Just One Dollar a Day....

originally posted by: rickymouse
I think that the information this article is based off of is a sales pitch, none of our supposedly secure investments went anywhere even after we sold them off. Prudential was supposed to be a good one, that never went anywhere, every downturn wiped out the profits.

Unless you are a professional investor who has a very good grasp on a part of the market, investing in specific companies is almost always a loss. For the unsophisticated investor the way to beat the market is to buy shares in low fee funds that are simply a bunch of shares spread across the market. The best investors in the world cannot beat the market average reliably, and most cannot even match the market average over time. ETF's and Index funds hit the market average every single year. The key to investing for most people is diversification. Invest in several different funds, each of which are invested as mutual funds, ETF's, etc. And then sit on them, you aren't a professional investor, don't try to day trade them or time the market.

originally posted by: r0xor

originally posted by: Edumakated
3) An Exchange Traded Fund (ETF) tracking with the S&P 500: $698,450 after 50 years

Did you know that getting one of those isn't as simple as applying for it?

I don't know what you have to do but they're not offering a gain of $682,000 in interest over 50 years to anyone. You probably need a good credit score and a significant starting deposit.

No. You are completely wrong. You don't "Apply" for an ETF, you simply open an account, just like you open a checking account. This is the reason we need financial education in the USA. Comments just like this.

a reply to: Lumenari

glad you made it , I love success stories

a reply to: Edumakated

The next time you hear someone whining about how they can't save, just call BS. There is no reason anyone should be entering retirement broke.

I half agree with this, the only caveat is that I've seen too many people get wiped out because of medical bills.
People that did the right thing and save and were responsible.


Totally agree with everything else. I read somewhere recently that something like 60% of people have ZERO retirement savings. Yes ZERO. That is pretty scary to think about. You know who will end up paying for those 60%..

originally posted by: Aazadan

originally posted by: Edumakated
Did you know that if you saved just one dollar per day, in 50 years you would almost have $700,000? Think about that.... most people could easily live off $700,000 in the bank at retirement. If at 18 years old, you started putting just $1 dollar a day away, you'd be sitting on almost $700k when you turn 68.

At the recommended 4% drawdown, $700k is $28,000 per year. Furthermore, at a fairly consistent 3.5% rate of inflation, $700k in todays dollars is worth $125,337, which at a 4% drawdown would be worth the same as just over $5000/year today.

That's not an awful return, but you're kidding yourself if you think that's money you could live on. For a fairly modest $70k/year (in todays dollars), which given the cost of insurance and medical care is a real stretch for someone who is older, you need to put away 14 times that, or $14/day which is $5110 per year from 18 to 68. That may not sound like much, but considering the median wage in the US is $30,000 before taxes, or about $24,000 after taxes, and that rent is almost unobtainable for under $1000, and other living expenses come to at least 400/month (food, car, etc), you're talking about someone only having $7000 a year for everything else. Asking for $5110 per year is effectively 5/7's of all available funds.

Asking for 5/7's of the average persons persons disposable income to try and meet retirement goals is not reasonable.

The point was showing it is fairly easy to accumulate savings with small and consistent contributions.

We can debate till cows come home on assumptions and other not picky things but that is not the point.

Vast majority of people do not have 700k in their retirement. PERIOD. That is life changing money for 99 percent if the population.

So yes, putting away 1 dollar a day can make your retirement easier and it isn't that hard.

originally posted by: Edumakated
Imagine if government just put $365.00 a year into an ETF for each person once they start working. Just have it taken out of a check and put into an ETF. Each person had a "lock box" with their account. They'd have the money at retirement and then even be able to pass it on to their kids at death unlike social security.

Think how simple it would be to implement something like this...

Heh, then it would be like Social Security, and they'd find an excuse to raid it for their own use leaving us with the "IOU" in no time. You know it was well as I. Government is the entity least likely to teach any of us about fiscal responsibility.

a reply to: Edumakated

If you put $1 away every day for 50 years, you won't have $700
,000, you will have the $18,000 mentioned above.

if you put it in an ETF, you MIGHT get $700,000 or you might end up with nothing, or most likely a much lower amount than £700,000.

