I have many friends who are in deep financial shit.  Some of them have incomes that exceed $250,000.  They live paycheck to paycheck.

One of them has, no shit, refinanced her house every 6 months for the last 3 years to pay off credit card debt.  The accumulated closing fees must be astounding.  People think of it as "free money", and they forget that every time they refi, the 30 year loan term starts over again and they owe even more money.  Granted, if the RE market goes up and then they sell, it's not really a problem.  But some of these people have house payments that scare the hell out of me - if they lose a job they are doomed.  They frequently have $2000 in car payments every month but live paycheck to paycheck.  They don't save a penny and have less than a thousand bucks in their checking accounts.  I try to help them but it falls on deaf ears.

Its the same old story with the debt, they charge groceries and the electric bill, fast food, etc. because their expenses literally exceed their income. Thankfully McDondald's accepts credit cards now!!!

As for me, my daily driver is a 1998.  I have no car payments.  The newest car we own is a 2005, but it is paid for, and I didn't borrow from my 401k or take out a home equity loan to do it.  The only thing I would ever take equity out of my house for would be an investment.

I wasn't always this way.  When in my early twenties, I was fortunate enough (or maybe unfortunate enough) to make a very good income.  My wife and I lived in a $600 a month apartment, and had over $800 in car payments.  We would buy toys all the time, and eat out probably 5 times a week, Lone Star being the low end of the types of places we would eat.  It was moronic.  My cell phone bill was over $180 alone.  Net income of over $1200 a week and yet the rent was frequently late and the utility bills and car bills were always late.  In addition to this we ran up a good amount of credit card debt.  I put off things like buying new tires because I didn't have the money.  I had an extremely nice gun collection though.....

It was like a crack habit - as soon as my weekly direct deposit check hit, we'd go shopping.  You would have thought I would have gotten the hint when I started taking payday loans for $600, almost every week.

Then I got layed off as part of the great tech bubble.  My world was about to change. (we had just bought a house, by the way)

I was out of well-paying work for over a year and a half, with no savings and a small severance package.  Let me tell you, it's amazing how you learn to really cut down on what you thought were necessities. You become very aware of what things cost, even unnecessary car trips. When you are putting gas in your car from the lawnmower supply you tend to drop your wife off at work and come DIRECTLY home, saving all the week's errands for one trip.

We got rid of one of our cars, so we were down to one and had only the minimum insurance on it. I wound up selling all my guns except one .38. I got rid of our cell phones.  I would do things to make a little money, and try to parlay that into more money by buying broken stuff at a garage sale, fixing it, and reselling it. Although my "work" skills were in tech and finance, I worked on a roofing crew for a month with some friends because when I was younger I learned how to do that stuff. I would also go to farm auctions and buy stuff that I knew I could resell on Ebay or fix up and part out locally. Did books for a friend's business one day a week. Stuff like that. I didn't make much money, but I made enough. In tough times, your skills and knowledge are what will really bail you out of trouble.  I learned other valuable skills, like how to set up payment plans on gas and electric bills.  It was a wreck.

While before the job loss our "spending money" for entertainment and "fun shopping" was over $300 a week, after my job loss we did just fine on $80 a week which now included groceries and gas. Because of that, I am much more frugal these days and able to save a lot more money, rather than pissing it away on toys and $1800 car payments.  When you need to, you CAN live on much less money than you ever thought possible. The end result was that the loss of my high-paying job was a blessing in disguise, because it taught me proper money habits. Nowadays, the thought of a $180 phone bill, $1800 car payment, or dropping $2000 a month at the gun shop (yes, I did this) literally makes me nauseous.  Things I "needed" once upon a time I could care less about now - I'd rather invest the money.  Not being able to buy "stuff" broke me of my addiction to it, and for that I am thankful.  Now, my income is a few times what it was back then, and I save almost 50% of it.  I could go out and stroke a check for a new luxury car, but I'd rather drive my 1998.

I don't even want to think about what would have been had we kept running up debt.  Most likely we would have wound up homeless.

