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Remo

16 money wasters

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SEPAlander
6 hours ago, caleb said:

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.

Thanks for putting numbers to this. Planning a remodel on a home we purchased a few years ago. The home was on the smaller side of many we looked at, and is modest in footprint compared to a lot of our friends. For the remodel, I’ve drawn up four sets of plans, with each successive one decreasing any increase to SF on the house for the maintenance, operating and tax reasons. Nice to see my “common sense” planning backed by some numbers.

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bennelli-banger

                     By doing some fairly basic planning, like plugging in a certain % of your income into the 401k and adding in any match your employer provides, then extrapolating out a fairly modest rate of return like 5.5% or something in that range, you have a feel for where you may be at age 55, 60, 65 etc...and you can look at your social security estimate fairly easily...so, once you have done some planning, and have an idea where you may fall at some select ages, you can spend some $ now a little more freely...I know too many people that get whacky about spending some $...we never moved after buying our first house for 148k 26 years ago...we put some $ into it, but it is now a bit big for just 2 of us.  all I care about is freedom...I  don't know  the last time I spent more than 15 hours in a week in my office...I do work from the phone, so when I am walking, driving, etc I field calls from clients--in fact, my office phone rings right to my cellphone.  But I get about 2-4 calls a day, on average, mostly under 5 minutes each.   I hate wearing "office clothes", I hate office decorum, I hate politics, etc..I am good one on one with clients...very straightforward, no games for the most part.  Anyway, $ is WAY overrated once basic needs are met and one has health insurance, property/casualty insurance, etc...oh, speaking of P and C insurance, increase your deductibles if you can afford to, it will pay off in just a few years even if you have a claim.  I have never filed a homeowners claim in 26 years...haven't filed an auto claim in over a decade, maybe 15 years...crank those deductibles way, way up, or even just carry liability on the auto's if you can afford to start over if you wreck a car...

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jeff88
On 5/16/2019 at 4:19 PM, snapt said:

I like to eat and drink well and visit different corners of this planet. I think I'll appreciate that more on my death bed than a robust bank account. YMMV.

It's all in the timing.  One of my pals says he wants to be down to his last nickel when he croaks.  I ask:  How do you time that?

 

Too many timed it really wrong and are broke long before it's time to pass on.  Believe I'd rather pass something nice along to loved ones even though it may not be much.

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erik meade
1 hour ago, bennelli-banger said:

and you can look at your social security estimate fairly easily..

My social security is easy to look up, since my employer does not  participate in the Social Security system.  Neither does my wife’s. 

 

 

 

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Kansas Bound
25 minutes ago, erik meade said:

My social security is easy to look up, since my employer does not  participate in the Social Security system.  Neither does my wife’s. 

 

 

 

Lucky duck

 

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Don Steese

Car payments of  $500+ per month are just crazy, but crazy for me might be perfectly sane to some other fool. I also get  a huge charge out of folks who buy the "house of their dreams" then a few years later spend a small fortune remodeling it. It's exceedingly common though. Just look at the parking lots at Lowes and Home Depot. We worship our homes in this country and the home improvement places know it!! Just like clothing designers they engage in planned obsolescence. One decade it's Corian countertops, then slate is all the rage and if your home still has Corian, you're a second class citizen. Shag carpeting was in, then it was out and if you had it you were whispered about at the kid's soccer games. 

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airmedic1

"Shagcarpeting was in, then it was out and if you had it you were whispered about at the kid's soccer games."

I am so fortunate that I could give a s**t about what most people think.  Let them whisper, hell let them post it on social media that my house isn't as nice as someone else's.  I could care less, but I would bet that I owe less money than most of the people whispering. 😁

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gunsrus
9 hours ago, Don Steese said:

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!! 😊

 

Hahaha , Ya gotta have room for all that "stuff" !😀  

Truth is , I built a pretty big house with an in law apartment . The plan was my wife and I would move to the apartment when my daughter got married and she could take over the house . She's my only child so she gets everything anyway . We could stay there a few months as home base and go to Maine or Florida or wherever , whenever . We even offered to put it in her name now and she could take over taxes , heat , electric ..... She refused , she says she's gonna get it anyway so why pay now ? Little sheet ! 

Plans do not always go as planned !  Did I say I need a grandkid !!!!

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gunsrus

Building my house 26 years ago was the best investment I've made . I built and finished as the money rolled in , very little loan . 

The exterior is all water struck brick . There are two steps to the front door , It sits with master bedroom on first floor (I knew this knee would act up someday) . I insulated every interior petition and put a zone for heat in every room . I am able to heat only where we live . We never go upstairs . The only downside is taxes . 

I could not buy my house today and have been offered huge dollars . I will never recoup the benefits but my daughter sure will . 

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C.J.L.
9 hours ago, gunsrus said:

Hahaha , Ya gotta have room for all that "stuff" !😀  

Truth is , I built a pretty big house with an in law apartment . The plan was my wife and I would move to the apartment when my daughter got married and she could take over the house . She's my only child so she gets everything anyway . We could stay there a few months as home base and go to Maine or Florida or wherever , whenever . We even offered to put it in her name now and she could take over taxes , heat , electric ..... She refused , she says she's gonna get it anyway so why pay now ? Little sheet ! 

Plans do not always go as planned !  Did I say I need a grandkid !!!!

 

Everyone wants your guns but I think they are all taking the wrong angle.  :)  

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Don Steese
10 hours ago, gunsrus said:

Hahaha , Ya gotta have room for all that "stuff" !😀  

Truth is , I built a pretty big house with an in law apartment . The plan was my wife and I would move to the apartment when my daughter got married and she could take over the house . She's my only child so she gets everything anyway . We could stay there a few months as home base and go to Maine or Florida or wherever , whenever . We even offered to put it in her name now and she could take over taxes , heat , electric ..... She refused , she says she's gonna get it anyway so why pay now ? Little sheet ! 

Plans do not always go as planned !  Did I say I need a grandkid !!!!

 

When we're in PA. we live in an in-law suite at my daughter's house, which is too much house for her and her husband. Financially it puts a real burden on them and taking care of it is more than they have time for. Judy and I don't really need the apartment as we'd be just as happy at a campground somewhere in central PA. I can be happy pretty much anywhere but I think happiness is a decision.  so our story is pretty much the opposite. People do what they do....and sometimes they regret it. 

2 hours ago, gunsrus said:

 the money rolled in  

 

 

I'm still waiting for that to start happening!! Every time my ship came in, some SOB would move the dock!! 😠

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Remo

When I think back over the course of lives of the people I knew, luck had little to do with financial outcomes. Preparation for the most part beat luck most every time.

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FlyChamps
1 hour ago, Remo said:

When I think back over the course of lives of the people I knew, luck had little to do with financial outcomes. Preparation for the most part beat luck most every time.

 

"Luck is what happens when preparation meets opportunity" - attributed to Seneca

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MTRookie76
On 5/20/2019 at 3:31 PM, erik meade said:

My social security is easy to look up, since my employer does not  participate in the Social Security system.  Neither does my wife’s. 

 

 

 

Must be nice. The rest of us get to be part of a ponzi scheme.

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erik meade
2 hours ago, MTRookie76 said:

Must be nice. The rest of us get to be part of a ponzi scheme.

Ummm.  We are exempt because we are part of the state of Illinois pension system.  

 

The most underfunded in the country. And no social security to fall back on when the state can’t pay... 

 

so....

 

 

 

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