Obamamerica

[ratherfish]

Net Worth of American Family Falls 40% in Three Years

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010.

http://www.washingtonpost.com/business/ ... story.html



Be sure to write a thank you note to Carter for the community reinvestment act.
To BJ Clinton for putting it on steroids.
And to Obama for being a total incompetent!

"the private sector is fine"

FIRE THE LIAR!

[KaosDad]

But, he still blames Bush.


One of them.

Maybe both.

And Nixon....because he was, you know, bad.....

[ratherfish]

nixon%20humor_JPG%20300.jpg (13.94 KiB) Viewed 1107 times

[Taggure]

I am sorry (Not Really) I know this is not the jokes thread but i just could not help myself from posting this on you thread.

Let the HiJack begain

Lil' Johnny Meets Barack

Barack Obama was visiting a primary school and he visited one of the classes. They were in the middle of a discussion related to words and their meanings. The teacher asked the president if he would like to lead the discussion on the word 'tragedy'. So our illustrious president asked the class for an example of a 'tragedy'.

One little boy stood up and offered: "If my best friend, who lives on a farm, is playing in the field and a tractor runs over him and kills him, that would be a tragedy.""No,' said Obama, 'that would be an accident."

A little girl raised her hand: "If a school bus carrying 50 children drove over a cliff, killing everyone inside, that would be a tragedy."

"I'm afraid not,' explained Obama.
'That's what we would call great loss."

The room went silent. No other children volunteered. Obama searched the room. "Isn't there someone here who can give me an example of a tragedy?"

Finally, at the back of the room, Little Johnny raised his hand. In a quiet voice he said: "If the plane carrying you and Mrs. Obama was struck by a 'friendly fire' missile and blown to smithereens, that would be a tragedy."

"Fantastic!' exclaimed Obama. 'That's right. And can you tell me why that would be tragedy?"

"Well,' says Johnny, 'It has to be a tragedy, because it sure as hell wouldn't be a great loss... and you can bet your ass it probably wasn't an accident either."

[Taggure]

Back to your thread now again I want to appoligize for the hijack and return control back to ratherfish

[ShotgunBlast]

I fail to see how this would have been any different under a McCain presidency except the left would read this story and say "Boo McCain".

Since the article mentions net worth and not income (two different things), the average working class American family mistakenly stores most of their net worth in their house and in their 401k, both which got hammered in the recession. Maybe this recession will teach people that they don't need McMansions and should learn how to save for their retirement better, but until shows like American Idol and The Bachelor start incorporating subtle financial tips into their shows I doubt it.

No doubt that a combination of the political "American dream" where everyone owns a home and corporate stupidity that loaned to anyone with a pulse got us in this mess. I don't see any political figure that has a magic formula to get us out of this hole and it's just going to take time for everything to work out.

What really burns me is how quick we are to forget things. A brand new subdivision near me opened up recently with homes starting at 250k and people are scooping them up. Um, don't we have a few million vacant foreclosures we could be buying before focusing on new and expensive construction? I'm young enough to know that I will experience another one of these events in my lifetime and I refuse to be on the losing end again.

[ratherfish]

I fail to see how this would have been any different under a McCain presidency except the left would read this story and say "Boo McCain".

Since the article mentions net worth and not income (two different things), the average working class American family mistakenly stores most of their net worth in their house and in their 401k, both which got hammered in the recession. Maybe this recession will teach people that they don't need McMansions and should learn how to save for their retirement better, but until shows like American Idol and The Bachelor start incorporating subtle financial tips into their shows I doubt it.

No doubt that a combination of the political "American dream" where everyone owns a home and corporate stupidity that loaned to anyone with a pulse got us in this mess. I don't see any political figure that has a magic formula to get us out of this hole and it's just going to take time for everything to work out.

What really burns me is how quick we are to forget things. A brand new subdivision near me opened up recently with homes starting at 250k and people are scooping them up. Um, don't we have a few million vacant foreclosures we could be buying before focusing on new and expensive construction? I'm young enough to know that I will experience another one of these events in my lifetime and I refuse to be on the losing end again.

Riddle me this;

Carter...community reinvestment act
BJ Clinton...Community reinvestment act on steroids... Frank and Dodd testify fanny and freddie are STRONG. Housing bust.
Obama.... blames Bush (who's administration warned congress) and puts a spending spree in place that wrecks what should be a strong recovery and prolongs it seemingly forever.