Sadly most of America lives in debt... Did you know the national Savings rate (% of income people save)  is now NEGATIVE for the first time?

what business are you in now? sounds like you have things together....

your apartment cost $600 a month, and you thought that was expensive?!?!? around here, a tiny studio apartment costs $1000 a month!  where in CO was this?

Quoted: your apartment cost $600 a month, and you thought that was expensive?!?!? around here, a tiny studio apartment costs $1000 a month!  where in CO was this?

I pay $350 for a studio apt near Ft Worth.  

Quoted: your apartment cost $600 a month, and you thought that was expensive?!?!? around here, a tiny studio apartment costs $1000 a month!  where in CO was this?

Fort Collins, CO.  What I meant is not only was it ONLY $600 a month (and we STILL had no money), but our friggin car payments were more than our housing because we were such idiots.

Save? Invest??
For what?? You cant take the money with you when you die, so enjoy it while you can!

Thats a good story and a good point and all, but I must get it over with and call you a retard.



Anyway, once again, very good story and great point in life.

Its the age old argument.

Do you eat to live or live to eat.

Some live to eat and others eat to live.

Quoted: Save? Invest?? For what?? You cant take the money with you when you die, so enjoy it while you can!

That folks sums up the average American

I speculated in options, knowing full well everything about them

Ask me how it  went

Quoted: what business are you in now? sounds like you have things together....

I do consulting for a large company here in CO.  I have been both a CIO and controller, so my background is ideal for Sarbanes-Oxley IT compliance projects.

Even if I made $20,000 per year, I would better off than when I made 4 times that amount.  It's funny how it's not the money you make, but what you do with it.

And I am a huge fan of buying wholesale, adding value, and selling retail.  (It worked pretty well for Sam Walton....) During that time, as I learned good money habits and accumulated some cash, I would do stuff like buy a newer car that needed an engine for say $500, replace the engine, and sell for $1000 profit.  

So I guess my point is that in addition to finally getting religion about financial responsibility, a wide variety of skills is what saved my bacon.  There was ZERO money for me in playing with servers and routers back then, but I could do framing, roofing, and fix mechanical stuff because thankfully, I was taught all that stuff when I was younger.

Many men these days can't change their own oil or hang a picture on the wall because they don't have the skills - they were coddled as a child, which brings me back to my thread about high school kids driving new BMW's..

Moral of the story:  Live BELOW your means.

Truer words have never been spoken.  

I had a similar life lesson, except my poverty started early, and the financials didn't improve until about age 30.

Knowing how to live cheaply is an under-appreciated skill.


"Freedom" is knowing that you can afford to pay cash for anything you need.

Quoted: Moral of the story:  Live BELOW your means. Truer words have never been spoken.   I had a similar life lesson, except my poverty started early, and the financials didn't improve until about age 30. Knowing how to live cheaply is an under-appreciated skill. "Freedom" is knowing that you can afford to pay cash for anything you need.

You are a wise man - you were able to sum up everything I typed in 3 sentences.  Thanks.  Words to live by.

btw, what do you do now?

See the post above yours.

PeteCO

Good tale and advise.

I have driven paid for cars for years and years.

When somebody asks why or gives me crap about driving
beaters, I reply that my house is just about paid for.

Being dept free is one of the best feelings there are.


GM

I have been pretty fortunate - my folks taught me never to spend more than I make or can pay off and while being a military officer isn't incredibly lucrative, it isn't starvation wages either.  My biggest mistake was saving too much and not investing enough in my early 20s.  CD and saving interest rates were high, but so was inflation.

My assistant Maintenance Officer was an LDO (prior USAF enlisted).  She left her money in stock mutual funds all the way down the 2000-2003 bear market.  With interest rates at all time lows and now figuring that she did not want to stay in and try to make O5, she thought that shifting all her investments to bond funds would be the best thing that she could do.  I tried so hard to talk her out of it, explaining that bond interest was at an all time low and what happened to the NAV of bond funds when interest rates rose, but she refused to listen and moved all of her money not quite six weeks before the huge cyclical bull market that started in March of 2003.  

