It's true. You see people who are "poor" yet have the latest iPhone every year plus Netflix and every pay cable channel and every other gadget, spend $6 a day on lattes at Starbucks and $10 a pack (or more) on cigarettes (in NYC, at least).
When we started, I was making $65 a week and Jackie went from secretary to teacher because she got a raise to $7500 a year. Granted, she had a great union and has a real pension that most don't, but you have to make smarter choices.
Wise words from George. And if you haven't read Neil Gabler's article in the Atlantic about his inability to come up with $400 for an emergency, it's worth a look, even if you may swing back and forth between empathy and irritation.
I can't believe that Gabler thing. The man has been quite successful and has written well-regarded books. I'm curious what he spent the money on.
On the other issue, our nieces and nephews seem to have the attitude that you work at something for two or three years and then move on to something else. Jackie said even young teachers have a similar attitude.
Deb, the Neil Gabler article triggered this response on my part. Gabler admits he doesn't know anything about money. He spent money on his kids's education and his daughter's wedding. I couldn't live with ZERO money in the bank as 47% of Americans seem to do now.
Gabler lays out his errors pretty clearly, Jeff. The first thing was that he and his wife chose to purchase a house in the Hamptons. Although he stresses this was the "lesser Hamptons" (see, I told you there was irritation involved in reading), it was an upscale home nonetheless. Then the couple made the decision to live on one income (Gabler's) while his wife, who previously had a high-powered job in the film industry, became a stay-at-home mom. Gabler's income began to decline as the publishing industry changed and he was asked to return a huge advance when he missed a deadline; meanwhile, he didn't tell his wife how badly in debt they had become. Finally, Gabler had to ask his parents to pay for his daughters' college educations--so their educations were paid for, but it meant Gabler received no inheritance when his parents passed away. There's more...and at every step you find yourself simultaneously feeling sorry for him and feeling exasperated by his choices. It's still worth reading regardless of your feeling about his decision-making.
OK, I read the article now and both of us think he's an idiot and doesn't deserve our sympathy. He paid for his daughter to go to Stanford? It reminds me of the TV show PARENTHOOD where Peter Krause's character couldn't or wouldn't tell his daughter that no, he couldn't afford to pay for her to go to Cornell.
I know it's easy for me to talk because we don't have kids, but I know how we were brought up. It was a city or state school, not Harvard so we wouldn't feel like we couldn't keep up with the Trumps and Hiltons. We couldn't. Deal with it.
Admittedly I'm an old guy and from an older time, but Judy didn't work for years after Allen was born. I was a teaching assistant for part of that time. Later Judy had a part-time job for a few years, but when we moved to Alvin, she didn't work. Yet I put two kids through college and one through law school. They got out with no debt. Of course they had jobs, which helped, and part of the time I was writing, which also helped. I don't see how anyone in Gabler's situation could be irresponsible to wind up with no money in the bank.
I am the first to admit we are lucky. When we started out we knew nothing. As mentioned, Jackie started at $7500 a year. We knew that if she worked for 25 or 30 years she would get a pension but not how much or if we could live on it. Frankly, it didn't cross our minds for years.
We went to England every summer so I could buy the books to sell during the year, and for a number of years we had a lot of credit card debt to pay off during the year.
But she went up the steps, the contracts slowly got better, and I used transferring debt to interest-free cards to get even and then ahead.
When friends who were older started retiring and told us that lower taxes and the pension allowed them to take home More in retirement than they made when they were working we thought, lucky them.
But when we got to the magic number - 33 years working at age 55, lo and behold! Jackie worked a 34th year and made a Lot of per session money that was added to her pension.
We always knew we would get no money from my parents, at least, as my mother always freely announced that she was spending her children's inheritance. My in-laws were in the dictionary under "cheap" and we basically got little if anything from either couple most of our marriage. But maybe that wasn't a bad thing.
In the end, we did end up inheriting a similar amount (more than we would have expected) from each of them.
