Gen Y Entitlement (Page 3)

Originally posted by Left Brain

Originally posted by JoshR

Originally posted by Left Brain

Originally posted by JoshR

Originally posted by Left BrainJosh....no offense, but you tend to look at the negative side of everything.  I didn't move a single penny when the market crashed and everyone I knew bailed out.  All it meant to me was that I was buying CHEAP by staying in.  The market isn't run by guys with negative attitudes.....it's run by people who want to make money.  You can't sit in your seat and make predicitons about what the Fed is doing, etc......you just don't have access to that information.  What you have to do is look at long term trends.  Here, without getting into exact numbers, I have an account I opened in 1986.  I have put 225,000 into it...... it's worth 610,000 today.  I'm happy with that return, and I'm happy I didn't try to use themoney I put into that account to pay off my house, or student loans, or any other debt.....because the debt got paid off anyway, and I have that account waiting on me that will bridge me over to my pension account.

Since you like to make predicitons.....I'll make one too..... go ahead and sit on the sideline and wring your hands....you're about to miss out on one of the biggest economic recoveries in history.  It's what giant economies do....they go up and down.  The size of the recoveries tend to mirror the size of the downturns.  There is alot to be happy about with the housing numbers, oil production, natural gas production, and general growth of the economy.  You can say the Fed is propping up the markets all you want......the Fed doesn't make the markets run.....the guys making the money do.

Just because I'm a numbers guy, I ran the math and according to this http://www.pine-grove.com/online-calculators/roi-calculator.htmyou made 4% annually. That's before inflation is taken into account too so if you were to record your real money growth (using this calculator http://www.westegg.com/inflation/) it would go down substantially. Of course it's your money and if you're hapy with it then life is good

Eh....not entirely accurate.  There were many years I put NOTHING into that account and other years I dumped money into them regularly.  For the record, a 4-5% annual return is more than fine with me.  When I run the numbers for our retirement income I use 2.5% as where I'd like to be as we draw our accounts down.  You are somehow assuming I put all 225,000 into that account at one time.  I have made quite a bit more than 4% on the money I've put in.  In the beginning I could barely afford to put much in.

 

Durrr. I just read it as a math problem. Invest 225k for 26 years end up with 610k and what's the ROI?

I know you did.....I can do the math as well.   I'm much closer to 9 - 10% over the life of that account.  For what it's worth, I had no idea you folks were paying that much interest in a student loan.....my wife's consolidated loan is just over 2%.  Still, as has been stated by others here.......I'd be really careful about payingf off debt vs. investing.....it's not just a simple math problem.

The scary part though is if I lose my job, I still owe someone $350 a month for my student loan payments. Or if I graduated and was unable to find a job, a real scenario for many people, after 6 months I am required to start paying back those loans.

Originally posted by dmiller5

Originally posted by Left Brain

Originally posted by JoshR

Originally posted by Left Brain

Originally posted by JoshR

Originally posted by Left BrainJosh....no offense, but you tend to look at the negative side of everything.  I didn't move a single penny when the market crashed and everyone I knew bailed out.  All it meant to me was that I was buying CHEAP by staying in.  The market isn't run by guys with negative attitudes.....it's run by people who want to make money.  You can't sit in your seat and make predicitons about what the Fed is doing, etc......you just don't have access to that information.  What you have to do is look at long term trends.  Here, without getting into exact numbers, I have an account I opened in 1986.  I have put 225,000 into it...... it's worth 610,000 today.  I'm happy with that return, and I'm happy I didn't try to use themoney I put into that account to pay off my house, or student loans, or any other debt.....because the debt got paid off anyway, and I have that account waiting on me that will bridge me over to my pension account.

Since you like to make predicitons.....I'll make one too..... go ahead and sit on the sideline and wring your hands....you're about to miss out on one of the biggest economic recoveries in history.  It's what giant economies do....they go up and down.  The size of the recoveries tend to mirror the size of the downturns.  There is alot to be happy about with the housing numbers, oil production, natural gas production, and general growth of the economy.  You can say the Fed is propping up the markets all you want......the Fed doesn't make the markets run.....the guys making the money do.

Just because I'm a numbers guy, I ran the math and according to this http://www.pine-grove.com/online-calculators/roi-calculator.htmyou made 4% annually. That's before inflation is taken into account too so if you were to record your real money growth (using this calculator http://www.westegg.com/inflation/) it would go down substantially. Of course it's your money and if you're hapy with it then life is good

Eh....not entirely accurate.  There were many years I put NOTHING into that account and other years I dumped money into them regularly.  For the record, a 4-5% annual return is more than fine with me.  When I run the numbers for our retirement income I use 2.5% as where I'd like to be as we draw our accounts down.  You are somehow assuming I put all 225,000 into that account at one time.  I have made quite a bit more than 4% on the money I've put in.  In the beginning I could barely afford to put much in.

 

Durrr. I just read it as a math problem. Invest 225k for 26 years end up with 610k and what's the ROI?

I know you did.....I can do the math as well.   I'm much closer to 9 - 10% over the life of that account.  For what it's worth, I had no idea you folks were paying that much interest in a student loan.....my wife's consolidated loan is just over 2%.  Still, as has been stated by others here.......I'd be really careful about payingf off debt vs. investing.....it's not just a simple math problem.

The scary part though is if I lose my job, I still owe someone $350 a month for my student loan payments. Or if I graduated and was unable to find a job, a real scenario for many people, after 6 months I am required to start paying back those loans.

Now you are starting to sound "entitled".   Everyone is in the same boat.....we could all lose our jobs, nothing is promised.  if you do, then you find another job, or two more jobs.  There was a time when I was a younger man that I worked 2 part time jobs in order to be able to get ahead a bit. 