Not to put people off from either saving or investing, but it is certainly NOT as simple as you make out and people need to understand the risks if they are to invest.

a reply to: Edumakated

If you put $1 away every day for 50 years, you won't have $700
,000, you will have the $18,000 mentioned above.

if you put it in an ETF, you MIGHT get $700,000 or you might end up with nothing, or most likely a much lower amount than £700,000.

Not to put people off from either saving or investing, but it is certainly NOT as simple as you make out and people need to understand the risks if they are to invest.

a reply to: Edumakated

If you put $1 away every day for 50 years, you won't have $700
,000, you will have the $18,000 mentioned above.

if you put it in an ETF, you MIGHT get $700,000 or you might end up with nothing, or most likely a much lower amount than £700,000.

Not to put people off from either saving or investing, but it is certainly NOT as simple as you make out and people need to understand the risks if they are to invest.

a reply to: Edumakated

If you put $1 away every day for 50 years, you won't have $700
,000, you will have the $18,000 mentioned above.

if you put it in an ETF, you MIGHT get $700,000 or you might end up with nothing, or most likely a much lower amount than £700,000.

Not to put people off from either saving or investing, but it is certainly NOT as simple as you make out and people need to understand the risks if they are to invest.

originally posted by: Aazadan

originally posted by: rickymouse
I think that the information this article is based off of is a sales pitch, none of our supposedly secure investments went anywhere even after we sold them off. Prudential was supposed to be a good one, that never went anywhere, every downturn wiped out the profits.

Unless you are a professional investor who has a very good grasp on a part of the market, investing in specific companies is almost always a loss. For the unsophisticated investor the way to beat the market is to buy shares in low fee funds that are simply a bunch of shares spread across the market. The best investors in the world cannot beat the market average reliably, and most cannot even match the market average over time. ETF's and Index funds hit the market average every single year. The key to investing for most people is diversification. Invest in several different funds, each of which are invested as mutual funds, ETF's, etc. And then sit on them, you aren't a professional investor, don't try to day trade them or time the market.

Every money market account we had, which were rated high, produced little. Our AT&T stocks and Bell stocks did good. I spent a lot of time researching companies back in the eighties and nineties. I am a little OCD with everything. But, as I said, the front end and rear end fees along with the fees they charged for the maintence and stock flips within the mutual funds ate up most of the profits.

I even knew two people who invested quite a bit and they told me to stay out of those funds that were charging for trades because they got paid every time they flipped a stock. I read the perspectives that came out, a catalog every year. The mutual funds made way more than we did on our money, I actually got out the calculator and figured it out. Most of those funds I believe are scams where their management makes more than the investor. Look at the people getting profits off of those funds, the guy I know managed about two million bucks when I used to know him and took home a hundred grand a year average for his participation, Now remember, he also had some office workers paid by the fund and he had bosses and his bosses had bosses and they made way more money than he did. Their system makes a real lot of money without any risk, even EF Hutton went bankrupt, many investors lost lots of money and they actually did rip some people off. Two grand of our stock sale disappeared right before their bankruptcy, nobody seemed to know where the money went. The stock had a put and sell on it, sure it sold, but then the money disappeared, the stock went down the tubes after that, so their answer was to replace the stock, they sold two thousand shares at two fifty a share, then bought us the same amount of shares at fifty cents to replace it, but the thing is, we had to pay taxes on the large amount and the taxes were like five hundred bucks and we got nothing, the company then went bankrupt, so we lost everything, plus the five hundred bucks taxes which we never should have had to pay.

I have no faith or trust in that gambling organization they call the stock market. We have been ripped off too much, I would never get into a money market account anymore.

originally posted by: Dem0nc1eaner
a reply to: Edumakated

If you put $1 away every day for 50 years, you won't have $700
,000, you will have the $18,000 mentioned above.

if you put it in an ETF, you MIGHT get $700,000 or you might end up with nothing, or most likely a much lower amount than £700,000.

Not to put people off from either saving or investing, but it is certainly NOT as simple as you make out and people need to understand the risks if they are to invest.

It is that simple. Again, this is why financial literacy is so important.

If you take the historical returns, you will get to the $700k. Yes, markets go down, but they go up as well. There is a method called dollar cost averaging. You keep putting money in the markets whether the market is up or down. It averages itself out and returns far and above more than what any "risk free" investment would ever yield.

Yeah, that is why I said a "lock box". It doesn't have to be complex.