Having the privilege of leading so many young sailors, I have seen some amazing financial ineptitude, including a car torching/insurance fraud that landed a few of my sailors in jail, but I expected more from an officer with nearly 20 years service than the emotional impulse asset shift described above.

We live almost from paycheck to paycheck.  Things are getting a little better but with my medical bills piling up and enablity to work as much - we're skidding on the seat of our pants.

When my husband and I got married He had made some very poor investments and was in debt up to his earlobes.  I sold my house and paid off his credit card debt and we lived on my salary while his salary went directly to his creditors.

We about got our head above waters when I sued our school district for lack of services for my son.  15K dollars later we won our lawsuit against the school district but was not granted legal fees.  Furthermore I had our youngest son and stopped working outside the home.  We refinanced the house to pay off the attorney fees and to build David's shop.  

While Wyatt was little and I wasn't able to work [or at least unwilling to put him in daycare] we fell behind about 6K a year, which went on credit cards.

Now that my business has taken off I have all but one credit card paid off [I owe about 2K] and 1 bank loan for 13K.  It was my hope to have those paid off by last year but breast cancer has slown me down considerably.  I'll have that last credit card paid off this year but will have to refinance that loan.

My newest car is a 1995 Oldsmobile Cutlass which I use for as much as possible.  It is paid for.  My business car is our 1989 GMC Suburban paid for.  My husband drives his 1941 Chev pick up to work and his 1975 GMC Blazer is our hunting rig.  The 1967 Camero is in hawk due to the above Bank Loan.

We have about $700 in savings as a cushion.  Pretty skinny to say the least but at least this year I'm not buying groceries on my Visa.

Patty

I save like a miser, but I don't invest.  

I probably need to, I really need to do my homework and learn about it.  Parents never did, so Im at a square one.


About 20% of my paycheck goes into a savings account.  

Quoted: Save? Invest?? For what?? You cant take the money with you when you die, so enjoy it while you can!

Let me guess, you're under 35?

 Unless you plan on working until you drop dead, you'd better be putting some $$ away in some fashion.

One of the greatest joys in my childhood was first just watching and then, as I got older, helping my father about the house, fixing things, pouring cement, building doors, shelves, etc. Learning such "DIY" skills is an essential part of growing up, I think. I still love to stand in a hardware store and look at cans of paint, drywall, and wood screws. I suppose I am spoiled though, since 90% of my family are engineers or architects who love to putter about the house.

Quoted: Quoted: your apartment cost $600 a month, and you thought that was expensive?!?!? around here, a tiny studio apartment costs $1000 a month!  where in CO was this? I pay $350 for a studio apt near Ft Worth.

Hey Nationwide........

Whats with the new avatar and local?


Travis

Keep spending.

Me and my sector funds love you.  

About three decades ago, I invested in a little known company byt he name of Progressive. I bought about $2000 in shares, today those SAME shares are worth about $2,150,000.00.

Invest in your futures now gentlemen, instead of buying a new Rolex buy $4500 in stock and dont touch it for 25 years. Trust me, you'll be happy when you're old and dont have to go to work.

That is all.

Quoted: www.5images.com/uploads/7be5704d1d.gif

Viva China.  Who do you think is buying all those bonds?

I have no debt.

I do use a credit card.  but that is to protect my main accounts when purchasing on-line.  I pay off the balance every month.


now I am thinking about getting a new motorcycle................

Quoted: Sadly most of America lives in debt... Did you know the national Savings rate (% of income people save)  is now NEGATIVE for the first time?

nope, not the first time... it happened once before but we called that the great depression.

When I finished my residency I was 110K in student loan debt-medschool student loans accure interest from day 1 and that rate floats 3% above the prime.

We bought a new vehicle.

Had some credit card debt(not too bad)

Bought a home.

I hate debt, absolutely hate it. My wife, like most all women doesn't care that much about it except that it made me terribly unhappy.  I managed to save some money to pay off my medschool debt by just putting money in an account in my name only.  One day I finally told her we were going to go over all this shit and talk about it.