Many of us have seen several recessions.

Few have seen one handled more ineptly. (even by Carter)

Don't wanna loose more?

Vote Republican!

bull%20humor_JPG%20300.jpg (20.18 KiB) Viewed 1070 times

[ratherfish]

Back to your thread now again I want to appoligize for the hijack and return control back to ratherfish

Jump in anytime!

[FiremanBob]

I like the new phrase that Rush is using to sum him up: Barack Kardashian, the Celebrity of the United States.

[CCFan]

I fail to see how this would have been any different under a McCain presidency except the left would read this story and say "Boo McCain".

Since the article mentions net worth and not income (two different things), the average working class American family mistakenly stores most of their net worth in their house and in their 401k, both which got hammered in the recession. Maybe this recession will teach people that they don't need McMansions and should learn how to save for their retirement better, but until shows like American Idol and The Bachelor start incorporating subtle financial tips into their shows I doubt it.

I'll grant that most people shouldn't rely on their house as their sole vessel of retirement funding, but what's wrong with a 401k? What about the people that don't live in a McMansion and still lost $$$ in their retirement funds?

I'm young enough to know that I will experience another one of these events in my lifetime and I refuse to be on the losing end again.

I refused to be part of the recent downturn by not getting in over my head in the first place - and I've been investing more $$, since it was cheap. So, there *is* that. I fear we'll see a fairly disasterous situation in the near future that a lot of people won't recover from, unless we change course immediately....

[CCFan]

And, just because I couldn't help it....

o.jpg (50.58 KiB) Viewed 1044 times

[ShotgunBlast]

I'll grant that most people shouldn't rely on their house as their sole vessel of retirement funding, but what's wrong with a 401k? What about the people that don't live in a McMansion and still lost $$$ in their retirement funds?

Great question! Part of the reason pensions were so popular with employees is because the employer provided them, the employee didn't have to think about how to secure their retirement funds, and the pension was a steady stream of income. When employers (rightfully so) started figuring out this system wasn't going to work much longer and migrated employees to a 401k system and put the burden on the employee to figure out their own retirement, lack of education in this area has left the 401k ineffective as an adequate program to secure one's retirement.

As I see it, there are three distinct problems with 401k programs.

Problem 1. Overall, they are severly underfunded.

Choose your reading material, but any way you look at it, people do not have enough stashed away in their 401k to survive. People hardly contribute to their program because they don't make a lot to begin with, pull money out when hard times hit, etc. It was just reported last month that the median 401k account balance is only $23,000. That means there are just as many people with less than $23,000 in their account as there are people with more than $23,000 in their account. Last year it was reported that the average 401k account had $75,000 in it. Either way you look at it, that's not going to last a long time.

Let's take a really aggressive approach and say that someone at 25 years of age is saving $200/week in their 401k and does that for the next 40 years. That's $416,000 right off the bat, but the 401k people will run their magic calculators and say that an 8% return over 40 years will turn your $416,000 into $2,694,187. The three problems with this razzle dazzle is that 1. a very small percentage of people could really sock away $200/week for the next 40 years, 2. you're going to have to pay taxes on that cool 2 mil, and 3. 40 years from now 2 mil won't be what it's worth today.

http://news.goldseek.com/RickAckerman/1331046000.php
http://www.bloomberg.com/news/2011-05-1 ... -says.html
http://abcnews.go.com/Business/colorado ... d=16264550

Problem 2. The employee generally is still on an auto-pilot mentality when it comes to their retirement, thus not looking at their quarterly statements, switching funds to maximize return, etc.

The general public simply is not taught how to manage this stuff in school. Capital gains, passive income, etc is not part of the course materials. And even if it was, what student is going to believe it coming from some low-salaried teacher that probably doesn't even have a retirement plan started themselves? Every quarter people should be looking at their statements, seeing what funds are performing and which ones aren't. That simply doesn't happen because it's not fun. If my auto-pilot fund performs, great. If not I have something to bitch about at the watercooler (like that even happens!).

Problem 3. Any program that is based on a capital gain and not a passive income stream is subject to market volitility and will eventually run dry.