Bill, for a variety of reasons Neil Gabler has a lot of company of people who can't come up with $400 in cash. In 10 years, many Baby Boomers will have spent their money and drained their 401ks and 403bs and will be broke and busted. But no one is addressing that future problem. We're busy debating Important Stuff like who gets to use a public bathroom.
Once upon a time, companies promised pensions and medical insurance for retirees. They took that away for greed of greater profit. Once upon a time, banks paid interest to people who saved. They took that away for greed of greater profits. And there came huge expenses and a loss of income. A lot of boomers got caught by that. Jeff, Jackie (and I) were lucky because we had public pensions instead of private company ones. Barbara made three times what I did, and we saved as much as we could, but before she met me, she lived paycheck to paycheck. Now she's smart with money, but her company took away retirees pension and medical insurance, so now all she has is Social Security. If we hadn't saved, and if I didn't have a good pension, we'd be crammed into a 1 room apt on the crummy part of a much less nice town, and have to pinch pennies. Not that we're rich, mind you, but we do have a nice home (Deb might disapprove).
So sometimes it's common sense, sometimes it's luck.
Oh no--please don't think I'm critical of a nice, big home! I love a big house. What I was critical of was Gabler's sort of humble-brag about living in the Hamptons...all the while not being able to afford to repair his ten-year old vehicle. He made some choices that at the time seemed valid but as time went on caused even more fiscal bleed-out. (I think he mentions in the article that he took out a home equity account, which he had to repay along with his first mortgage. Rule number one: don't treat your home as an ATM machine!)
I'm currently working with an 81-year old teacher (she's very spry and could pass for 20 years younger than that) who did a retire/rehire thing about 15 years ago before the school system clamped down on "double-dipping". Now she can't afford to retire for real because she's raising grandkids and even great- grandkids. Meanwhile, another co-worker in his early seventies has to work because the company he worked for for 25+ years halfed his pension...and that's totally legal to do. It's a terrible situation and only getting worse when at least one of the two major political parties thinks the primary role of everyone is to make life easier for billionaires.
/Dismounting soap box. Sorry--I forgot I wasn't commenting on George's blog.
Deb's right. Look at the latest Trump scam because he isn't getting enough tax breaks. He claimed his Westchester golf course was worth $50 MILLION. Last year it was assessed at $14.3 million. Now his "people" doing his taxes claim it is only worth $1.4 million so he'll only have to pay a tenth of what he owes!
I read Gabler's essay and was, well, appalled is the only word I can come up with. He and his wife made a series of bad decisions, one after another (buying the house in the Hamptons BEFORE selling the one in Brooklyn was my favorite). Not setting limits on where his kids could go to college (last I heard, New York has a fair number of quite good public universities), and so on. But the $400 thing was the tipping point for me.
When I was in grad school (1970-1973), being paid an annual TA salary that started at $300 a month (for 10 months), rising to $360 a month, and my wife was making about $4,000 a year working for a bank (before she got into the MA program in English, and started making the TA salary), we actually managed to save money, (Now, partly, that was because there was nowhere to spend it in Morgantown, West Virginia, but mostly, it's because that's how we thought we should live). I have ALWAYS saved; even now, in retirement, the balance in our checking account seems to rise monthly.
Now, I never worked as a free-lance writer (I am way too risk-averse for that), and I managed to get into university teaching (and tenure) before that became borderline impossible--so I was, to some extent lucky). But I also tried not to make bad decisions about money. Other aspects of my life we will not discuss.
OK. Now I'm reading the linked article, So far, the only thing I disagree with is "Few schools offer courses in money management." EVERY school at which I have taught offered a course, or multiple courses, in personal finance. At my last institution, it was REQUIRED for business majors (and, if I could have convinced my faculty colleagues, it would have been required for everyone). I would add a #4, though, to his suggestions. SAVE FIRST--put the max in a 401(K) or other savings instrument, and do it automatically, as a payroll deduction. [Taking my own advice, for 25 years I made the max contribution to a 403(B), the non-profit equivalent of a 401(K).]
19 comments:
A word from the wise.
If anyone here knows about money, it's George.