We were paying out $28K just in interest yearly. This was completely unacceptable to me.  We made a plan based on a budget to pay off my medschool debt in 1 year. It took 17 months but it was done. Also paid off the car, CCs and paid down mortgage a little as well as refinancing. Reduced our monthly payments from $4300/mo to $500/mo and reduced our yearly interest payments from $28K to $4K.  We did all of that in a 2 year period.

We took out an ARM on our 2nd mortgage at 3.85% expecting that the house would be paid off in 3 years. We could have done so easily but my wife fell back into here minimum monthly payment crap and spending money on crap we didn't need nor use. WTF is it with women and that propensity to just buy shit? WTF?

I did buy quite a few guns over the past few years, I will admit, but I don't feel bad about it as I was the one who always did without for over 2 decades and least my guns retain value unlike the fucking crap she buys at Wally Mart....
Besides, it was a drop in the bucket compared to what got pissed away on a monthly basis.
It is also fair to note that my wife works as well.

Anyhow this made me very unhappy again, and I kept telling her, let's pay this shit off, I ain't going to keep doing what I was doing forever. I hated my fucking job and just had enough. So one day, the week after our youngest graduated, I just gave my notice and told her I was done.
I told them all, wife and kids, that they didn't respect or appreciate how hard I was working or they wouldn't act like it meant nothing by flushing my GD money down the fucking toilet month after month, year after year.

Fortunately, we have 75% equity in our home with a $500/mo payment and I owe just a little on a car I bought last year. We have 2 fairly new cars and one old SUV I use to beat around in the woods with.  I cannot remember the last time we carried a balance over on our CC. So we are in decent shape and I had put some money away working overtime, cashing in my vacation, etc.  I'm going to work again, of course, but I really needed a fucking break after years of ridiculous hours with assholes administrators and obnoxious patients.

We're not in dire straights at all and we have some invested in retirement vehicles but damn. We could easily have been 100% debt free by now AND have more invested for our future.

I love my wife dearly but in all honesty, I would never marry again.
I would have a lot invested on my own by now as I always lived a spartan existence and am a saver.


I fell just a little bit better now.

Just a little.

I'm 31, have no debt except for the mortgage which is at about 50% LTV.

When I married my wife she had $20K in debt and was on a credit counseling plan that had ruined her credit. I paid it all off the first week we were married, most of it was student loans and credit cards she'd run up while getting her degree, but I told her then it was the last debt I would tolerate, that marrying me meant we lived within our means. She hasn't even asked to carry a balance on anything since. People need to be taught how to manage their money, look at the financial habits of their family and that's what they'll consider to be normal. If your girls family has three mortgages on the house and a bunch of CC debt you're in for a rough ride.

How you manage your money means a lot more in the long term than how much you make, I know people who make $25K a year who have significant net worth built up, retirement plans, etc., and I know people who make $150K and are one layoff/illness/injury away from bankruptcy.

As I've encouraged folks before, if you are in debt, spend the money to buy this book.

product.half.ebay.com/The-Total-Money-Makeover_W0QQtgZinfoQQprZ2683528

It's "The Total Money Makeover" by Dave Ramsey.  It will change your life.

My daughter and her husband read it and applied it to their lives and two weeks ago celebrated the "Debt Free Friday".  They paid off all debt except for their home.  She is doubling her payments to pay it off ASAP.

Like Dave says, "I live like no one else, so that some day I can live like nobody else."

(I am totally debt free, and retired.  Thank God for His Grace.)

Ever thought of taking a Dave Ramsey class with your wife?  

I know first hand what you're going through.  I don't make anywhere near as much as you do so when my husband blows $50 bucks here and $75 there I about have a cow.

