Posted by burnsy483 on 6/13/2014 2:46:00 PM (view original):

Posted by MikeT23 on 6/13/2014 2:40:00 PM (view original):

Posted by burnsy483 on 6/13/2014 2:39:00 PM (view original):

Posted by moy23 on 6/13/2014 2:08:00 PM (view original):

Posted by bad_luck on 6/13/2014 1:51:00 PM (view original):

Posted by moy23 on 6/13/2014 1:41:00 PM (view original):

Posted by burnsy483 on 6/13/2014 12:09:00 PM (view original):
OK.  I can understand the idea of a dollar more on $40K as a 23 year old single guy in Kentucky, paying $650 a month in rent, partying it up, may not have as much value as later in life, when he makes $80K, but is married with a mortgage and saving money for his children's college tuition.  I understand that.  So let's say, for argument's sake, that the average guy who makes $40K has the same value on his next dollar than the average guy who makes $80K, or $150K, or $300K.  I don't agree with it, but I'll concede that for the sake of argument.

Now that said, someone who makes $25K is likely living paycheck-to-paycheck regardless of where he lives.  He values his next dollar more than income levels above him.  He needs to survive, he needs shelter, food, clothing.  

Someone who makes $1M is likely saving money, living comfortably, money probably isn't an issue for him.  If he's not, he's the exception rather than the rule.

Can you concede that the person making $1M values his next dollar less than the person making $25K? The lower class guy is concerned about paying rent, getting food.  The guy making a million will likely be going on a vacation within the next couple years.  One person needs most of his salary, another would likely be just as happy as he is now with a cut in his paycheck.

I think you are being too shortsighted....

The value of the LAST $ is that it can and should be used for retirement (or put away for future expenses like college educations which a high earner gets no subsidies or grant money for)

No one is saying that the money has no value.

Yes.... But you are excluding the time value of money when you say the last dollar has less value than the first.

I can get a loan for a home, a car, an education.... But have you ever heard of a retirement loan? Stocking away excess money now is so important for retirement... And the sooner a person can start the better.

I could argue the last $ has more value than the first. That last dollar will be worth so much more in time with compounded interest while my new iPhone will be obsolete in a couple years and those smokes i bought will be gone in a day.

I'm sorry, obviously I don't know your financial situation, but wouldn't you starve without income?

Do you think there is anyone living in the US who has no income?   Or have they all starved?

Sure.  Should I assume something about moy based on the fact that others have survived without income? I feel like that would be stupid, no?

If you feel you wouldn't starve, would you be able to live where you're living now?  I'm confused how you think the dollar you earned in the last x seconds you worked is somehow more valuable than the first dollar.

Hopefully this helps unconfuse you....

If I'm spending my first $ now its worth exactly $1 and it will never be worth more than $1. If I'm saving my last $ it and it generates 5% in interest during one year its worth $1.05 a year from now....

So my 1st dollar was worth $1.00 when I spent it and if i spend my last dollar 1 year from now its worth $1.05.

Are you suggesting somehow $1.00 is worth more than $1.05? Time value of money.

I'm not sure you're incorporating inflation.  

Posted by greeny9 on 6/13/2014 3:23:00 PM (view original):

Posted by MikeT23 on 6/13/2014 12:31:00 PM (view original):
I know what you're trying to prove.   Nonetheless, circumstances dictate everything.   Remember when I mentioned multi-million dollar home being foreclosed in CA?  Hell, I'll give you something closer to home.

Remember Lenny Dykstra?    Look up his story.

Mike's logic, oh here is a couple exceptions, they prove the rule! I'm sorry mike, exceptions never have nor ever will prove the rule. These guys are making perfect logic, but you can never ever admit that. You might be the most stubborn guy on the Internet. And that is saying something.

Did you ever point out the brilliant new stuff in your long-winded post I refused to read?   No?   I wonder why.

Moy - 

You didn't answer the question.  I understand how investing money is a good thing, but if someone can't save money because they're scratching for every dollar, the last dollar you're talking about that you're saving for retirement isn't really applicable.  Living right now comes before living later.  

Posted by moy23 on 6/13/2014 4:04:00 PM (view original):

Posted by bad_luck on 6/13/2014 2:18:00 PM (view original):

Posted by moy23 on 6/13/2014 2:08:00 PM (view original):

Posted by bad_luck on 6/13/2014 1:51:00 PM (view original):

Posted by moy23 on 6/13/2014 1:41:00 PM (view original):

Posted by burnsy483 on 6/13/2014 12:09:00 PM (view original):
OK.  I can understand the idea of a dollar more on $40K as a 23 year old single guy in Kentucky, paying $650 a month in rent, partying it up, may not have as much value as later in life, when he makes $80K, but is married with a mortgage and saving money for his children's college tuition.  I understand that.  So let's say, for argument's sake, that the average guy who makes $40K has the same value on his next dollar than the average guy who makes $80K, or $150K, or $300K.  I don't agree with it, but I'll concede that for the sake of argument.

