Have to admit I learned from Mrs Volfie on YouTube ourhalfacrehomestead. Here's one of her videos. She's a fabulous resource for homesteading and cooking.
How do people afford this?
- Thread starter moomoodiddy
- Start date
I will be the odd duck out and say that Dave Ramsey is only kibd of right. Yes, being out of debt is wonderful and the best way to get where you want to go but please think about retirement first! I have done FPU through my church and it is a great program but I would recommend a hybrid system. The money you can make off of compounding interest by investing in mutual funds far out weighs paying off a low interest loan. I have a few low/zero interest loans and will not pay them off because my money will be more effective paying into my mutual fund for retirement than paying off my loans. It is a numbers game and every year you put off investing the leas time your money has to work for you. Use a compound interest calculator to see how damaging it can be to throw 10000 at debt rather than investing it for 20 years. Retirement is sadly the moat neglected aspect of life. Kids receive basically no information about investing and so many others are told 401ks are good for everyone. They're not they were made for a specific group of people and now most who invest in a 401k get screwed because of misleading/misinformed marketing. And any young people reading this (read under 25) start investing every dime you have because it will pay off big time 40 years down the road. If I would have known at 18 what I know now I would probably be done funding my retirement already.
I would agree that a hybrid approach is perfectly sensible, provided one is committed to responsibly managing both debt and savings. However I would strongly recommend AGAINST dispensing investment advice like this.
I DID start saving at the earliest age possible (22, I had to graduate college first)... I did everything "right"... and I lost 45% of my life's savings (and went underwater on my mortgage) in the crash of 2008. I was lucky in that I was nowhere near the retirement age at the time. But what about the people who were just poised to retire and who lost everything?
Mutual funds are a Ponzi scheme, just like most of the entire equity markets. By forcing people to buy into mutual funds (that is what the 401k does BY DESIGN: force people to participate in the markets), that helps obfuscate true equity value and incubates the market bubbles we see. We are seeing the biggest aggregate bubble in financial history right now.
I liquidated all my investments in 2014 and opened up self-directed IRAs and began managing my own investments directly. This is far more work than mutual funds, but far less risky IN MY OPINION.
Obviously a savvy investor can make piles of cash playing the game right now (and they (not me) are doing just that). But it takes smart, active management. I'm not saying anyone should or should not invest in mutual funds. But in good conscience I couldn't recommend categorically that people SHOULD invest in them. These are very dicey financial times.
When I lost that 45% of my savings, you know who actually turned a profit? My financial advisor... the mutual fund management staff.. the market traders... they all got their cut of my money even as markets plummeted. I was the one that had to pay the losses on those investments.
The current global markets are all in a colossal bubble network driven by ever-expanding debt. The market growth we see is unsustainable simply by virtue of how the systems are designed. The question isn't if the markets will crash, but when. Some have been expecting it since 2010. It's impossible to say when or how it will happen. This is my opinion, but if a person digs into it they will find this is a very commonly held position by those who do not have a vested interest in equity market performance.
It is a personal choice whether a person invests in mutual funds or not. BOTH are risky positions. A decision either way should not be entered lightly. All investments carry risk inherently. People need to educate themselves in order to make the best financial decisions for themselves.
@HoopyFrood that sucks that you lost that much. Unfortunately it is a risk but really it doesn't happen that often. If you are diversified enough it can help lessen the blow but not much wasn't effected that year. The problem is that somewhere in the ball park of 50% of the US population doesn't have much in the way of retirement. They think their social security will take care of them or their retirement from a company will be enough and they make no other provisions. My father in law worked the same place since he was 18 until the company shut down its local branch. 34 years with this particular name as the company changed names/owners a few times. Guess what they did? Kept their best longest employees until the end and gave them a crap severance package half of what they gave other employees who they let go earlier. Also since he didn't officially retire but was more layed off he got a fraction of what he would have gotten had he actually chosen to retire a year early. He had no other plan to retire becaue this fortune 500 company was never going to out of business. People need to think about it rather than treating it as an afterthought.
Interesting conversation going on here. I beg to differ that a market crash doesn't happen that often. I'm in my early 60's, and have seen enough crashes in my life time to make me gun shy. Like Hoopy, I lost a lot of money during that crash. And there have been several mini crashes since then. And folks in previous generations have lost investment money as well.
Being debt free gives the freedom to ride out such a crash, or even ride out a lengthy period of unemployment, or illness, without fear of loosing your home or your car.
Agreed, investment towards retirement is much overlooked. And there are times when it is more sensible to invest in retirement than to pay down debt. For example: When tax time comes around: Typically, when we are figuring our taxes, for every $1,000 we invest in an IRA, our tax pay in is decreased by $150.00. That's an immediate 15% interest! Did you know that if you get a refund, you are double taxed on it? If you got a 1K refund in 2017, you have to claim that money as INCOME in 2018! Now, isn't that sweet? Uncle Sam takes your money from you, takes more than he's entitled to, uses it all year, and begrudgingly returns some of it, that he wasn't entitled to take in the first place, only to turn around and tax you the following year for the money that he extorted from you in the first place! Our government hard at work taking care of us little people. The best way to manage tax refunds: Make sure there are no refunds! Better to have to pay in a bit every year than to be double taxed on a refund.
