Crazy Prices

Don't be to sure about that. Everything must come to an end. Every great empire has failed. The US will eventually fail. It's a sad fact to hear.

 

Matt,

I’m not trying to make a straw man argument but it’s admittedly pretty easy to paint with too broad a brush when discussing things like this.

Now I would like to preface what I’m about to say by painting with a broad brush, just a positive one:

I want people to be successful. I really do. Even the ones I don’t like. As long as their goals don’t involve making others victims, hurting little kids, or becoming a clown (because clowns are inherently evil); I wish them all the best.

For example I have an older coworker I can’t stand, he’s retiring in about 11 months. I literally wouldn’t piss in his mouth if his teeth were on fire that’s how much I dislike him. That said I don’t think he’s engaged in hurting others or going to clown school, so I hope he has a fantastic retirement and gets to do and see whatever he wants. All while living comfortably without a financial care in the world. He worked hard, saved for his future, and he earned it. It’s too bad he’s a hopeless asshole with little man syndrome, but credit where it’s due he planned ahead for his future.

Now with that out of the way it has to be observed that it’s really really unlikely for the average guy or gal to manage to achieve a respectable net worth if they can’t make reasonable financial decisions and start planning early about retirement. If you don’t get started by about 30 years old, you and I both know a person will be on the struggle bus trying to back fill a retirement plan. I would like to see more people do that and get serious about contributing a decent % of their pre or post tax income to investing in their future. Compound interest and consistently contributing towards retirement are an extremely powerful tool over the course of 30-40 years.

On more specific points about retirees being exposed to stocks in mutual funds, annuities (yuck unless it’s part of a pension), pension funds. That is true, some of those people can’t individually control, but for investments you can control that 5 year window is a reasonable time to solidify your gains. It worked for my parents, but my in-laws didn’t and got crushed. Took them 6-7 years of working past their target to recover, but now they’re doing great (big inheritance’s help…).

On real estate values I have a different mindset than you do. I don’t consider my primary residence to be an investment vehicle. It’s first and foremost a place to live, and until such time as I own multiple single family homes (if I get there) that’s all it is. I’ll make improvements and maintain it for my standards and comfort. If it goes up or down in value I don’t care much at this point, because all the other homes around me will too. Were I to move and stay in the same area I’m not really gaining or losing relative to the local market at this point, but I’ve been here 10 years so my equity position is different than someone who bought last year at the top of the market. A correction is very unlikely to wipe out 10 years of real estate market gains. For seniors I think one of the biggest mistakes they can make is borrowing against their home. It’s a truly horrible idea that robs their heirs, and I wish seniors did not end up needing to do that. This is through the lens of my goal to pass on generational wealth. Not everyone feels a duty to do that.

 

3% isn't great. You can easily earn more.
With yield curves like this and the thought that rates aren't receding anytime soon, it makes equities a tough jump. The thing is though, the M2 supply, (cash, checking, savings, CD's, etc) is still almost $21T and it's only declined small amount. If there is a turn there's lots of liquidity that will be looking for a home.
Life's a carnival, two bits a shot.

 

Coal Dragger, I agree borrowing against your home is usually a bad idea for retirees, but some don't have a choice. Unexpected health issues, nursing homes, hospice, etc...can be extremely expensive. Let's face it, a lot of people retire without an adequate income to cover expenses until they die. They end up being a burden to their heirs, not a provider. It's their fault, no doubt, but its reality in many cases. My wife's parents were that way.

Unlike you, I have no obligation to set any heirs up for life. My parents didn't, but they were never a burden to me either. The whole concept of inheritance smacks of the entitlement mentality I mentioned earlier. I know people who have done nothing with their lives because they know eventually they'll cash in on a big inheritance. That rubs me the wrong way. They won't bury me with a big net worth remaining, but I will never be financially dependent on anyone either. I think that's the way it should be.

It's clear we come from different generations, and possibly different backgrounds. My parents were never even close to the average median income in their lives. But they raised 3 successful children who have enjoyed better lives than they had because they taught us the value of hard work and sacrifice. I just don't see those traits in many young people these days.

Anyway, I appreciate the conversation. I have no doubt you will succeed and realize your retirement dreams. You may even become financially comfortable enough to afford a new Tundra someday.

Matt

 

LOL.

I didn’t say I couldn’t afford one, I just choose not to buy one. I don’t see a compelling 1/2 ton in the new Tundra for what it costs. I’d rather drive something else on a daily basis for the same or similar $$$, and just keep my old one for beater truck duty.

As far as passing on some generational wealth, I obviously have a different view than you do. However, I have no intentions of raising some little trust fund turd. At some point we will decide whether to let my son know (if we hit our goals) he will have a leg up, or just bequeath it to him when we think he’s mature enough to handle it. There will be some set in stone milestones he’s going to have to demonstrate first though once he’s an adult. Like enrolling in, and passing some courses in finance/accounting so he knows how money works, being gainfully employed, generally not being a spoiled little turd etc.

 

I like your attitude, and wish all parents felt the same. Somewhere along the way parents felt obligated to support their kids into their 30s, then inherent them a comfortable life. I was out my parent’s door at 17, and that’s what we all wanted and strived for. Different mindset today.
Matt

 

Yep, I left home at 18 years old and never lived with my parents again until last August. My dad passed away in fall of 2020, and my mom got sick of living alone 950+ miles away, so she took us up on our offer to come live with us. Sold her house last year for 100% profit, and moved up to South Dakota. So far so good, we can help extend her independence and hopefully provide a better quality of life than living alone in the Ozarks seeing her grandson once or twice a year.

 

You are a good man, Sir.

 

I have the occasional moment where I’m a productive member of society. My brother and his wife also offered, they are in Lincoln, NE which was closer.

My house is considerably larger, and we have no other family around to help out with kiddo wrangling etc. My brother and his wife live near his in-laws, so they have more of a support network. After some consideration she felt that she could contribute more to our situation than my brother’s plus we have more physical space. So she’s got a big bedroom and a sewing room all set up for herself. She also enjoys some tax advantages here vs Nebraska since South Dakota has no state income tax.

It’s an adjustment for everyone but most days it’s pretty beneficial. My son remains super stoked that grandma lives with us, he just turned 6 so he’s still in that stage where little kids are fun and enjoy parents and grandparents. My mom feels she has a reason to get out and about doing stuff with the boy, and she enjoys putting on dinner in the evening. I’m gone frequently for work so my wife and my mom keep each other company and keep the kiddo supervised and on track. The only downside is they gang up on me with to-do lists on occasion, but that is life.

Well one other downside is that our old German Shepherd and our Rottweiler have become a couple of fury traitors… they’re pretty much my mom’s dogs now LOL.

 

Well done.

 

What a fantastic conversation this has been, and kudos to the mods for allowing it to happen. Having a constructive conversation over differences and being okay if the other party doesn't agree is a missing skill in today's world.

 

Not hard to spend $30k on a snowmobile these days.
The crazier part is people line up to buy them.

 

my BIL is 41. Lives at home. Never left. Can’t hold a job, drinks lots of beer, smokes pot, cigarettes, “borrowed” money from family and couldn’t pay back (while still being able to afford beer).