My X wife and I used to see how cheap we could live for a week, for fun. Some people may not call it fun, but we did. When you try, you can get by on very little. Our income wasn't great back then. Later, our income increased, and so did HER spending habits. When we got divorced, it cost me a fortune. We had a business that I bought her out of, along with her half of the equity in our home, plus a wad of cash. I thought I was going to be broke, paying the same bills, with her income gone. I had no idea how much money she was blowing. The next thing I knew, my bank account was growing, and all debts (excluding mortgage) were paid off. The divorce settlement paid off all her bills. She makes 80k a year, and is now broke, and tried to borrow money from me. She RENTED a condo, furnished it with all new furniture, bought a $50k car, tons of new cloths etc... etc.  With some, the more they make, the more they will spend, and still be in the same finacial shape they were in when they made far less. I passed on lending her money, but did offer to send her to a money management class, she didn't accept. That may sound like an asshole thing to do, but during our divorce, she called me lazy. I was working around 100 hrs a week, she worked less than 40. I was working, and she was busy spending. Thankfully we didn't have children.

Quoted: When I finished my residency I was 110K in student loan debt-medschool student loans accure interest from day 1 and that rate floats 3% above the prime.

The curse of American universities. The annual tuition at Cornell is $31,000 a year and P-town is weighing in at a massive $43,000 for the 2005-2006 school year (including mandatory room & board costs).

The tuition for the 2005-2006 period at the University of Edinburgh for UK/EU residents was £1100 for the sciences and medicine and £900 for the humanities. Multiply by 2 if you want a $ figure. Overseas students (non UK/EU citizens) paid ten-fold, which is STILL cheaper than an American education.

Ah yes, but how do they compare? Well, the University of Edinburgh has the highest rated computer science department in the country, and it is the only Scottish university and the one of only three British universities (Two quid if you guess the other two) to be members of the Coimbra Group and LERU, two associations of the leading European universities. Ok, I will be fair, it's only considered to be around the 9th best university in Europe. But it's still a pretty decent school from what I hear, certainly better than Columbia hould
But hey, I guess the goal of a university is to make lots of money, not to teach, right? I am so sorry that I forgot that. I apologize to all the American universities for having forgotten the importance of profits over education.

My parents drilled into my head this quote:

"It does not matter how much you make, but how much you don't spend"


I have also rammed this into my own kids, who so far,( 2/3 of the way through) are little nazi money misers
Cheap bastages

Quoted: My parents drilled into my head this quote: "It does not matter how much you make, but how much you don't spend" I have also rammed this into my own kids, who so far,( 2/3 of the way through) are little nazi money misersheap

What, they knit you socks for your birthday? I would love to get some nice warm wool socks on my birthday!

We have two vehicle payments, one for the truck in the avatar (2003 Ford F-350 Powerstroke) and one for the family vehicle (2003 Ford Explorer). Both were more or less necessities. The truck is needed for my business and the Explorer was needed for hauling around our family of five (our 1993 Honda Civic coupe wasn't cutting it anymore). We sold the Honda, put the money towards the principle on our house and bought the Explorer at 0% interest.

We don't put alot away each year towards retirement, but that is mostly due to our accelerated attempt to get rid of debt. We try to keep three month's worth of bills set aside in savings, too.

We pay off our CC balances every month, btw.

Quoted: Quoted: Save? Invest?? For what?? You cant take the money with you when you die, so enjoy it while you can! Let me guess, you're under 35?  Unless you plan on working until you drop dead, you'd better be putting some $$ away in some fashion.

I've heard people comment on how they plan to work until they drop dead.  The problem is that they do not take into account potential health problems.  A stroke, cardiac problem, bad back, or any number of other problems will quickly change their plans.

Here's my approach. Just a few quick things off the top of my head:

1. You always need to have enough assessable liquid assets that will pay your normal bills for 6 months MINIMUM (1 year preferably). You never want to get into a situation where you lose your job and have to sell your house, cars or investments out of desperation. First off, it takes alot of time to sell a house and move into a new place etc, time that you could be spending looking for a new job. Second, if you have to sell a house or investments under those conditions, you'll certainly take much less than you normally could get if you weren't under pressure to sell. Third, selling a house and/or moving costs big money in commissions, deposits, paying movers etc....money that you don't need to be spending/wasting if you're having financial problems.

