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Living and Retiring within your means - or - How not to become "poor"

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  1. #1

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    Living and Retiring within your means - or - How not to become "poor"

    Quote Originally Posted by jimbo:
    The sad fact is that a majority of us are two to three pay cheques away from being in a similar situation.

    If you lost your job today and couldn’t find anything suitable, How long would your savings if you have any last you?
    For the rest of my life, with a few minor changes to lifestyle. I couldn't live without that kind of safety net. I find it hard to understand why people do (particularly those of us lucky enough to be earning decent salaries for a number of years).

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    Quote Originally Posted by jimbo:
    The sad fact is that a majority of us are two to three pay cheques away from being in a similar situation.

    If you lost your job today and couldn’t find anything suitable, How long would your savings if you have any last you?
    If people are in that situation, they should seriously reevaluate their lifestyle. So typical of people today, they want everything right away, the newest and shiniest toys and if they need to put it on credit then it's fine. I have very little sympathy for that...

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    Quote Originally Posted by HK_Katherine:
    For the rest of my life, with a few minor changes to lifestyle. I couldn't live without that kind of safety net. I find it hard to understand why people do (particularly those of us lucky enough to be earning decent salaries for a number of years).
    Same here.

    I haven’t had a full time job in 5 years, A few short contracts here and there and I’m doing fine.
    Mortgage and debt free so I don’t have to stress anymore.

    It’s when people I know are on $120k a month plus and whine when the tax bill comes in, What on earth have they been doing with all there money over the past year?

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    Quote Originally Posted by jimbo:
    Same here.

    I haven’t had a full time job in 5 years, A few short contracts here and there and I’m doing fine.
    Mortgage and debt free so I don’t have to stress anymore.

    It’s when people I know are on $120k a month plus and whine when the tax bill comes in, What on earth have they been doing with all there money over the past year?
    A couple of kids, a wife with propensity to buy jewellery, a new Porsche here and there... or just "the house of our dreams" Add a mistress on top and even 200K a month might not be enough.

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    *sigh* or paying of hundreds of thousands in student loans... or paying rent because you don't have 50% downpayment for a 4 million dollar shoebox... And here goes this generation pre-1980s, post-1980s debate again...
    @HK_Katherine I'm curious if you have some insights about how you managed to secure that for yourself? Was it with investments or savings only?

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    Quote Originally Posted by Elegiaque:
    *sigh* or paying of hundreds of thousands in student loans... or paying rent because you don't have 50% downpayment for a 4 million dollar shoebox... And here goes this generation pre-1980s, post-1980s debate again...
    @HK_Katherine I'm curious if you have some insights about how you managed to secure that for yourself? Was it with investments or savings only?
    I stopped working full time in my 40s but never felt the need to buy a new car or have fancy 60 inches TV, latest iPhones or PS4 and to stay at 5 star resorts. There's no magic formula or shortcut, you make sure you put money away every month(yes that often means sacrifice!) and either invest in a property or a good variety of blue chip stocks with dividends and let the market do its thing. Buying a property is an easy forced savings plan for you or you let the tenant pay the mortgage and 20-25 years down the road you have a bundle of cash and more if you are lucky with the market.

    I see so many young graduates that have student loans but want a new car, holidays, shiny electronics in their flats and going out to play all the time then complain they have no money to save. There are people like that in every generations but I guess consumerism just keep going crazy. I certainly would have never considered having a $1000 dollar phone AND computer AND tablet AND TV in my 20s or even 30s yet that's what you see nowadays.
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  7. #7
    Quote Originally Posted by Golem:
    Buying a property is an easy forced savings plan for you or you let the tenant pay the mortgage and 20-25 years down the road you have a bundle of cash and more if you are lucky with the market.
    Most people exhaust their savings on a down-payment to acquire a property, which leaves them at risk to be in a situation as @jimbo described. Couple that with child-rearing years and it's not so easy to get out of that situation like that. There are constant new expenses to cover. Being in the first few years into a 25-year mortgage also means that there won't be much equity to pull out in case of an emergency unless the price of the property has increased dramatically.

    Of course, once past that stage it's much easier to build a safety net.

    Elegiaque is talking about American-style student loans. Can you please share with us how much you paid for your education?

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    I won't say, but yes, I'm referring to an American-style university system.

    My point is, not all young people are interested in buying stuff and having expensive cars. It's a stereotype, and it's not always true. I think it's a very difficult time for young people to secure their livelihood like HK_Katherine has said she has, at least not without coming from a family background that gives you a head start (like inheriting a property in Paris...). It's most likely not at all because young people are buying Porsches... In fact, I hardly know anyone like that. Most are struggling to pay for kids' school and rent, and can very well forget about investing in a home as a kind of security (also now largely referred to as "property"). It's because we live in this new age with increasing education costs, decreasing job security, and a very strange, novel housing cost bubble situation.

    Again, do you think all the crap people buy really adds up to the $2 million you would need for a down payment of a shoebox home here?

    The picture may very well be completely different in any "normal" town or city in the world, and perhaps the issue I'm talking about is mostly with NY, London, SF, Hong Kong, Tokyo, Paris... And yes, America in particular has a terrible consumer culture that has gotten the average Joe into a lot of financial trouble. Part of the problem there is that it is also a car culture.


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    Quote Originally Posted by Elegiaque:
    *sigh* or paying of hundreds of thousands in student loans... or paying rent because you don't have 50% downpayment for a 4 million dollar shoebox... And here goes this generation pre-1980s, post-1980s debate again...
    @HK_Katherine I'm curious if you have some insights about how you managed to secure that for yourself? Was it with investments or savings only?
    What's the difference? You save from your salary and you invest what you save. Whether in the bank account (which was not always 0% interest) or otherwise. I would say that I saved in a simple bank account when I started out, purchased a flat very soon after leaving university (the mortgage was about 90% of my salary, i lived on second-hand clothes and vegetables as I could not afford meat, and eating out was utterly impossible). As my salary increased, my savings rate increased. My spending rate always increased at a much lower rate than my salary increases so the savings rate increases much more. Plus the return on investments = security at 50.

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    It is certainly a different ball game to buy a property in HK however again, you see the attitude of wanting things that can't be had. Here it might be a centrally located bigger flat in a nice building, in America it might be a large house with two cars and a swimming pool. Go to Tuen Mun for example and you won't need two million and if you do, it won't be a shoe box.

    I remember a good friend of mine who lived in Vancouver in the 90s and with a growing family, he wanted a house. Well, it wasn't going to happen unless he moved to an outer suburb with an hour+ commute in traffic daily or if the two f them worked full time and stretch themselves. He decided to move the family to a smaller city in Eastern Canada and bought a 3000 sq ft house on one acre of land and 20 minutes drive from downtown.

    I agree that the cost of studying and property makes it challenging. However I see students that feel they need to go study abroad or in a different city in North America instead of the local college or university. Well, there's a very simple truth that will never change for 99% of the population. You can't have everything and sacrifices need to be made. Unfortunately(or fortunately) for most people under 60-70, they have never really known hardship and sacrifice like those who lived through wars and the great depression. It's made people soft and often too greedy in my opinion.


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