Sometimes, I just want to bang my head against a wall......

Gene DeMambro · Post by **Gene DeMambro** » Mon Jan 30, 2006 11:46 pm

When will people wise up?

At least when their houses go up for forclosure, I'll have the pick of the litter.

Savings rate lowest since Great Depression

Gene

RACastanet · Post by **RACastanet** » Tue Jan 31, 2006 12:25 am

Definitely a problem. I continue to flog my kids with advice on investing. It drives them crazy but they are starting to emulate Dad!

Rich

MikeK · Post by **MikeK** » Tue Jan 31, 2006 1:49 am

I read that too. Each paycheck we put something into long term savings and still manage to go out to eat with the kids once a week to someplace like Firebirds or Tara Thai. But then we didn't buy as much house as we could afford but just what we needed, the cars are paid off so that's an expense we don't have until we get that new Mustang or Challenger, and we don't buy things to stay up with the Jones'.

My wife started the kids with savings accounts with the deal that she will match 100% of anything that has been added to their savings accounts at the end of the year. We'll also be letting them learn about the stock market this summer.

Bill Glasheen · Post by **Bill Glasheen** » Tue Jan 31, 2006 2:55 pm

I've heard it said that we should be teaching our kids a basic finance class in high school. If only kids learned one concept - the time value of money - their lives could be so much better. And of course that "time value" thing works in both a positive and negative way...

I'm with you on the habits, Mike. Cars are paid off, home is less than we can afford, and I'm ready for my next layoff. I think it's a healthy thing to be running a little scared.

And it's very empowering knowing that maybe one day you'll be able to work not because you have to, but ONLY because you want to. I'm waiting for that day when I can tell my boss to piss off when he oversteps his bounds. I've already started a bit. A funny thing happens when you aren't living from paycheck to paycheck. You take more risks. And with risks come rewards.

And with cowering behavior comes more tyranny.

- Bill

MikeK · Post by **MikeK** » Tue Jan 31, 2006 3:19 pm

and I'm ready for my next layoff.

Something all too common these days. I was a contractor so I knew that I would face some down time and always made sure we had enough money in the bank for when it happened. I think at this point we could go a couple of years without losing the house, but of course the kids college funds would be hosed.

RACastanet · Post by **RACastanet** » Tue Jan 31, 2006 5:40 pm

And it's very empowering knowing that maybe one day you'll be able to work not because you have to, but ONLY because you want to

Heheheheh. Yes it is.

I have been sub teaching a lot and the school has encouraged me to become a full-timer. So, I have begun the process.

The state licensing agency looked at my transcripts from UPitt (go Big East), saw what was behind my BSEE and quickly endorsed me as both a higher Math or Physics teacher. This morning I called to get an interview at the county job fair but it was too late as all slots were filled. However, when I told them of my endorsements they jumped for joy and are going to see me at my convenience! It seems that science types are precious commodities.

The school systems are somewhat defensive about the pay structure - starting salary is a whopping $34,000 - and asked why I would take such a job. Why? Because I want, not because I need to. They liked that.

I will be picky on the school though, and stay in this end of the county. If I need to wait for a job in the area I will, because I can! (This is not snobbery, I just want as short a commute as is possible.)

Rich

IJ · Post by IJ » Tue Jan 31, 2006 9:48 pm

Read an interesting article a month ago from a economist about how we are spending more and saving less. It addressed the common perception, detailed in some books, that americans are buying all kinds of amenities like cd players, tvs for every room, appliances, fancy cars and whatnot, and saving less as a result. They went thru and looked at the data and it looked like the families of old DID spend less on such things--but not much less. As it turns out, plumeting prices for technology and improving reliability mean that while we've spent more on some nice things, other costs have dropped substantially and basically compensated. The older model of a single worker with a stay at home person who could enter the work force if the primary worker got sick has NOT been replaced with two people working for luxury items. Most of our income goes to things like transportation and mortgage and the luxury items have been compensated by other reductions in cost. Lots of families, even if they cut out amenities, would be very hard hit by the loss of one of the two breadwinners.

That said, its still wise not to buy extra junk you don't need. My big splurge was an accord... honda even paid me to finance it because my rate is less than other investments. I'm maxing out my 403b and working some extra shifts to move a lot of $ into investments early in my career. My major expense was a gamble / investment in san diego--adjacent to the most expensive real estate zipcode in the USA. That has gone up about 85k and now down we estimate 15k in one year or so. But I make my own food largely... and my hobbies are karate, home remodels and wood carvings... so life is still keep and the student loans should be gone shortly--thank you, state school.

Hey Rich, what would you do with a bunch of $ lying around in an ing account?

benzocaine · Post by **benzocaine** » Tue Jan 31, 2006 10:18 pm

One thingthat strikes me every time I pay the bills is all the junk we have today that our parents didn't:

Internet

Cell phone

Digital cable, with HBO and other movie channels.

Satelite radio

That's somewhere around 225.00 a month that could go to the bank instead. Three of those items could be elimanted without penalty.

Not that the thought ever crossed my mind.

RACastanet · Post by **RACastanet** » Tue Jan 31, 2006 10:38 pm

Ben: I still have an internet connection, but not the other things. It is a huge savings.

Ian: Nothing beats slow and steady when it comes to investments. Buy a blue chip stock you believe in, have the dividends reinvested, and ignore it for 20 years. As you apprach 50, take a look at the investment and you will be pleased.

