Money

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and why are j-schools filled to the gills (middle-boy shockey will be in one of 'em in the fall, much to his mom's dismay) and receiving more applicants every year. when she and others wonder, 'what's he gonna do with that?' i just shrug and say, 'law school,' another oversaturated institution.

 

One thing nobody seems to be mentioning, particularly from the "$32.5K is enough for now" crowd, is do you want to be working for the rest of your life or do you want to have the option of retiring on time or, God forbid, early? It's going to take about 25-30 years of saving and investing to provide a comfortable enough retirement. If you aren't factoring that into the "is this enough" equation, that's a big mistake. The whole "plan for tomorrow, live for today" credo, a lot of people (e.g. accountants) do too much of the former, but journalists definitely do way too much of the latter.

I don't see how retirement assets can be built on the newspaper pittances of today, but then again when I'm 60 I want to take the family to Europe, not Branson.

 

"Money doesn't always bring happiness. People with ten million dollars are no happier than people with nine million dollars." -- Hobart Brown, 20th-century artist

 

I want to come back to this, because family plays a huge role.

In my family we didn't talk about money. It was a "taboo" subject or a "grown-up" subject. Didn't stop my brother and I from picking up my mom's hatred of anyone who had it. It did prevent us from knowing what to do with the money we eventually earned ourselves.

I grew up in a low income area, so my parents' public servant salaries were considered middle class. But outside of the area, it wouldn't have amounted to jack.

Even though my parents have carved out a nice retirement for themselves by living frugally and having pensions, the family drama goes on. My parents can't afford to throw the big weddings or take the European vacations or buy homes for their children the way their siblings can. My mom's resentment is still bubbling.

But here's how I look at it: My cousins all have nice cars and big houses and lifestyles provided by their parents. And they didn't earn any of it. Someday when I buy a little house, I will have earned it myself.

 

I don't disagree with you Ragu. But when somebody threw out the $32.5k, he didn't say where he was making that much. My point was one man's fortune is another man's pocket change.

But, hey, what do I know? Fifteen years ago, I took a 45 percent pay cut to get back into newspapers. My assistant at the corporation where I worked is now a VP. That could have been me. Every so often — mainly when he's posting Facebook photos of his vacations — I feel a twinge of regret. Doesn't last long though.

 

our parents must be relations. god bless mine. they still live in the same rent-controlled apt. my sis and i grew up in. they never bought a home, which i believe always left them unknowing in the way of money, a trait they passed down to me. i've been a bit bolder than they ever were -- i believe if you've never bought a home you're never going to become even a bit savvy about dinero issues -- and while i've done a bit better than they did in that regard i remain an absolute invalid when it comes to handling/investing money.

i don't know if it's hereditary or influenced by what your educational strength or vocation is, but i sure don't think being a journalist helped to strengthen me in this area. hey, i come from a long line of liberal arts people, not business or science folk.

whatever the excuse or theory, the shockeys just get by. while we could certainly have been more consumer-savvy over the years i blame most of it to the fact that we live where we do. we're in a very affluent town (i'm sure we're in the bottom 10 percent in income) and we've lived in houses we couldn't afford if we had any desire to stash a bunch for college funds or retirement.

shortsided as it is, once we moved into this town and started a family in our 2-bedroom co-op, the cycle of bad timing began. we bought the co-op when the cost and interest rates were high; sold it for a loss; bought the first house high; 11 years later sold it for health reasons for more than twice the purchase price, but put it all into our present home three blocks from the old house to keep the kids in the same schools; then watched the housing market tumble six years ago, right after we moved in.

so now we have a huuuuge mortgage and face having to move again somewhere more affordable in a couple of years, with no idea if we'll sell this house for enough to pay off the mortage and leave enough to buy an apartment in a much less expensive area after the third stooge is outta h.s.

yeah, this adult stuff sucks, especially when you're bad at it. which i am. sigh...

 

I give you huge credit because you're trying.

 

Money is all relative. I try not to get caught up in looking at what everyone else has.

I did not pay attention really much early in my career. In the first 7 years of my career, I did not press my employer for raises, simply went with the flow and was happy to get whatever raises I got (I think 2 over 7 years.) Then I went out on my own and started paying some attention. The reality is that I started connecting my work with the returns and I worked harder and paid more attention.

Nowadays, yes I make a very nice return but in the neighborhood I live in, there's a great deal more extravagance going on around me. Summer homes in the mountains, trips to Tahiti, etc. I'm happy for them. We provide my kids with a stay at home mom who picks them up from school when the bell rings, has a hot snack ready for them when they get home and who helps them with their homework. That's something I never had.

As for living within your means, that's my golden rule (thank you Ms. Q!!!). Do that and the stress level is manageable and the future is brighter. Even amongst my neighbors who seem to have it all, there is the question in the background wondering whether the Mercedes SUV was paid with cash or financed with the last $$ available.

 

Someone mentioned maybe people should be willing to forgo a lot of the electronic gadgets that are out there, and not use credit cards. Fine. Let's just wipe out another large swath of the economy that built in bulk with the intent of selling the product to a growing middle class that had expanded credit options. Horatio Alger and the grandparents who bought a week's groceries from their change purse aren't walking through that door.

 

Nobody said everybody should forgo those things. Only the people who can't afford it.

When people who can't afford it run up their credit card bills buying things like that, you get a period of rapid economic growth, followed by a cratering recession when the borrowing house of cards finally begins to topple. Sound familiar? Because we are living the back end of it right now after enjoying the front end in the 1990 and early 2000s.

Building an economy on middle-class borrowing power is impossible to sustain in the long run, as we are seeing before our very eyes.

 

The first time I heard this whole "you have to spend to save the economy!" bunk was when it was George H.W. Bush's whole plan to pull the country out of recession at Christmastime 1991. Since then it continues unabated, that paying $10 for a sandwich at the deli instead of packing your own lunch for 75 cents is the nobler and more responsible thing to do.

Not that I am surprised to see that reasoning on a board for journalists, but ... come on. We should buy new iPhones and pay interest charges so society can prosper?