My grandfather once gave me great advice.....he said, "stay in all the debt you can stand when you are young......buy as much as you can using someone else's money, and save with your own money."  I realize it's a bit off the subject but I know people who buy new cars using money they have saved up.....when you can have one for ZERO% interest... all in the name of "not going into debt" or "not having a monthly payment".  I can't think of anything dumber than that.

I can't think of anything dumber than the bolded, myself. How is this great advice?!

Because if you keep reading you'll see that you SAVE your money.  You probably don't get it....you're too young and you don't own much. 

Assume all you want about me, LB You have no idea.

Edit: and here we go again with the "you don't get it" response if someone disagrees. Classic!

Sure I do....... people talk.  

Gen Y, and more debt isn't better

It solely depends if you're making the debt work for you by borrowing money to buy something that increases in value.   Such as property or blue chip stocks.

So if I had $10k to spend for example on a car and there was an interest free option i'd take it but invest the $10k in stocks or something else.

Make the dollar work for you.

Of course in reality what happens is i blow the money on a new bike.

Good points above. I can agree that in certain, limited circumstances it makes more sense to take out a zero or low interest loan and put your money to better use. That's just basic math. Maybe that's what LB was trying to say but it got jumbled up in the context.

There was a thread awhile back where someone's local bike shop was having a mega sale - this week only - on his dream bike. Would have saved him thousands. He could have put it on his credit card and paid it off before any interest accrued (waiting for payday or something). But he chose to pass up the deal because he didn't want to put anything on his credit card that he could not afford that day, out of principal/good habits. That did not compute to me.

(snerk)

It kind of depends.  If you're going out and running up credit cards at 20% interest then that is a very bad thing.  However, debt for a home is a good thing, IMHO.  You can have a lot of "flexibility" with very low risk by renting your entire life, but you'll never get any value for that money.  However, buying a home allows you to grow equity (hopefully) and ultimately own the home outright with the money you would have been throwing away for rent.

Is there more risk?  yes, but there's also more reward.  So if you are smart about it and don't buy a $3000/mo. house on a $5000/mo. salary it reduces that risk significantly.

**edit**

Oh, and I'm 39.  Not sure what "generation description" I fall into so I'll just call it "Generation Awesome"

It all depends on what the alternative is.   If you borrow at a cheap rate, and then save the equivalent amount at a higher rate, then yes you're better off.  Both the purple text and the green text need to hold true.  

All too often, people aren't disciplined about the saving part.   

One other factor to consider -- paying down debt is risk-free.  If you have a 6.5% student loan rate, paying that off is a guaranteed 6.5% return on investment.   Investing in the stock market could have a higher return, but it comes with risk. How much risk?  Depends on what you buy, and how long you hold it.   How much of an extra return should you expect for taking on this risk?  Now you're getting into the world of high finance.  

I'm a baby boomer......and I'll buy with someone else's money to use my own to invest all day long if the math works out right.

That same Grandpa who gave me Lisa's "dumb" advice was a real estate salesman at a very large recreational lake in the Midwest.  He would call me when he had a "can't miss" property for sale and I would drive down there on closing day and sign for the loan.  he'd put the property up for sale the same day.  When he had a buyer that I could make a couple grand from he'd sell it and I'd drive down and sign the papers.  That was in the 80's....if he hadn't of died I wouldn't be working today.  I never "paid" for ay of it and I didn't have hardly a dime of my own.....but I had a secure job and good credit.

Buy a new car with cash when I can get a 0% loan and invest my cash............HUH?????

Like I said early on in another post......you gen Y'ers sure like to make life complicated....maybe you've been bombarded with so much information that it all just scares you, I don't know.  It's easy stuff.  It's almost grade school math.

if your grandpa sold stock instead of houses he would be a criminal ;-)

Sure, but he didn't sell stock, so he wasn't.  Being a criminal requires breaking a law.....it's kind of the deal.

This is definitely the crux of the issue with that theory.

No...you don't actually HAVE to save the equivalent amount.....that's silly.  If I buy a new truck for $35,000 at 0% interest I don't have to save $35,000 to make it work for me.  In fact, I can save NOTHING and just the fact that I didn't use my own money that was already/still is gaining interest makes it a win for me.  Like I said......you all sure like to complicate things. LOL

No one said you HAVE to save the equivalent amount. But that is what a lot of folks use to justify going further into debt, and fail to do what they set out to (save/invest that money) and just end up further in the hole. If you don't think that is a very real scenario, then well --- you just don't get it.

You're right.....I don't understand not using my own money to get something I want. ~trying to keep from laughing~

Let me say this  again....slowly......you.....don't.....have......to.....save.......a.....PENNY.....to.....make.......it.....work.....for.....you.  You just don't use the money you have that is already making you more money.  You bolded JUSTIFY like that's really important.  It's not for me. 

How about this one.....do I need to justify this or does this just take common sense?  I charge EVERYTHING I buy/spend every month on a cradit card that ends up giving me free nights at hotels....something I need quite a bit these days due to triathlon travel fo rmy kids.  Some months I go nearly $3000.00 in debt......it's never less tham $1500.00 or so.  I pay it off every month and it costs me nothing.  Of course, I can look at it like alot of people want to and say....."oh god, what if I lose my job?"  Well, hell, what if I get hit by a truck, or the sun quits shining, or about a million other scenarios..... I have no interest in living that way....never have.  I'm more than happy to use someone else's money so that my money keeps working.  Or, in the case of the credit card, I'm using someone else's money to save money that I don't even have to have!!! LMAO

YOU DON'T HAVE TO SAVE ANYTHING!!!!!!!

^^^ He doesn't get it.

LMAO  Trust me, I get the joke.