Now that said, someone who makes $25K is likely living paycheck-to-paycheck regardless of where he lives.  He values his next dollar more than income levels above him.  He needs to survive, he needs shelter, food, clothing.  

Someone who makes $1M is likely saving money, living comfortably, money probably isn't an issue for him.  If he's not, he's the exception rather than the rule.

Can you concede that the person making $1M values his next dollar less than the person making $25K? The lower class guy is concerned about paying rent, getting food.  The guy making a million will likely be going on a vacation within the next couple years.  One person needs most of his salary, another would likely be just as happy as he is now with a cut in his paycheck.

I think you are being too shortsighted....

The value of the LAST $ is that it can and should be used for retirement (or put away for future expenses like college educations which a high earner gets no subsidies or grant money for)

No one is saying that the money has no value.

Yes.... But you are excluding the time value of money when you say the last dollar has less value than the first.

I can get a loan for a home, a car, an education.... But have you ever heard of a retirement loan? Stocking away excess money now is so important for retirement... And the sooner a person can start the better.

I could argue the last $ has more value than the first. That last dollar will be worth so much more in time with compounded interest while my new iPhone will be obsolete in a couple years and those smokes i bought will be gone in a day.

Time value has nothing to do with it. I'm saying that you can only drink so much orange juice before you no longer want orange juice and you're saying, "yeah, but oranges grow on trees."

Here is the curve, the x axis is money/shoes/cars/retirement account balances. The y axis is the utility of x:

No...

Your saying "I'll decide when you've had enough orange juice to drink" when I'm saying "I'm going to need some oj for tomorrow so stop taking it from me".

You are only thinking about now and neglecting the future value of money. You don't see the importance of saving. Your curve would be linear if you did.

Ok. Let's try this.

You're saving for retirement. If tomorrow you find out that the balance of your retirement account grew to $100 million, would you continue to put away the same amount every month or would you stop saving?

Posted by MikeT23 on 6/13/2014 4:46:00 PM (view original):

Posted by greeny9 on 6/13/2014 3:23:00 PM (view original):

Posted by MikeT23 on 6/13/2014 12:31:00 PM (view original):
I know what you're trying to prove.   Nonetheless, circumstances dictate everything.   Remember when I mentioned multi-million dollar home being foreclosed in CA?  Hell, I'll give you something closer to home.

Remember Lenny Dykstra?    Look up his story.

Mike's logic, oh here is a couple exceptions, they prove the rule! I'm sorry mike, exceptions never have nor ever will prove the rule. These guys are making perfect logic, but you can never ever admit that. You might be the most stubborn guy on the Internet. And that is saying something.

Did you ever point out the brilliant new stuff in your long-winded post I refused to read?   No?   I wonder why.

Actually I've read just about the whole topic I don't remember anybody bringing up a point about the economy suffering if poor people are taxed equally to rich people. I could be wrong but I don't think so. And im sure you never addressed that statement.

Yeah, you're wrong.  It's been mentioned several times. 

Posted by burnsy483 on 6/13/2014 5:05:00 PM (view original):
Moy - 

You didn't answer the question.  I understand how investing money is a good thing, but if someone can't save money because they're scratching for every dollar, the last dollar you're talking about that you're saving for retirement isn't really applicable.  Living right now comes before living later.  

you'll never understand the mindset of a saver. its obvious thats not you.

savers could have $10,000 in the bank and still feel like they are broke. The problem is that spenders think 'living right now' means they need an iphone, and cool clothes, and an xbox.... and 28% think they need smokes despite their financial situation. Suzie orman would say - be honest with your finances.. if you can't afford a vacation then DON'T GO ON ONE. you are not entitled to vacations just because you are american.

Posted by MikeT23 on 6/13/2014 6:02:00 PM (view original):
Yeah, you're wrong.  It's been mentioned several times. 

And Ive never seen you dispute it.  Still havent.  do you believe fairness should trump the economy going far far south?

No answer to the retirement account question, moy?

Posted by bad_luck on 6/14/2014 8:42:00 PM (view original):
No answer to the retirement account question, moy?

when living right now comes before living later you are already doomed to be poor.

from the CDC data i provided earlier, 28% of poor people are living right now.. and buying smokes. how many more drink? this is a wreckless use of money and they will never get out of poverty. so yeah - i would rather live for later than live for right now. that means sacrificing and that means planning. live in **** govt housing.... use your welfare $ wisely... get a ******* job (no one will hand it to you) even if its minimum wage... and work yourself upwards in that company. along the way its best to educate yourself in any way possible. the internet is free ya know.

i understand its difficult.... the first step is to stop believing in hope and change... and quit playing the lottery (more hope and change)... devise a real plan and work hard at it. Thats how success happens.

or to this retirement question....