2. NEVER charge anymore on your credit cards than what you can pay-off in full each month. NO EXCEPTIONS!

3. Never feel like you are in competition with others to own things. This is a certain recipe for disaster.

4. DO NOT go shopping to pass the time. People that do this are like crack-heads. This will fook you up financially down the road.

5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land.

6. Don't invest in anything risky (like the stock market) unless you're an expert at it. Stick with the low risk stuff. In the long run, you'll come out far ahead.

7. No matter what the jewelry industry wants you to think, most jewelry is not an investment and in MOST TYPICAL CASES you'll lose big if you need to sell it.

8. Don't over-insure yourself w/ large life insurance policies or other insurance. The odds are you'll never need it. Never buy the extended warranty.

9. Only buy cars that you can pay cash for. Buy a Honda or a Toyota if you are having a hard time making ends meet. They will cost you far less in years of ownership. NEVER lease a car unless it's for business purposes. The only thing you should be financing is your house or some land that you buy.

10. Hire a great accountant. They can save you thousands every year in income taxes. It's not expensive. I pay maybe $300 a year for that service. The govt is gonna use every friggin law they can to legally fook you out of all the tax money they can. Your accountant can use every legal means to keep them from getting it.

11. If your place of employment matches your 401K deductions, put at least the maximum in that you can get matched. Put in more if you can afford it.

12. The world is filled with companies that want to make you think that you need what they are selling. In most cases, you don't need it.

13. Be very careful who you marry. NOTHING will ruin your financial future quicker than marrying and/or divorcing the woman you should have never married. When you marry, a prenup is a very wise thing. Also, try to limit your community property to your house and nothing else. Put your car in your name, her car in her name. You each should have your own savings accounts and a community account that just keeps enough in it to pay bills. This minimizes your risks if the worst ever were to happen. Also get a post-nup to protect your personal 401K retirement accounts.

Quoted: Quoted: When I finished my residency I was 110K in student loan debt-medschool student loans accure interest from day 1 and that rate floats 3% above the prime. The curse of American universities. The annual tuition at Cornell is $31,000 a year and P-town is weighing in at a massive $43,000 for the 2005-2006 school year (including mandatory room & board costs). The tuition for the 2005-2006 period at the University of Edinburgh for UK/EU residents was £1100 for the sciences and medicine and £900 for the humanities. Multiply by 2 if you want a $ figure. Overseas students (non UK/EU citizens) paid ten-fold, which is STILL cheaper than an American education. Ah yes, but how do they compare? Well, the University of Edinburgh has the highest rated computer science department in the country, and it is the only Scottish university and the one of only three British universities (Two quid if you guess the other two) to be members of the Coimbra Group and LERU, two associations of the leading European universities. Ok, I will be fair, it's only considered to be around the 9th best university in Europe. But it's still a pretty decent school from what I hear, certainly better than Columbia or Berkeley , I should think. But hey, I guess the goal of a university is to make lots of money, not to teach, right? I am so sorry that I forgot that. I apologize to all the American universities for having forgotten the importance of profits over education.

I hear ya.
I started college in '81 and my first semesters tuition was $440.  When I graduated in '85 it was $880. Doubled in 4 years.

Now I had my own place and took care of all my other expenses but my son's first sememster of college was $9K with room and board and that included a 10K/year academic scholarship!

Anyway, it is what it is. Not going to change because I want it to though I have always felt that education was a good deal for everyone, including the taxpayers.

BTW, I am paying my son's way as I have made too much for him to get any grants or loans. Not terribly fair to him not to help him out and he is a good responsible kid who works hard. I am very proud especially when I look at how many losers are out there these days.  By the time he hits his junior year he will be able to get a loan.  In any event, I told him I would do whatever it takes to get him through - he gets 4 years out of me provided he cuts it grade wise.  Sure not going to pull the rug out from under him.

Quoted: 11. If your place of employment matches your 401K deductions, put the maximum in that you can get matched.