It's true. You see people who are "poor" yet have the latest iPhone every year plus Netflix and every pay cable channel and every other gadget, spend $6 a day on lattes at Starbucks and $10 a pack (or more) on cigarettes (in NYC, at least).
When we started, I was making $65 a week and Jackie went from secretary to teacher because she got a raise to $7500 a year. Granted, she had a great union and has a real pension that most don't, but you have to make smarter choices.
I usta have millions, but I spent it all on chili dogs. Dang, I wish id'a know that fella and did what he saidta.
Difficult to read the article with the huge red box in the middle of the page exhorting me to sign up for the Buffalo News.
Wise words from George. And if you haven't read Neil Gabler's article in the Atlantic about his inability to come up with $400 for an emergency, it's worth a look, even if you may swing back and forth between empathy and irritation.
I can't believe that Gabler thing. The man has been quite successful and has written well-regarded books. I'm curious what he spent the money on.
On the other issue, our nieces and nephews seem to have the attitude that you work at something for two or three years and then move on to something else. Jackie said even young teachers have a similar attitude.
Deb, the Neil Gabler article triggered this response on my part. Gabler admits he doesn't know anything about money. He spent money on his kids's education and his daughter's wedding. I couldn't live with ZERO money in the bank as 47% of Americans seem to do now.
Gabler lays out his errors pretty clearly, Jeff. The first thing was that he and his wife chose to purchase a house in the Hamptons. Although he stresses this was the "lesser Hamptons" (see, I told you there was irritation involved in reading), it was an upscale home nonetheless. Then the couple made the decision to live on one income (Gabler's) while his wife, who previously had a high-powered job in the film industry, became a stay-at-home mom. Gabler's income began to decline as the publishing industry changed and he was asked to return a huge advance when he missed a deadline; meanwhile, he didn't tell his wife how badly in debt they had become. Finally, Gabler had to ask his parents to pay for his daughters' college educations--so their educations were paid for, but it meant Gabler received no inheritance when his parents passed away. There's more...and at every step you find yourself simultaneously feeling sorry for him and feeling exasperated by his choices. It's still worth reading regardless of your feeling about his decision-making.
OK, I read the article now and both of us think he's an idiot and doesn't deserve our sympathy. He paid for his daughter to go to Stanford? It reminds me of the TV show PARENTHOOD where Peter Krause's character couldn't or wouldn't tell his daughter that no, he couldn't afford to pay for her to go to Cornell.
I know it's easy for me to talk because we don't have kids, but I know how we were brought up. It was a city or state school, not Harvard so we wouldn't feel like we couldn't keep up with the Trumps and Hiltons. We couldn't. Deal with it.
Admittedly I'm an old guy and from an older time, but Judy didn't work for years after Allen was born. I was a teaching assistant for part of that time. Later Judy had a part-time job for a few years, but when we moved to Alvin, she didn't work. Yet I put two kids through college and one through law school. They got out with no debt. Of course they had jobs, which helped, and part of the time I was writing, which also helped. I don't see how anyone in Gabler's situation could be irresponsible to wind up with no money in the bank.
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
No.
I am the first to admit we are lucky. When we started out we knew nothing. As mentioned, Jackie started at $7500 a year. We knew that if she worked for 25 or 30 years she would get a pension but not how much or if we could live on it. Frankly, it didn't cross our minds for years.
We went to England every summer so I could buy the books to sell during the year, and for a number of years we had a lot of credit card debt to pay off during the year.
But she went up the steps, the contracts slowly got better, and I used transferring debt to interest-free cards to get even and then ahead.
When friends who were older started retiring and told us that lower taxes and the pension allowed them to take home More in retirement than they made when they were working we thought, lucky them.
But when we got to the magic number - 33 years working at age 55, lo and behold! Jackie worked a 34th year and made a Lot of per session money that was added to her pension.
We always knew we would get no money from my parents, at least, as my mother always freely announced that she was spending her children's inheritance. My in-laws were in the dictionary under "cheap" and we basically got little if anything from either couple most of our marriage. But maybe that wasn't a bad thing.
In the end, we did end up inheriting a similar amount (more than we would have expected) from each of them.