As you mentioned in your post that it's not smart to rely on your house as an investment, the 401k program is in the same boat because they both rely on a transaction that results in a capital gain. Everyone has heard of "buy low, sell high" but it's more complicated than that. For one thing your retirement strategy relies on the market. I feel awful for those poor souls who were looking to retire in 2008 and had their lives ruined because their 401k lost 50% of their value right before they cashed out. Even though the stock market is almost back to pre-recession levels doesn't mean those people's retirement programs are too. So the goal is to wait until the market bounces back to the level that you need it to so you can cash out. But when is that going to be? What if you need to retire now because of some medical condition or something? You shouldn't have a retirement program that is based on the timing of a market that you have no control of. But let's say that you did cash out at the right time. Now you have your golden goose (in the form of your retirement savings) and each year you carve a piece out of that golden goose so you can live. Now the goal is to die before you run out of the golden goose! And with people living longer than ever retirement years keep stretching. Not a good place to be!

Compare that with a passive income-based approach. Money coming in whether you go to your 9-5 or not. Rental properties, stocks that pay dividends, interest from loans that you make to others, etc. Now instead of carving into your golden goose each year, you are simply eating the eggs it lays each year. You still have your golden goose and it will continue laying eggs as long as you have it. It's also not subject to market volitility. I am making just as much money now with my rental houses (more even) than I did pre-2008 even though the value of my properties dropped 30-50%.

When your retirement strategy is based on passive streams of income, it also doesn't matter when you start retirement and when you die. I plan on having enough passive income to meet and exceed my monthly bills by the time I'm 40. When that happens essentially I'll be retired and can quit my job. And all I need to do is manage those passive streams of income to make sure that retirement will continue indefinitely.

Sorry for going on and on, but I really do think 401k programs don't benefit the people they're designed to help. You would be hard pressed to find an average Joe who was able to take his own money and put it in the stock market and over time end up with a comfortable retirement. Those people are few and far between. The only people I know that make it big in the stock market are those that manage a bunch of other people's money (hedge fund managers) or those like Mitt Romney that start off already in money.

[ratherfish]

"I plan on having enough passive income to meet and exceed my monthly bills by the time I'm 40."

Good luck with that.

You may still have a chance at that in America if we get rid of Obama and roll back his "change". The socialist society he wants has been proven worldwide to produce only bone crushing poverty.

It does however completely explain your authoritative tone on how to prepare for the future. I agree with many of your ascertions completely. I would love to have this conversation again in 25 years to see if it all worked out.

This one however;
"I fail to see how this would have been any different under a McCain presidency except the left would read this story and say "Boo McCain"." shows the frailty of your youth. Obama is doing what he said he would do. We should have known better. Some of us did, and others think it makes no difference.

I don't think we'd be seeing a "McCain care"... do you?

I think McCain would have spent more time in the office carrying out the affairs of state rather than on the B-ball court, on the golf course and on seemingly endless vacations with daily shedules that look more like a socially active teenager than a president.

[ShotgunBlast]

"I plan on having enough passive income to meet and exceed my monthly bills by the time I'm 40."

Good luck with that.

You may still have a chance at that in America if we get rid of Obama and roll back his "change". The socialist society he wants has been proven worldwide to produce only bone crushing poverty.

It does however completely explain your authoritative tone on how to prepare for the future. I agree with many of your ascertions completely. I would love to have this conversation again in 25 years to see if it all worked out.

At 32 years of age I have seven rental properties in my portfolio so I'd love to have this conversation again in 25 years. All of them cashflow a few hundred bucks a month so I'm well on my way to achieving my goal. I started six years ago with practically nothing and kept working at it. I haven't collected any W2 income in the last two and a half years when I quit my job during the worst economy since the Great Depression. I'm sorry if it comes off as an authoritative tone; I'm just saying what works for me and a lot of other people like me.

While I say that ordinary people can do these things and they are doing these things people like you say "good luck with that".

Good luck with whatever you're doing.

[ratherfish]

If it doesn't matter to you.....

Vote for Obama!

Just don't pretend it's wise to those who've seen it all before.


History has proved that socialism creates only bone crushing poverty.l I doubt you'd be immune.

[CCFan]

I'll grant that most people shouldn't rely on their house as their sole vessel of retirement funding, but what's wrong with a 401k? What about the people that don't live in a McMansion and still lost $$$ in their retirement funds?

