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Old 01-05-2017, 08:28 AM
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Default Pay yourself one hour's worth of income each day

Per David Bach as referenced in the article posted today

http://www.cnbc.com/2017/01/05/self-...-get-rich.html
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Old 01-05-2017, 08:37 AM
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Originally Posted by StormRichards View Post
Per David Bach as referenced in the article posted today

http://www.cnbc.com/2017/01/05/self-...-get-rich.html
That's nothing but "feed the pig 12.5%".
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Old 01-05-2017, 08:47 AM
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Good advice to follow. A lot of us are probably well above that figure but for those who struggle to save its a good start.
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Old 01-05-2017, 08:53 AM
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Originally Posted by rennigade View Post
Good advice to follow. A lot of us are probably well above that figure but for those who struggle to save its a good start.
Bah. It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%.

Heck, we just bumped our 401(k) from 6% to 9%...
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Old 01-05-2017, 09:24 AM
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Originally Posted by Nutria View Post
Bah. It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%.

Heck, we just bumped our 401(k) from 6% to 9%...
Perhaps they are struggling because of poor spending habits. It is amazing what you can get by on when you never actually see the money.
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Old 01-05-2017, 09:34 AM
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Originally Posted by StormRichards View Post
Perhaps they are struggling because of poor spending habits. It is amazing what you can get by on when you never actually see the money.
Few people -- even savers like us who defer 25% of income above and beyond 9% 401(k) -- just want to "get by".
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Old 01-05-2017, 09:45 AM
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Few people -- even savers like us who defer 25% of income above and beyond 9% 401(k) -- just want to "get by".
I suspect no one wants to just get by.

However, I would rather make some sacrifices today and better prepare myself to not have to get by during retirement.
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Old 01-05-2017, 12:40 PM
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I suspect no one wants to just get by.

However, I would rather make some sacrifices today and better prepare myself to not have to get by during retirement.
I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."
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Old 01-05-2017, 12:56 PM
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I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."
You're right. First you need to tell them to give up the Starbucks every day, and all of the other non necessities that they indulge in.
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Old 01-05-2017, 01:15 PM
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I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."
I dont understand how someone can not save a single penny. What are they indulging in that prevents them from saving anything?

I dont feel like I live an extravagant life yet I save a lot of money and never go without...can buy the things I want and take vacations without issues. If I stopped contributing to 401k and roth ira...I could basically live large. I wouldnt even know what to do with the extra $2k/month. I guess if I ate out every meal and bought coffee every morning I could blow $1k/month.
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Old 01-05-2017, 01:41 PM
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Originally Posted by rennigade View Post
I dont understand how someone can not save a single penny. What are they indulging in that prevents them from saving anything?
For us, that was the upsetting part: the money just... disappeared. Once we analyzed our complete spending habits, we were able to trim out the stupid & wasteful stuff. Then exercised some discipline in spending.

We're above the 90% percentile in family income, though. It would be significantly harder for someone in the 25% percentile.
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Old 01-05-2017, 02:00 PM
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We're above the 90% percentile in family income, though. It would be significantly harder for someone in the 25% percentile.
Those people probably aren't living in the same neighborhood as you are, and likely have much lower expenses.

Perhaps more difficult but still should be able to save if they analyze their spending.
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Old 01-05-2017, 02:05 PM
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Originally Posted by StormRichards View Post
Those people probably aren't living in the same neighborhood as you are, and likely have much lower expenses.
1/3 the expense but 1/5 the income is a non-linear problem.

Quote:
Perhaps more difficult


Quote:
but still should be able to save if they analyze their spending.
Some. But certainly not 12.5% anywhere near immediately.
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Old 01-05-2017, 03:17 PM
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I believe the reason most don't save is because they don't have to. I mean, they have to, to prepare, but they don't have to. You have to pay a min payment on a loan or cc, light bill, etc. You don't have to pay more to debt or save, therefore, most simply don't.

If they realized how much money they are stealing from themselves later in life they would save now. People are too narrow minded, and only worried about today. So, they don't feel like they have to, so they don't. I don't know of anybody who doesn't know they should, but they pass it off with "I'll do it later" mindset.

Of course, you also have some who don't understand why they don't have money. If you are where most households are (60s and under) then it is not as easy as it seems. Not if you have car payments and kids. The process of saving can be so slow it gets discouraging, so they just shrug and ignore it. CC debt follows.
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Old 01-05-2017, 03:25 PM
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I wish everybody could see this graph to get an understanding of what it means to wait to start saving. It's hypothetical, and a bit dramatic admittedly, but gets the point across.
Attached Images
File Type: jpg 44kvs209k.jpg (91.1 KB, 20 views)
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Old 01-05-2017, 03:38 PM
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Originally Posted by Nutria View Post
1/3 the expense but 1/5 the income is a non-linear problem.
What are you basing your 1/5 the income on? Just pulling it out of your **** for the sake of arguing?

Last edited by james.hendrickson; 01-05-2017 at 03:39 PM. Reason: profanity
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Old 01-05-2017, 06:20 PM
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What are you basing your 1/5 the income on? Just pulling it out of your **** for the sake of arguing?
Aren't you the arrogant one...

The 25% family income percentile just happens to be 1/5 of my family's income.

Now, your task is to .
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Old 01-05-2017, 06:37 PM
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Default Getting in the savings mindset

Great thread guys. I have read a lot of David Bach's work and I agree with some of his key points. Whether its 1 hour of your income or any other amount, its important to get in the savings mindset. I've seen too many people, especially in my age group (I'm 25) spend money like it's water. Many of them don't know the damage that their frivolous spending will have on their ability to be financially independent one day. My hope is that more people will see the err in their ways and set aside funds for their future.

Raphael
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Old 01-05-2017, 07:30 PM
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Originally Posted by Nutria View Post
Aren't you the arrogant one...

The 25% family income percentile just happens to be 1/5 of my family's income.

Now, your task is to .
So it is the 1/3 expenses you pulled out of your arse then
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Old 01-05-2017, 08:27 PM
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Originally Posted by StormRichards View Post
So it is the 1/3 expenses you pulled out of your arse then
Wrong again. Our current "bare" bones, no health insurance expenses per month are $3,000. One third of that is a nice round $1,000. Bounce over to https://www.savingadvice.com/forums/...ed-advice.html and see that a single mother's rent is $820/month. Do you think my mortgage is 3x$820 = $2,460 (or even 5x$820 = $4,100/month)? Fat chance.

q.e.d., expenses don't drop linearly with income.
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