Saving 15% works!

[disneysteve]

There are still those who think having an asset they can touch is better than having numbers floating around in cyber space. Even with things you can touch it didnt help millions of people who lost those items during the 2008 housing crash and it didnt help those who still are in possession of those tangible assets who are still underwater by $100k+.

Of course, many of the people who got wiped out in the housing crash got in that situation because of stupid loans and poor behavior. If they had put down 20% and not spent more than 2-3 times their income, they probably would have been just fine.

[Petunia 100]

Who only knows. My point is that nothing goes straight up.

Of course. The woman in the OP who has been saving/investing 15% of her income for 20 or so years now probably already knows this, don't you think?

[Petunia 100]

Of course, many of the people who got wiped out in the housing crash got in that situation because of stupid loans and poor behavior. If they had put down 20% and not spent more than 2-3 times their income, they probably would have been just fine.

"Just fine", but still out a whole lot of money.

[disneysteve]

"Just fine", but still out a whole lot of money.

Only on paper. The loss wouldn't be realized unless they were forced to sell. The same can be said for the stock market. In the last bear market, the S&P 500 dropped over 56%. We lost a ton of money on paper, but we didn't sell. We held steady (and continued to invest actually) and today, we're doing just fine, as are most people who didn't panic and walk away from their homes just because the value dropped.

[Nutria]

Could you be so kind as to let everyone on savingadvice know when the bear market will start? That way we can all shift our money around before said date happens. Pretty please???

Exactly. Just saying the generically nonspecific, "A bear market is approaching." is as useless as saying in August 2001 that "'a terrorist event' is going to happen"...

It just provides zero useful information.

[Petunia 100]

Only on paper. The loss wouldn't be realized unless they were forced to sell. The same can be said for the stock market. In the last bear market, the S&P 500 dropped over 56%. We lost a ton of money on paper, but we didn't sell. We held steady (and continued to invest actually) and today, we're doing just fine, as are most people who didn't panic and walk away from their homes just because the value dropped.

The point is, having put 20% down does not protect one from steep declines in the local real estate market. If it's down, then it's down; there's not a whole lot to be done about it.

[rerod]

Of course, many of the people who got wiped out in the housing crash got in that situation because of stupid loans and poor behavior. If they had put down 20% and not spent more than 2-3 times their income, they probably would have been just fine.

I considered buying a foreclosed home years ago and found out the bank first lent the previous owner $10k, who turned around and used it as a down payment. So the owner was out nothing and probably had payments cheaper than his last rental.

Makes walking away from a home loan very easy.

[LivingAlmostLarge]

the 15% proves that even not making more than $50k ever and saving just 15% not more allows one to make a huge dent in saving for retirement if you start early.

[Nutria]

the 15% proves that even not making more than $50k ever and saving just 15% not more allows one to make a huge dent in saving for retirement if you start early.

Completely ignored is this long thread is, "and she has her husband's very comfortable income." If she were a single mother, the math would obviously still work, but saving 15% wouldn't be so practical...

[LivingAlmostLarge]

Completely ignored is this long thread is, "and she has her husband's very comfortable income." If she were a single mother, the math would obviously still work, but saving 15% wouldn't be so practical...

No she wasn't married when she started at 18 saving 15% of her income. She made $12/hr punching a register. Then she went up to $23/hr and kept on saving. She's almost 40 and worked full time until 2 years ago and she didn't get married until 30. So she worked and save 15% without her husband's money. It was just a habit she had and continued after marriage. Are they comfortable? Yes. Did she stop working? Yes.

But i think that if she were a single mother she wouldn't be living the life she had now. And I think she would be saving because she did it before husband and kids.