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Remo

16 money wasters

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airmedic1

Anything that I can pay with a credit card I do, BUT, and this is the most important part, I pay it off each month no matter how painful it is! I'm getting 5% cash back on all gas purchases, 3% at restaurants and 1% for everything else.  If we need a new appliance I do my research and the find one that someone is willing to sell me for interest free for 12-18 months.  I pay it off before the promotional period ends but  I think most lenders are gambling the loan won't be paid off before the promotional period is up and they will get the huge interest.

My last three vehicles have been at zero percent interest.  Why should I take my money out of the bank when the company is allowing me to use theirs for free.  I just got a notice from Chase saying I'm preapproved to buy any new Subaru that I want but just because I got that notice  doesn't mean that I will take advantage of it.  It still has to be a good buy.

 

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apachecadillac

Interesting point about how we've evolved from a culture in which the rich try to blend in to one in which the rich try to stand out.  As a guy who remembers being lectured as a child about the foolishness of 'keeping up with the Joneses', I find that mildly repugnant, but not particularly surprising.  The Depression and WW2 brutually beat some sense into us that a couple of generations of affluenza have thoroughly dissipated.  OTOH, during that time there sure have been some interesting (and good) developments.

 

Even with the last sentence, that paragraph sounds like a dry old fart.  Generally, I don't like articles that smugly mock how other people chose to spend their money, or (mis)manage their finances.  For this crowd, an article explaining in detail why one shotgun is enough (or one in each gauge), one bird dog at a time (maybe with a little overlap) is better, or that the fishing is good enough locally that a trip to Alaska is foolish, how you should rent not buy that cabin in the woods, that Stormy Kromer is a ripoff and you should get all your headgear at Wallyworld, etc., etc. might have more traction.  I know I'm related to people who would agree with every one one of those observations.  Hell, I may be married to one (well, she's not too keen on Walmart).

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erik meade
On 5/17/2019 at 5:51 AM, Tony Moore said:

People are what they are..

Yep...

 

but some insist that all of us should be like them. 

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sneem

A lot of common sense in the article, but no blinding flash of insight. 

The best advice is to start saving early and keep it up. A fairly sound mutual fund or ETF like an S&P 500 fund will do. Dollar cost averaging, investing the same amount every month no matter what the market is doing, works and it need not be a lot of money. As a young Lieutenant, I set up an allotment for $75.00 a month and kept it up for 20 years. At the end the fund was worth orders of magnitude more than I had invested. Start early, be disciplined and stay consistent. It will literally pay big dividends.

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Lurch

"The Rich get richer by acting poor, and the Poor get poorer by acting rich"

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bill
On 5/16/2019 at 6:08 PM, airmedic1 said:

In my line of work I see people all tatted up, driving cars and SUV's that I don't think that I can afford, living in homes that know I can't afford that live on Ramen noodles at home with hand-me-down furniture but they still smoke and go to the bar but can't afford to pay us when we take care of them.  And then they want a discount on their bill or complain to anyone that will listen on social media out the bill being too high.

i would have thought that some were old enough to have gone through our last recession but they must have short memories.  My goal is to always have enough money in the bank to survive for six months without hitting the investments, retirement or living on a credit card.

I think our goverment has made it to easy to borrow money  credit cards be surprised at the folks that make 6 figure salaries and live paycheck paycheck.  PLUS OUR NEWS OUTLETS MAKES FOLKS THINK ITS OK TO RUN UP A LOT DEBT NO CREDIT CAN BUY A NEW CAR BIG TAG ITEMS ON CREDIT JUST LOOKED AT REPORT AVERAGE JOE WOULD NOT HAVE 500 BUCKS IN BANK TO COVER  A UNEXPECTED  EMERGENCY EXPENSE

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1971snipe

It's a long read, to finally reach the well known conclusion.  

One of my high school football coaches turned to me on the sideline during a game once and said, "you make your own luck, son".  

In the corporate world though, you also need a benefactor.  And Providence.  

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caleb

Seems like the guy really blurs the lines between good advice and grumpy old man rant.

 

The bit about cars is clearly correct.  But he forgot to include houses.  