It is sad, but it would be that simple, but government would never go for it. Democrats wouldn't support it because it would mean people would then become self-sufficient.

a reply to: Edumakated

It has nothing to do with income inequality, wealth redistribution, etc. It is lack of discipline and ignorance

Put up or shut up? How are you going to save a Dollar every day when you need it to pay your costs of living?

The data seems to disagree with you and I don't like your condescending tone. You're way too undisciplined for a less ignorant OP, eh?

originally posted by: PublicOpinion
a reply to: Edumakated

It has nothing to do with income inequality, wealth redistribution, etc. It is lack of discipline and ignorance

Put up or shut up? How are you going to save a Dollar every day when you need it to pay your costs of living?

The data seems to disagree with you and I don't like your condescending tone. You're way too undisciplined for a less ignorant OP, eh?

Sometimes the truth is not pleasant.

IF you smoke, you can afford to save a dollar a day. If you buy one pair of $200 tennis shoes you can afford to save one dollar a day. If you have a cell phone you can afford one dollar a day.

Again, lack of discipline is the issue... people don't want to make saving for their future a priority.

Sorry, cupcake.

a reply to: Edumakated

Again, lack of discipline is the issue... people don't want to make saving for their future a priority.

Every struggling or "poor" person I have ever known in my life had room to make improvements financially, sometimes significantly, but choose not to do it.

I knew a person that was getting laid off (fully aware) and thought it was still a good idea to do a very expensive landscaping project.
It was a terrible idea and took much longer to find employment than they realized!

a reply to: Edumakated

Cupcake? If you wanna make this about discipline and ignorance, I wanna see some proof.

Again, lack of discipline is the issue... people don't want to make saving for their future a priority.

And repetition doesn't render your highly subjective epistemology very meaningful, either. Post this crap in the mud-pit next time, how's that?
Are you afraid of the responses or just undisciplined with your own replies? Which one is it?

Sadly the system is rigged against the average person being able to save for their own retirement. The stock market is rigged and the big investors get lots of tips on what's coming (like the CFO of MGM selling off his stock a few months before the Las vegas massacre). Between inflation and depressed wages the wealth has trickled (ok - gushed) up to the top 1%.

My life philosophy has been enjoy today for there may be no tomorrow.
So far it's worked out pretty well.
Thank God I won't live to be 100 anyway.
No amount of money could make decrepit old age worth living.

originally posted by: Edumakated
Vast majority of people do not have 700k in their retirement. PERIOD. That is life changing money for 99 percent if the population.


So yes, putting away 1 dollar a day can make your retirement easier and it isn't that hard.

Correct, they do not. But if they're young now and putting away $1/day, $700k is not going to be life changing money by the time they're ready to retire.

Would it make life easier when it's time to retire? Sure, no question. But for most people it also makes life a hell of a lot harder right now. The median household income in the US is still what, $52k? Assuming 2 people, that's $2/day. Or the median individual income is $30k for $1/day.

That's about $39k and $27k after taxes. Subtract $1500/$1200 for rent/utilities, $300/$200 for health insurance, $400/$300 for food, and $450/$300 for transportation per month and you're left with $7200/$3000. So that dollar per person per day represents 10.1%/12.2% of disposable income.

Here's where we hit the snag though. The recommended retirement savings is 15% of income. So that's $7800/$4500 per year. That's more than a persons entire disposable income. And as such, it means it can't be done. Sure, you can compromise and say, a goal of $1/day is better than nothing, but that still only gets you the equivalent of $5000/year today.

At median income levels in the US in most areas, it is simply not possible to put adequate savings towards retirement. Boomers seem to have enough for the most part, but gen x and later do not.

originally posted by: rickymouse
I even knew two people who invested quite a bit and they told me to stay out of those funds that were charging for trades because they got paid every time they flipped a stock. I read the perspectives that came out, a catalog every year. The mutual funds made way more than we did on our money, I actually got out the calculator and figured it out. Most of those funds I believe are scams where their management makes more than the investor.

Actively traded funds do worse on average, and the fees take even more money. Fees are a very important part of it, because your fees aren't just money you're losing now, but it's money that doesn't sit in your account and compound which adds up significantly over multiple decades. For the average person, Vanguard is one of your best options.