GE is ok. Nothing spectacular but it is a mutual fund in itself. The PE ratio is reasonable and it is trading in the low end of the last 12 months. The management team has been a Harvard case study on success for the last 100 years. Plus, the dividend yeild is about 3%. It would be hard to go wrong with GE as an investment.

Philip Morris is even better right now but subject to the flaws in our tort system. Great dividend.

Watch Warren Buffet and Berkshire Hathaway. Anything they are involved in is a good bet.

If you understand and like a stock, such as Pepsico, that is a good choice.

Never buy anything you cannot understand. Ask Enron and Worldcom investors.

Beware of the Googles and Yahoos and the like as they are trading in a very high range and can crash tomorrow.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Tue Jan 31, 2006 11:29 pm

Don't forget the healthcare sector. The boomers are getting older, and demanding more and better healthcare. And where the boomers spend money, you have earnings. And where there are earnings...

I've done very well here. But I know the business.

- Bill

dpasquarelli · Post by **dpasquarelli** » Wed Feb 01, 2006 12:37 am

It's never too early to do something just because you want to. MY wife left an advertising career on the rise to become a middle school teacher and she loves it. The pay is not as good but she no longer goes out to eat or drinks all the time which goes with the ad industry and she LOVES HER JOB.

I, on the other hand, don't love mine but about 1 1/2 years ago I started my own painting company and I love the freedom it affords me. I work more and harder than before but I take off to surf when I want to and to train in the daytime. When she gets her Masters I'll probably stop painting but for now it is going well.

The big lesson I learned is to take risks, work hard and reach out and take it, it's all waiting there if you want it bad enough and don't let fear stop you.

f.Channell · Post by **f.Channell** » Wed Feb 01, 2006 2:53 am

People don't save because banks don't pay decent interest anymore.
When I was a teen you could get a CD for 17% interest at any bank.
I had a passbook account where you brought your book in and they put it in a machine which made a "chunka-chunka" noise as it calculated interest.
God I loved that noise!

I couldn't find my kids an account like that anymore.

If you save too much it goes against you when applying for college.
The IRA's I got in my early twenties are going to get taxed when I take it out.
So they have Roth IRA's which aren't going to be taxed when you take it out.

Sure they won't change that law.

They rich get richer because they invest in things like art and rare antiques which appreciate tax free. Also property.
My Gibson Les Paul and Fender Strat have done better than the stock market.

Or you can have the opinion of my older free spirited brother.

I'm not here for a long time-I'm here for a good time.

F.

Oldfist · Post by **Oldfist** » Wed Feb 01, 2006 3:00 am

dpasquarelli wrote: The big lesson I learned is to take risks, work hard and reach out and take it, it's all waiting there if you want it bad enough and don't let fear stop you.

Nice !

I always said to myself that I didn't want to wake up at 50 and say I wasted my life because I didn't try things. My parents split up when I was in grade school and my mom raised three boys by herself. There was a friend of mine's dad who always encouraged me and my friend by saying, "what's the worst thing that can happen if you asked (or tried) to do something that was different or that you want to do?" And the answer is "they might say 'no'."

RACastanet · Post by **RACastanet** » Wed Feb 01, 2006 4:00 am

Don't forget the healthcare sector.

In spite of a high demand I would stay away from this sector as there is too much of a risk of government meddling. Any legislation to reduce costs or make prescription drugs more affordable will hurt the bottom line of these companies. The market forces will be disrupted by this activity.

If you really know and understand this sector go for it, but this area does not fit my buy it and forget it criteria. You would need to keep your eyes on many outside factors that could have a negative effect.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Wed Feb 01, 2006 3:29 pm

Rich wrote:
Bill wrote:
Don't forget the healthcare sector.

In spite of a high demand I would stay away from this sector as there is too much of a risk of government meddling.

You really should watch Randy Cost every morning, Rich. (Business news on Channel 12) Randy says buy what you know.

I started buying in my healthcare company BIG time at $17 a share, during the go-go 1990s. Then there was the market collapse, where every sector followed the Internet and tech sectors. But not so for healthcare. People still get sick. People still need treatment. Boomers are aging and getting sicker. And at least for now, it's just getting better and better for those companies.

Last I checked, "the alternate" healthcare model north of our border just got slammed. The Canadian Supreme Court just ruled that the government system didn't meet the needs of the people, so private systems could exist. Imagine that! So, you think the U.S. government will be meddling here any time soon? Think we'll have a government-run, single payer system? Guess again. As it is, doctors here are one step away from rejecting Medicare and Medicaid patients because they don't get reimbursed enough.

So I started purchasing big time at $17. I just check this morning, and it's selling at $77.

Oh and I forgot to mention - that's the price per share AFTER the split. And it doesn't include the extra $30 per share I got in a lump sum (damnit!!) when the larger company bought my small company. So that's (2*77 + 30) dollars per share, and that ain't chump change.

Fred, has your Les Paul done that well?

The goal should be to put money in SOMETHING. Then leave it the hell alone. The market will go up, and the market will go down. But over the long run, it goes up. And what matters most isn't what goes up or down this year. It's the time value of the money (compounding gains) that makes the rich get richer.

As a friend of my father once said, "It isn't what you earn that matters; it's what you save." As another friend of his once told me, "Always live beneath your means and you'll do well."

- Bill