Poor conservatives, I don't get it. Righties please explain.

[Torie]

That assumes that there is extra money to invest. Anyway,  I don't agree with you on this one, jmfcst.  This is not the right forum, nor the right place, to get into all the details, but this is one arena where I think I really know what I am talking about, FWIW. Most financial experts (I mean the real ones, not the ones that hawk stuff) in any event would not agree with you.

Having said that, I went the real estate route myself as a young man, because the tax laws were different then. Buying primarily bonds with my retirement plan would have been a huge mistake, absent the real estate. 

[Wonkish1]

I actually am in finance and I would strongly advise someone (especially young) to not place all of their income in bonds.  Especially today, but in general as well.

You can easily take losses in bond funds. The fact that we have had a 30 year bull run in fixed income gives some people the allusion that it is safer than it actually is plus there is inflation concern.

I'm also not in the camp of people that believe you should leverage your portfolio when your young. I'm aware of those that say that, but they also are way underestimating what volatility can do to a leveraged portfolio. I do recommend arbing the margin interest rate if the opportunity presents itself though, but that is a completely different story than leveraging into stocks.

[Swing low, sweet chariot. Comin' for to carry me home.]

i was heavily into the stock market until 2000, now I only jump in during recessions and get out after the recovery.

But, stock market aside, most Americans do not appreciate the power of savings (spending less than you earn), and it is reflected in our politics.  Just look at the dumb comments in thread equating living within your means as self punishment.  In fact, they would probably view an type of discipline/savings/work as punishing yourself.

[King]

People don't appreciate the power of savings in this country because the interest rates have become a joke.

I have a ton of treasury bonds from the 90s back when that made sense.

Bush could have done the nation some serious good channeling post-911 patriotism into a war bond sell.

[Link]

Just look at the dumb comments in thread equating living within your means as self punishment. 

Naw.  I just think the idea of not taking government assistance when you are temporarily down on your luck because you are afraid of turning into a degenerate addict is pretty dumb.  Self control... look into it.

[Link]

most Americans do not appreciate the power of savings (spending less than you earn)

Yes and that's why when someone suggests we ought to change our system of taxation and welfare and base it on the premise that most single moms are going to be retiring with the equivalent of $300,000 US (2011 value) in their retirement accounts I look at them like they are crazy.

[Torie]

most Americans do not appreciate the power of savings (spending less than you earn)

Yes and that's why when someone suggests we ought to change our system of taxation and welfare and base it on the premise that most single moms are going to be retiring with the equivalent of $300,000 US (2011 value) in their retirement accounts I look at them like they are crazy.

Yes, it's ludicrous. Just look at the net worth of folks in general. It is pathetically small. Exclusive of housing equity, and their social security expectancy (which is a big number, maybe around 300K in present value terms, for a person getting the max, and starting to take SS at 65), maybe 10% of the population upon retirement has a net worth of 300K or more.

[opebo]

People don't appreciate the power of savings in this country because the interest rates have become a joke.

No, they just can't save because their incomes are too low (and for most of them falling).

[Swing low, sweet chariot. Comin' for to carry me home.]

Yes, it's ludicrous. Just look at the net worth of folks in general. It is pathetically small. Exclusive of housing equity, and their social security expectancy (which is a big number, maybe around 300K in present value terms, for a person getting the max, and starting to take SS at 65), maybe 10% of the population upon retirement has a net worth of 300K or more.

and yet the vast majority of households have multiple TVs, cars, game systems...etc, etc, etc.  In fact, we have a large chunk of the population dropping $5-10 of post-tax dollars a day at Starbucks..and a sizable chunk have a swimming pool in their backyard.

That's one of the things SS has done - give people the false impression that government is going to take care of their retirement. 

[Wonkish1]

There's a limit to what frugality (especially with respect to durable goods) can accomplish when an increasingly large portion of the household budget goes toward essential services like healthcare and education. Gas, food, and housing prices also play an important role.

But you've got to agree that its quite impressive to see how frugal new immigrants(from developing countries) are able to be in the US and the unbelievably high savings rates they have on low incomes.

[Swing low, sweet chariot. Comin' for to carry me home.]

But you've got to agree that its quite impressive to see how frugal new immigrants(from developing countries) are able to be in the US and the unbelievably high savings rates they have on low incomes.

well, when you don't believe you have some God given right to have everything you want and that you're going to sink or swim on your own, it's easy to learn how to say "NO!"

[Swing low, sweet chariot. Comin' for to carry me home.]

Furthermore, it's possible to be too frugal - it is sometimes a good choice to borrow to invest in your health or education (or the health and education of your children).

oh...well...hmmm....I forgot to mention the fact that I worked my way through college while earning a EE degree...and never took out a student loan.

now, my wife, on the other hand, had 5k worth of student loan debt when I married her....I paid that off within the first year

[Wonkish1]

I honestly haven't had much contact with low-income immigrants in the United States, so I won't presuppose anything about their typical lifestyles.

I'll concede to you the broader point that there are ways for people to lower their expenses. They can limit spending on entertainment, buy used goods, live in smaller houses, maintain fewer cars and drive fewer miles, and be more price conscious.

There are also more destructive ways in which people can lower their spending. They might not visit a dentist, they might not buy healthful foods, they might be more hesitant to go to a doctor when they experience troubling symptoms or they might contribute less to the education of their children.

My point is that I don't accept the assumption that people will be able to save enough for a secure retirement by eliminating luxuries, inefficiencies and frivolities from the household budget. Financial discipline is important, but it's limited. Furthermore, it's possible to be too frugal - it is sometimes a good choice to borrow to invest in your health or education (or the health and education of your children).

See that is where you just don't know much about time value of money(compound interest), saving, etc.

Try like $7 a day. That's it and that is adjusted for a high inflation average(3%) and using conservative estimates(9%)-- 9-3=6% assumption.