1/2 Million Ain’t What it Used to be


Balloons over Cappadocia

Balloons over Cappadocia

 

 

My parents set a really good example for me…but that was the culture they came from.  They  decided to NOT have kids until they were financially secure…meaning they    owned a house & weren’t subject  to a landlord’s whims, and if something happened to my father—the bread winner,  he had life insurance to take care of us kids.  It was middle class values.

I am afraid that, due to the news media and journalists looking for a sob story, the conventional wisdom is now that the rest of the community has to make up for  a  parent’s bad decisions.

I understand the average American citizen carries a balance on their credit card.  I also understand that the average American who  graduated college has college debt—but that only about 25% of adults have  college degrees.  I also understand that  since 2008, when the economy imploded, a lot of people were living to close to the edge of financial calamity and have not recovered.

I am clearly not rich.  I still  shop for clothes at thrift stores, and do all sorts of stuff to economize.  I didn’t think of myself as having assets, but  as I’ve been planning for retirement, I have been proved wrong.

If I retire at 65, will I have enough money to last me if I live to be 100?  Most people don’t  live to be 100, but I’ve had relatives live into their 90’s.  My father turns 88 in a few weeks and is still going strong.

In trying to protect capital from market losses, I started thinking about what *I would do to manage this.  Also,  as I was drafting this, a friend sent me a Zillow link that  showed the estimated valuation of my house.

It wasn’t luck that allowed me to accumulate:  it was pragmatic choices, and learning from my parents.  Sure, I made some choices I really regret (buying a business based on optimism, when I was set to retire at a very young age), but mostly I did ok:

1.  I did not incur college debt.  None. Zero.   I paid cash. In fact, I got an assistantship to grad school:  they PAID me to go.  I have written about this before, but my niece  got her associate’s degree from a community college, and finished her B.A. at a state school.  Her debt was for law school, but she crafted a career and is doing phenomenally well—BECAUSE SHE PLANNED.  Unless you  go to an Ivy League School, or a school kn0wn for a particular program (Johns Hopkins for public health, or Georgetown for International Development), your network or alumni association will be marginal in helping you get a job.  It’s stupid to incur over $20,000 in debt if you aren’t absolutely sure there is a shortage of employees in your field. Majoring in education, or business, or  liberal arts is plain stupid these days.

2. I didn’t have kids.  When you don’t take birth control as seriously as I did, you are gambling with being poor—and the odds are not in your favor.  You are expecting your community to  help you out, and the  politicians generally pay themselves too much money to be bothered with the likes of you—& why should they—or anyone—have to support YOUR PERSONAL CHOICE?  If you do some research about how people live, you will find a few enclaves in the world (Singapore, and even Kuala Lumpur come to mind) where even the poor live  more of a middle class lifestyle.  That is because of cultural sensibilities and the  people in power.  But most of the world’s poor live without running water.   Yet YOU want to have cable TV, a smart phone, and designer clothes?&  cigarettes and beer …& kids?

3.  That’s another thing.  When you CHOOSE to smoke cigarettes and drink alcohol…you are  saying you have more than enough money to  waste.  You do not look mature or sophisticated. You look stupid. that’s a fact.  This is not the 1950’s.  We  know these addictions cause health problems, It’s not loke the information is a secret.

4.  I bought my first house in what would be considered a slum area.  Funny thing, there was no ‘minority’ population, but the housing stock was old.  It cost me $24,000, with $2000 down.  I started building equity.  There was a lot wrong with that house—but the rent did not go up.  I ultimately sold that house, and my current home is worth considerably more.

With the market correction of  2008, this can be done again. Would you forego fast food, cable TV,  cigarettes, going out drinking— to  be stable and start building wealth? You can watch HGTV and learn a lot about looking at a neighborhood, and  ‘feeling out’ a property.  You are not  going to make an old, broken  down house livable on $20,000, but you might  with $50,000–especially if the plumbing and electrical infrastructure are ok.

4.  I chose to live with roommates. Yes, finding people you are compatible with is a serious issues.  I have lived with drunks and other who could not get their lives together.  I  contracted with a school that catered to foreigners  wishing to learn English in the USA.  I took several people from that school, and ultimately  got my current  roommate (12 years and counting) this way—to save money.

5.  I made a point to budget and save money. …and invest money.  Of course, I learned this from my mother.  She didn’t know investing however.  I was lucky one of my friends wanted to start an investment club.  They can be found.  You will learn together.  These days, you can get Money  or Kiplinger’s magazine, do really good research on Google finance, and open a Scottrade account (there are lots of discount brokers).  I also ’round up’ when I  deduct a check (or debit) from my checking account. I always have a cushion  of money I don’t even count on as there.

6.  In times of no employment or slow business, I find other ways to earn money.  I did over night pet sitting for years for a very reputable company.  I collect cans  on the street when I am out walking the dogs, I  find books, furniture, and clothing to resell. Some of my friends do baby sitting, tutoring, proof reading.

7.  I delay gratification. I have a list of ‘wants’, but  I only buy when I find something that’s a good value, and if I’ve met my savings goals.

I think these are all common sense ideas.  But if all your friends are idiots with no goals, who ridicule your  ideas, plans, and way of life, you will be  brought down.  Think about it.  Nobody is going to save your ass but you.  & what is $500,000?  Over  35 years….or 420 months…that’s $1190 per month (or roughly $297 per week).  Can YOU live on that?

 

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