Great question! Part of the reason pensions were so popular with employees is because the employer provided them, the employee didn't have to think about how to secure their retirement funds, and the pension was a steady stream of income. When employers (rightfully so) started figuring out this system wasn't going to work much longer and migrated employees to a 401k system and put the burden on the employee to figure out their own retirement, lack of education in this area has left the 401k ineffective as an adequate program to secure one's retirement.

As I see it, there are three distinct problems with 401k programs.

Problem 1. Overall, they are severly underfunded.

Choose your reading material, but any way you look at it, people do not have enough stashed away in their 401k to survive. People hardly contribute to their program because they don't make a lot to begin with, pull money out when hard times hit, etc. It was just reported last month that the median 401k account balance is only $23,000. That means there are just as many people with less than $23,000 in their account as there are people with more than $23,000 in their account. Last year it was reported that the average 401k account had $75,000 in it. Either way you look at it, that's not going to last a long time.

Let's take a really aggressive approach and say that someone at 25 years of age is saving $200/week in their 401k and does that for the next 40 years. That's $416,000 right off the bat, but the 401k people will run their magic calculators and say that an 8% return over 40 years will turn your $416,000 into $2,694,187. The three problems with this razzle dazzle is that 1. a very small percentage of people could really sock away $200/week for the next 40 years, 2. you're going to have to pay taxes on that cool 2 mil, and 3. 40 years from now 2 mil won't be what it's worth today.

http://news.goldseek.com/RickAckerman/1331046000.php
http://www.bloomberg.com/news/2011-05-1 ... -says.html
http://abcnews.go.com/Business/colorado ... d=16264550

Problem 2. The employee generally is still on an auto-pilot mentality when it comes to their retirement, thus not looking at their quarterly statements, switching funds to maximize return, etc.

The general public simply is not taught how to manage this stuff in school. Capital gains, passive income, etc is not part of the course materials. And even if it was, what student is going to believe it coming from some low-salaried teacher that probably doesn't even have a retirement plan started themselves? Every quarter people should be looking at their statements, seeing what funds are performing and which ones aren't. That simply doesn't happen because it's not fun. If my auto-pilot fund performs, great. If not I have something to bitch about at the watercooler (like that even happens!).

Problem 3. Any program that is based on a capital gain and not a passive income stream is subject to market volitility and will eventually run dry.

As you mentioned in your post that it's not smart to rely on your house as an investment, the 401k program is in the same boat because they both rely on a transaction that results in a capital gain. Everyone has heard of "buy low, sell high" but it's more complicated than that. For one thing your retirement strategy relies on the market. I feel awful for those poor souls who were looking to retire in 2008 and had their lives ruined because their 401k lost 50% of their value right before they cashed out. Even though the stock market is almost back to pre-recession levels doesn't mean those people's retirement programs are too. So the goal is to wait until the market bounces back to the level that you need it to so you can cash out. But when is that going to be? What if you need to retire now because of some medical condition or something? You shouldn't have a retirement program that is based on the timing of a market that you have no control of. But let's say that you did cash out at the right time. Now you have your golden goose (in the form of your retirement savings) and each year you carve a piece out of that golden goose so you can live. Now the goal is to die before you run out of the golden goose! And with people living longer than ever retirement years keep stretching. Not a good place to be!

Compare that with a passive income-based approach. Money coming in whether you go to your 9-5 or not. Rental properties, stocks that pay dividends, interest from loans that you make to others, etc. Now instead of carving into your golden goose each year, you are simply eating the eggs it lays each year. You still have your golden goose and it will continue laying eggs as long as you have it. It's also not subject to market volitility. I am making just as much money now with my rental houses (more even) than I did pre-2008 even though the value of my properties dropped 30-50%.

When your retirement strategy is based on passive streams of income, it also doesn't matter when you start retirement and when you die. I plan on having enough passive income to meet and exceed my monthly bills by the time I'm 40. When that happens essentially I'll be retired and can quit my job. And all I need to do is manage those passive streams of income to make sure that retirement will continue indefinitely.

Sorry for going on and on, but I really do think 401k programs don't benefit the people they're designed to help. You would be hard pressed to find an average Joe who was able to take his own money and put it in the stock market and over time end up with a comfortable retirement. Those people are few and far between. The only people I know that make it big in the stock market are those that manage a bunch of other people's money (hedge fund managers) or those like Mitt Romney that start off already in money.

