cash flow as a graduate student, with a scholarship covering tuition plus a stipend that was about equal to my cost of living. I had a negative cash flow in my first postdoctoral position, because it was in Israel and I had an Israeli salary (about half of the US) but several American expenses (travel to the US, and keeping my US health insurance so that I would be insurable when I returned home). And I had a negative cash flow in 2013 because I saved less during the year than the down payment I made on my home. So even though I have a frugal lifestyle, save a lot, and have never been unemployed for longer than a summer, I have had two years of negative cash flow as an adult, four of neutral cash flow, and may well have negative or neutral cash flow when I retire and spend my investments.
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Re: Relax... Even "poor" bogleheads are exceptional

Post by KlangFool » Tue Jan 07, 2014 12:11 am

Folks,

I survived 80% laid off at my former employer across 6 1/2 years. There were quarterly laid off of 10% or so every quarter. I save a lot of money because I do not know when I might be forced to retire early. After that employer, I had regular annual laid off at the next few employers. I count my blessing when the laid off come once a year. So, I am just trying to survive.

KlangFool

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