A lot of that looks like excellent advise (I say a lot, and not all because of my limited knowledge).  A point i would mention here is that if a person can put more than what is matched, they are still ahead of the game.  For instance, if a person gets $5,000 matched in a deferred comp, if they put another $5,000 in, they have an instant 50% return on their investment.  Not bad.

Quoted: Quoted: 11. If your place of employment matches your 401K deductions, put the maximum in that you can get matched. A lot of that looks like excellent advise (I say a lot, and not all because of my limited knowledge).  A point i would mention here is that if a person can put more than what is matched, they are still ahead of the game.  For instance, if a person gets $5,000 matched in a deferred comp, if they put another $5,000 in, they have an instant 50% return on their investment.  Not bad.

agreed. I should have said: 11. If your place of employment matches your 401K deductions, put the maximum in that you can get matched at a minimum.[/i]

I hear you guys. The ex-wife and I ran up close to $100K in six years, and I'm still saddled with $29K of it.

Fortunately, due to two years of making good (sometimes VERY good) money and having almost all living expenses paid for for over a year, I'm down to that $29K, and maybe $1,000 on my credit card. I paid off everything else, and paid off my truck (sent a HUGE check) last month.

I'll be closing on my house this coming month, and starting up my 401(k). Life is good.

Thank you Lord, for Your help!

Quoted: Quoted: 11. If your place of employment matches your 401K deductions, put the maximum in that you can get matched. A lot of that looks like excellent advise (I say a lot, and not all because of my limited knowledge).  A point i would mention here is that if a person can put more than what is matched, they are still ahead of the game.  For instance, if a person gets $5,000 matched in a deferred comp, if they put another $5,000 in, they have an instant 50% return on their investment.  Not bad.

Unless I'm misunderstanding you this is wrong.

You get an instant 100% return on the first $5K, you get no instant return on the next.

You're figuring a 50% return on the $10K but you've already realized that gain on the first $5K in your example.

If your 401K is the best investment available you're still fine contributing more than the match, but my experience has been that's never the case.

Quoted: 5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land.

This has me wondering.  Are you referring to farm land to lease?  Speculating on residential real estate or maybe commercial?  Is there an expectation of increasing land values in a growth area?  How much will taxes erode your appreciation?

I have to say, the idea of actually owning something rather than a stock has a great deal of appeal.  Can you share some of your experience here?

Quoted: Quoted: 5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land. This has me wondering.  Are you referring to farm land to lease?  Speculating on residential real estate or maybe commercial?  Is there an expectation of increasing land values in a growth area?  How much will taxes erode your appreciation? I have to say, the idea of actually owning something rather than a stock has a great deal of appeal.  Can you share some of your experience here?

Simply look to the far out-reaching areas where you live, where the land prices are still pretty reasonable. Areas where you think in a few years down the road, will become more populated and more desirable. Typically taxes on land are just a few hundred dollars a year for a 1/4 - 1/2 acre lot. The goal would be to pick up a residential lot for maybe $50K and then sell it in a few years for $75+. To me, this is far more attractive and safer that trying to make some money in the stock market.

Quoted: Quoted: Quoted: 5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land. This has me wondering.  Are you referring to farm land to lease?  Speculating on residential real estate or maybe commercial?  Is there an expectation of increasing land values in a growth area?  How much will taxes erode your appreciation? I have to say, the idea of actually owning something rather than a stock has a great deal of appeal.  Can you share some of your experience here? Simply look to the far out-reaching areas where you live, where the land prices are still pretty reasonable. Areas where you think in a few years down the road, will become more populated and more desirable. Typically taxes on land are just a few hundred dollars a year for a 1/4 - 1/2 acre lot. The goal would be to pick up a residential lot for maybe $50K and then sell it in a few years for $75+. To me, this is far more attractive and safer that trying to make some money in the stock market.