____________________________________________________
"Ok. Let's try this.

You're saving for retirement. If tomorrow you find out that the balance of your retirement account grew to $100 million, would you continue to put away the same amount every month or would you stop saving?"
____________________________________________________
Yes.... I'd continue to put the same amount if not more away. Do you think CEO's don't utilize 401k's just because they make millions every year?

I am currently contributing 10% of my income to my 401k and plan to get to 15% at some point and never again drop it back down. My thoughts are once its out of the paycheck I learn to live without it. I would love to drop the contribution down to 3% but I've seen what retiring on soc sec and medicare looks like and I'll be damned if thats me. As a side - I read an article that compared 3% 401k contributions to going to the gym for 6 minutes a day... pretty much pointless.

Below sums up my thoughts on welfare to a Tee. No matter how much you take from the rich and give to the poor the poor will still be poor. They need financial education... not $.

Good article.
http://spectator.org/articles/55706/america-welfare

"It’s important not to focus solely on money. If the programs worked the amount being spent might not seem so excessive. However, observed Tanner, last year the nearly $1 trillion spent on welfare amounted “to $20,610 for every poor person in America, or $61,830 per poor family of three.” With that kind of spending, no one should still be poor.

Yet when testifying before Congress in 2011, Patricia Dalton of the General Accountability Office refused to “hazard a guess” as to what percentage of federal welfare programs achieved their objectives. She admitted that it “would be good to have a number of how many programs there are, what exactly are we spending, and what are we getting for that money.” Yes, that would be good"

Posted by moy23 on 6/14/2014 9:27:00 PM (view original):
or to this retirement question....

____________________________________________________
"Ok. Let's try this.

You're saving for retirement. If tomorrow you find out that the balance of your retirement account grew to $100 million, would you continue to put away the same amount every month or would you stop saving?"
____________________________________________________
Yes.... I'd continue to put the same amount if not more away. Do you think CEO's don't utilize 401k's just because they make millions every year?

I am currently contributing 10% of my income to my 401k and plan to get to 15% at some point and never again drop it back down. My thoughts are once its out of the paycheck I learn to live without it. I would love to drop the contribution down to 3% but I've seen what retiring on soc sec and medicare looks like and I'll be damned if thats me. As a side - I read an article that compared 3% 401k contributions to going to the gym for 6 minutes a day... pretty much pointless.

Bullshit. If you had $100 million in a retirement account that you couldn't touch before 65, there's no way you'd continue adding $10k a year to it. Talk about pointless. That money would be more valuable to you now.

The marginal utility of adding $10k a year to an account that contained $100 million would essentially be zero.

Don't be ridiculous.

Posted by bad_luck on 6/14/2014 11:27:00 PM (view original):

Posted by moy23 on 6/14/2014 9:27:00 PM (view original):
or to this retirement question....

____________________________________________________
"Ok. Let's try this.

You're saving for retirement. If tomorrow you find out that the balance of your retirement account grew to $100 million, would you continue to put away the same amount every month or would you stop saving?"
____________________________________________________
Yes.... I'd continue to put the same amount if not more away. Do you think CEO's don't utilize 401k's just because they make millions every year?

I am currently contributing 10% of my income to my 401k and plan to get to 15% at some point and never again drop it back down. My thoughts are once its out of the paycheck I learn to live without it. I would love to drop the contribution down to 3% but I've seen what retiring on soc sec and medicare looks like and I'll be damned if thats me. As a side - I read an article that compared 3% 401k contributions to going to the gym for 6 minutes a day... pretty much pointless.

Bullshit. If you had $100 million in a retirement account that you couldn't touch before 65, there's no way you'd continue adding $10k a year to it. Talk about pointless. That money would be more valuable to you now.

The marginal utility of adding $10k a year to an account that contained $100 million would essentially be zero.

Don't be ridiculous.

You just don't like the answer.

First... This isn't sinking in..... Most wealthy people value SAVING more than spending. For example if you tax them more they'll reduce their spending because FIRST AND FOREMOST to them is putting money away. I personally believe you can never save enough money because eventually something will inevitably happen where you'll need it. So if I'm telling you my TOP PRIORITY is saving and I VALUE that more than anything... how can you tell me I would forego saving money to spend it now? Spending money now is not my top priority, nor is 59 1/2 a barrier. I dont need fancy cars and all the latest fashions. I know you don't value saving but you need to wrap your head around this point because others do.


Second... that's money I can either use on my own retirement or pass to my children and eventually grandchildren to benefit my family's future (which I also value). I'm assuming this retirement account is offshore because that's the only way an IRA gets to $100 million... So don't discount the tax and leverage benefits I would be enjoying.


Yes.... I'm still contributing.