Bill, for a variety of reasons Neil Gabler has a lot of company of people who can't come up with $400 in cash. In 10 years, many Baby Boomers will have spent their money and drained their 401ks and 403bs and will be broke and busted. But no one is addressing that future problem. We're busy debating Important Stuff like who gets to use a public bathroom.
Once upon a time, companies promised pensions and medical insurance for retirees. They took that away for greed of greater profit. Once upon a time, banks paid interest to people who saved. They took that away for greed of greater profits. And there came huge expenses and a loss of income. A lot of boomers got caught by that. Jeff, Jackie (and I) were lucky because we had public pensions instead of private company ones. Barbara made three times what I did, and we saved as much as we could, but before she met me, she lived paycheck to paycheck. Now she's smart with money, but her company took away retirees pension and medical insurance, so now all she has is Social Security. If we hadn't saved, and if I didn't have a good pension, we'd be crammed into a 1 room apt on the crummy part of a much less nice town, and have to pinch pennies. Not that we're rich, mind you, but we do have a nice home (Deb might disapprove).
So sometimes it's common sense, sometimes it's luck.
Oh no--please don't think I'm critical of a nice, big home! I love a big house. What I was critical of was Gabler's sort of humble-brag about living in the Hamptons...all the while not being able to afford to repair his ten-year old vehicle. He made some choices that at the time seemed valid but as time went on caused even more fiscal bleed-out. (I think he mentions in the article that he took out a home equity account, which he had to repay along with his first mortgage. Rule number one: don't treat your home as an ATM machine!)
I'm currently working with an 81-year old teacher (she's very spry and could pass for 20 years younger than that) who did a retire/rehire thing about 15 years ago before the school system clamped down on "double-dipping". Now she can't afford to retire for real because she's raising grandkids and even great- grandkids. Meanwhile, another co-worker in his early seventies has to work because the company he worked for for 25+ years halfed his pension...and that's totally legal to do. It's a terrible situation and only getting worse when at least one of the two major political parties thinks the primary role of everyone is to make life easier for billionaires.
/Dismounting soap box. Sorry--I forgot I wasn't commenting on George's blog.
Deb's right. Look at the latest Trump scam because he isn't getting enough tax breaks. He claimed his Westchester golf course was worth $50 MILLION. Last year it was assessed at $14.3 million. Now his "people" doing his taxes claim it is only worth $1.4 million so he'll only have to pay a tenth of what he owes!
I read Gabler's essay and was, well, appalled is the only word I can come up with. He and his wife made a series of bad decisions, one after another (buying the house in the Hamptons BEFORE selling the one in Brooklyn was my favorite). Not setting limits on where his kids could go to college (last I heard, New York has a fair number of quite good public universities), and so on. But the $400 thing was the tipping point for me.
When I was in grad school (1970-1973), being paid an annual TA salary that started at $300 a month (for 10 months), rising to $360 a month, and my wife was making about $4,000 a year working for a bank (before she got into the MA program in English, and started making the TA salary), we actually managed to save money, (Now, partly, that was because there was nowhere to spend it in Morgantown, West Virginia, but mostly, it's because that's how we thought we should live). I have ALWAYS saved; even now, in retirement, the balance in our checking account seems to rise monthly.
Now, I never worked as a free-lance writer (I am way too risk-averse for that), and I managed to get into university teaching (and tenure) before that became borderline impossible--so I was, to some extent lucky). But I also tried not to make bad decisions about money. Other aspects of my life we will not discuss.
OK. Now I'm reading the linked article, So far, the only thing I disagree with is "Few schools offer courses in money management." EVERY school at which I have taught offered a course, or multiple courses, in personal finance. At my last institution, it was REQUIRED for business majors (and, if I could have convinced my faculty colleagues, it would have been required for everyone). I would add a #4, though, to his suggestions. SAVE FIRST--put the max in a 401(K) or other savings instrument, and do it automatically, as a payroll deduction. [Taking my own advice, for 25 years I made the max contribution to a 403(B), the non-profit equivalent of a 401(K).]
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