 

About housing, here's an interesting summary of data from the last Census at the American Enterprise Institute: http://www.aei.org/publication/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/

 

Since 1973, we've doubled the average number of square house feet per person:

 

housing1.png

 

Every one of those square feet has to not only be purchased, but maintained, heated/cooled, and gets taxed every single year.  According to the National Association of Home Builders, the average annual operating cost for a house is $2.94/sqft, so an increase of 2028 feet (average for four people between 1973 and 2015, assuming household size effect is minimal in the aggregate, which the <10% gap between the median and mean measures would suggest) costs $5,962.32 each and every year, in perpetuity.  To put it differently, an average household of four could save nearly $6000 annually just by dialing back their space expectations to 1973 levels.  

 

If someone chooses to make that move and instead of spending that extra $5,962.32 on square feet puts it in an investment that earns 7% each year in an annual lump sum from the ages of 25 to 65 (40 years), that person would have $1,273,540.26 at age 65 based only on diversion of expenses on extra square feet to investments.  Normal people are literally spending away a fortune on supersized housing.

 

Somehow the author ignores that elephant, in favor of coffee and tattoos (seriously, tattoos?).  He'd probably rant about avocado toast too, if he knew what it was.  It appears he's conflated sound financial management with people who share his tastes, because his priorities aren't math-driven.

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chilly460

Great post.  I say it all the time, here in Richmond, VA the size of the houses is staggering.  I went through this phenomenon with my ex-wife, and after divorce discovered that I'm much happier in a small house.  People buy these McMansions to satisfy other people, not for themselves.  

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paul frey

Fortunately I don't fall into many of those

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Don Steese

The size of people's houses is absolutely astounding! No one needs a 7500 sq. ft. house, but then again, no one needs 25 Fox shotguns.....

Sorry Al!! 😊

 

When you think about it luck plays a huge part in virtually everyone's success. Everything, right down to accident of birth, is a crap shoot!  Hard work is overrated!! We in America are oddly proud of the fact that we spend too much time at work. Bruce Williams was a syndicated talk show host who was about the best guy ever for giving advice to small and large business owners and he once said, "If you've had a business for five years or more and feel you can't take a vacation, you're running your business wrong!!" I believe that!  Most people, in my opinion, say they're afraid to go on a vacation because the business would suffer. I believe a lot of them are actually are afraid it would do just fine. In our business we always talked about air personalities who wouldn't take time off because they were afraid ratings would go down, when in reality they were afraid they'd go UP!!

That having been said, I also believe that no one will care about your business like you do, so you can't be away for too long. 

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erik meade
6 hours ago, 1971snipe said:

One of my high school football coaches turned to me on the sideline during a game once and said, "you make your own luck, son". 

 

Sounds like you were lucky to have him as a coach...

Suppose a player did well. Would he think he had any role in the matter, or did that player do it on their own? If they players do it on their own, you wonder why he bothers being a coach.

It is not uncommon for coaches to express this idea that people are responsible for their own success.  It is not uncommon, but it always strikes me as bizarrely self contradictory. The very job of a coach is to help people achieve a level of success that they would not achieve on their own.  Of course, the player has to do their part, but that part is not the whole.

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caleb
2 hours ago, chilly460 said:

Great post.  I say it all the time, here in Richmond, VA the size of the houses is staggering.  I went through this phenomenon with my ex-wife, and after divorce discovered that I'm much happier in a small house.  People buy these McMansions to satisfy other people, not for themselves.  

 

The math is even better with cars right now.

 

The average car payment is an eyewatering $551/mo for 69 months.  Lots of folks never pay off the note, and instead bounce from payment to payment as they upgrade to the latest and greatest.

 

If a family can cut out that average car payment of $551 (ideally by doing something that might make life better like walking, biking, or carpooling with family/friends), and instead invest it monthly at the same 7% from age 25 to 65, that's $1,446,272 in the bank.  Just by cutting out a single car payment and saving it instead.

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chilly460

Yep, I do the math all the time.  A $50k vehicle is fairly common nowadays, especially truck or big SUV, and they're ubiquitous in this area.  So, family puts $20k down, which I think most would agree is a fair chunk of change, then they're financing $30k.  Note on a $30k loan for 5yrs at 2.5% is $532.  Makes my head hurt.  

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