Without going into too many details, I'll have a fully funded pension, and any retirement will be above and beyond that pension.... My problem with your initial assessment is that

a) you say people can't afford $200/week investing, but it's assumed that they'll have enough $$$ to form "passive streams of income" - how many rental properties can you purchase for $800/month? How do you acquire those revenue streams without outlays?

b) those same people that can't "afford" to fund their retirements are the ones driving around in new cars and with a big screen tv, even if they don't have a McMansion... it all comes down to personal responsibility. If you want to stick your head in the sand and go "Oh, we can't afford to save" then maybe you *should* work longer. (And by "you", I don't mean you personally). I would agree that people are on autopilot, those people deserve what's coming to them.

I by no means think your idea is a bad one, I just don't think *everyone* can rely on passive streams of income (Remember, you need tenants in your houses, or your sitting on liabilities...) I'm lucky enough to work in an environment where I will still receive a company pension, and my Roth IRA investments (which I won't pay additional taxes on, unlike the 401k scenario you mentioned above) will just be above and beyond...

[ShotgunBlast]

Great points.

a. I can only speak about rental properties because that's what I know, but with rentals you need cash, credit, time/desire, and skills. I work with partners that have cash that's sitting in a 1.15% bank CD but have no time, desire, or skills to earn a higher rate of return by having a rental property. We create win/win/win situations because I get another property, my partner gets a higher rate of return without having to deal with tenants and toilets, and the neighborhood gets another cleaned up rental that makes the other houses look better and a quality tenant to live there instead squatters. My point is that yes, trying to buy a house $800 at a time is hard, but there are ways to do it with little of your own cash. The problem is that a lot of people have developed the mindset that if it doesn't fall into their lap they're not going to bother trying. There are opportunities available for those that can see them.

b. I agree 100%. Every one of my tenants has a bigger television than I ever will, but that's why they'll always be tenants. Your priorities definitely have to be straight in order to get ahead.

I've seen enough tenants come and go to know that not *everyone* will choose to live off of passive income, but there's more opportunities than people think. My partner loans me money to buy a house and they get passive income from the interest. I get passive income from my rental collection and if I'm not buying another house at the time I choose to loan money to another local small business for materials so they can make and sell more widgets.

There will always be worker bees, and I believe the school system partially doesn't teach this stuff because they want to continue the output of worker bees. It reminds me of a story in The Richest Man in Babylon (my favorite financial book) where the king is tired of money paid out from public works projects ending up in the pockets of a few wealthy people because the general population hasn't been taught how to manage money and spends everything. I think I'm doing well compared to others my age, but if I knew then what I know now I think I'd be so much further ahead. I think people should have the opportunity to learn this stuff and they can make their own decision if that's best for them or not. Some people regardless of what you tell them will always choose to be a worker bee. I have heard that there are two types of people: those that will work and those that will let them.

If you get tired of your Roth IRA you might look at converting it to a self-directed IRA. Then you'd really have some control in what you can invest in. A local real estate investor or small business owner might thank you.

[ Post made via Mobile Device ]

[ratherfish]

You forgot the third type.

arrogant young on line financial barrons...

Your "properties" could be worth nothing in days. Better have a back-up, and a back-up tp the back-up.

Meanwhile most are being harmed by the current administration and I guess that's fine with you an kreutz.

Real masters amoung men you smart fellars are.

[ShotgunBlast]

That sounds like something someone in an Occupy rally would say. Does that make me part of the 1%??

[ Post made via Mobile Device ]

[ratherfish]

What's your point?

McCain would have been the same?

I have personally read several books advocating what you discuss and employ many of the ideas. It's not revelation, and frankly not very relevant since Obama's war on the wage earner not only effects W2 income but every aspect of the cost of living. To merely say it would be the same with McCain and not respond to ascertions to the contrary indicate another motive. Now a secondary tactic of the "occupy movement" change the subject and attack, indicates your actual point may soon surface.

Are you an Obama supporter? Are you intending to vote for him? Are you advocating his leadership? Are you disputing the facts in the original post?

If so, say so and defend your position.

As a relevant side issue, I have three children older than you and have endevored to teach them to come to the point. I do however salute your ambition, drive and industry.