So, in the above situation, we will let a 3.5% interest home improvement loan ride, and spend down our savings to realize the benefit of decreasing our income tax pay in by kicking extra money into an IRA.
Being debt free gives the freedom to ride out such a crash, or even ride out a lengthy period of unemployment, or illness, without fear of loosing your home or your car.
Agreed, investment towards retirement is much overlooked. And there are times when it is more sensible to invest in retirement than to pay down debt. For example: When tax time comes around: Typically, when we are figuring our taxes, for every $1,000 we invest in an IRA, our tax pay in is decreased by $150.00. That's an immediate 15% interest! Did you know that if you get a refund, you are double taxed on it? If you got a 1K refund in 2017, you have to claim that money as INCOME in 2018! Now, isn't that sweet? Uncle Sam takes your money from you, takes more than he's entitled to, uses it all year, and begrudgingly returns some of it, that he wasn't entitled to take in the first place, only to turn around and tax you the following year for the money that he extorted from you in the first place! Our government hard at work taking care of us little people. The best way to manage tax refunds: Make sure there are no refunds! Better to have to pay in a bit every year than to be double taxed on a refund.
So, in the above situation, we will let a 3.5% interest home improvement loan ride, and spend down our savings to realize the benefit of decreasing our income tax pay in by kicking extra money into an IRA.
- Thread starter
- #196
What would y’all recommend me investing in? I work part time where there are no 401 k options and I am a full time college student. My parents pay for my tuition, health insurance and let me live at home but I pay for all my other expenses
- Thread starter
- #197
I currently invest in livestock
Be VERY careful soliciting investment advice - because you'll receive it!
Take everything with a grain of salt. Above all research as much as you can!!
You did ask, though, so I'll just throw the idea out: silver. Not ETFs!! The actual metal. Short term commitment of traders has been showing it's really near a bottom right now. Trading for $16 something USD/oz right now. Average production costs globally are about $15/oz. It's also the only precious metal largely consumed in the manufacturing of goods. On a timeline of decades (20-40 years) *some projections* have it's value approaching that of gold.
PLEASE research thoroughly before making any decision. While *it is my opinion* that precious metals are a great investment right now, they DO have significant drawbacks: physical storage is the most obvious one. There really is no easy, perfect way to store them. Another one is if the markets tank (which many analysts *think* they will) and the dollar weakens enough there is a chance the government can outlaw private ownership of precious metals. It's happened before (https://en.wikipedia.org/wiki/Gold_Reserve_Act) and it can happen again.
Definitely save for the future. Just do so knowing there are no guarantees and there are no perfect solutions. Investing is very tricky business.
I just figured if I was going to lose my savings, I'd rather it be MY fault than be a spectator while it happened to me. I have NO idea if that notion is appealing/makes sense to others... or even wise
Be careful! And good luck!
- Thread starter
- #199
Oh I definitely have come to terms with the fact that social media is all about opinions.Be VERY careful soliciting investment advice - because you'll receive it!
Take everything with a grain of salt. Above all research as much as you can!!
You did ask, though, so I'll just throw the idea out: silver. Not ETFs!! The actual metal. Short term commitment of traders has been showing it's really near a bottom right now. Trading for $16 something USD/oz right now. Average production costs globally are about $15/oz. It's also the only precious metal largely consumed in the manufacturing of goods. On a timeline of decades (20-40 years) *some projections* have it's value approaching that of gold.
PLEASE research thoroughly before making any decision. While *it is my opinion* that precious metals are a great investment right now, they DO have significant drawbacks: physical storage is the most obvious one. There really is no easy, perfect way to store them. Another one is if the markets tank (which many analysts *think* they will) and the dollar weakens enough there is a chance the government can outlaw private ownership of precious metals. It's happened before (https://en.wikipedia.org/wiki/Gold_Reserve_Act) and it can happen again.
Definitely save for the future. Just do so knowing there are no guarantees and there are no perfect solutions. Investing is very tricky business.
I just figured if I was going to lose my savings, I'd rather it be MY fault than be a spectator while it happened to me. I have NO idea if that notion is appealing/makes sense to others... or even wise
Be careful! And good luck!
One consideration: land. To my knowledge it's a finite resource and last time I checked, there was not any more of it being made. If I had a chunk of cash, I'd invest in land/realestate. But would not be willing to go into debt doing it. However, I do not have a chunk of cash, so my opinion is not worth much. A number of folks I know have invested in realestate along the principle of the "cobbler". They now have plenty of rental properties owned free and clear that provide a nice retirement income.
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