I have some intel for you. Banks are more reluctant to *lend on land speculation alone.Land with property is a whole diffrent ball game. I'm semi retired. I could live for 10 to 13+ yrs on savings alone. I never financed anything except R.E.  and 1 maseariti quatraport in the 80's. I was getting divorced andneeded it

Quoted: Quoted: Quoted: Quoted: 5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land. This has me wondering.  Are you referring to farm land to lease?  Speculating on residential real estate or maybe commercial?  Is there an expectation of increasing land values in a growth area?  How much will taxes erode your appreciation? I have to say, the idea of actually owning something rather than a stock has a great deal of appeal.  Can you share some of your experience here? Simply look to the far out-reaching areas where you live, where the land prices are still pretty reasonable. Areas where you think in a few years down the road, will become more populated and more desirable. Typically taxes on land are just a few hundred dollars a year for a 1/4 - 1/2 acre lot. The goal would be to pick up a residential lot for maybe $50K and then sell it in a few years for $75+. To me, this is far more attractive and safer that trying to make some money in the stock market. I have some intel for you. Banks are more reluctant to *lend on land speculation alone.Land with property is a whole diffrent ball game. I'm semi retired. I could live for 10 to 13+ yrs on savings alone. I never financed anything except R.E.  and 1 maseariti quatraport in the 80's. I was getting divorced andneeded it

Good advice.

Maybe those that are having a hard time getting a loan on land speculation should invest their money in lots of 250 M16 magazines, as an alternative.

Quoted: BTW, I am paying my son's way as I have made too much for him to get any grants or loans. Not terribly fair to him not to help him out and he is a good responsible kid who works hard. I am very proud especially when I look at how many losers are out there these days.  By the time he hits his junior year he will be able to get a loan.  In any event, I told him I would do whatever it takes to get him through - he gets 4 years out of me provided he cuts it grade wise.  Sure not going to pull the rug out from under him.

I was faced with the same situation, my father was in the income bracket where I couldn't get any money either by award or loan, so that's how I ended up in the UK. I don't think the brackets are very fair. Even if you make half a mil a year, I should think that a $40,000+ a year tuition is a major expense especially when you have more than one child going to university. Oh well, I think I am better off without having had to take stupid, pointless, "core" curriculums and having to put up with idiots who are only there to party. In the UK, going to university is not a given, even if you can afford it.

Quoted: Quoted: Quoted: Quoted: Quoted: 5. Never live above your means. If you're not saving 20% of what you make each year, you're spending too much. Every few years, take some of that money that you save and spend a little of it on buying parcels of land. This has me wondering.  Are you referring to farm land to lease?  Speculating on residential real estate or maybe commercial?  Is there an expectation of increasing land values in a growth area?  How much will taxes erode your appreciation? I have to say, the idea of actually owning something rather than a stock has a great deal of appeal.  Can you share some of your experience here? Simply look to the far out-reaching areas where you live, where the land prices are still pretty reasonable. Areas where you think in a few years down the road, will become more populated and more desirable. Typically taxes on land are just a few hundred dollars a year for a 1/4 - 1/2 acre lot. The goal would be to pick up a residential lot for maybe $50K and then sell it in a few years for $75+. To me, this is far more attractive and safer that trying to make some money in the stock market. I have some intel for you. Banks are more reluctant to *lend on land speculation alone.Land with property is a whole diffrent ball game. I'm semi retired. I could live for 10 to 13+ yrs on savings alone. I never financed anything except R.E.  and 1 maseariti quatraport in the 80's. I was getting divorced andneeded it Good advice. Maybe those that are having a hard time getting a loan on land speculation should invest their money in lots of 250 M16 magazines, as an alternative.

I think not. As Im sure you do not. I purchased 1 LOT in my lifetime I paid 80k for speculating on a trailor park area. I started selling the lot's divied up 5yrs later for 40k per 3/4 acre parcel.I WAS LUCKY> the views were spectactular(picture rock AZ). I divied it up 2- 18 lots. Now the NEW houses in the area go for 150/200K. Mine cost 63k[not in the lots cost, just down the street a bit, a spartan domehome] however its considered a "camp" on 1.73 ac.abutting suaro NP(no new neighbors) and worth alot more 2me!