Why Americans Are Actually Broke! (2023 Edition)
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- เผยแพร่เมื่อ 27 ก.ย. 2024
- Americans might be bad with money, but you don’t have to be. In this episode, we discuss the underlying reason why Americans are so bad with money and how you can do it better.
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I have no debt. And yet, I feel like I’m broke due to the impact of inflation. Have eliminated most of my discretionary spending.
I feel you, man. It's tough out there, especially for young people.
replay in small segements?
That's sucks abs it's tough for most people these days facing inflation. For you is could be the pay per hour for the reason you struggling or it something else. The reason I say this because that was my situation last year struggling paying everything until I job hop to three jobs now paying alot better and even invest the money for the future
Sounds like your income needs to increase to match or beat inflation
Maybe an income/spending problem?
Maybe I'm different, but inflation hasn't affected us much at all. Sure, groceries are higher and so is gas. However, it's not making a difference in our standard of living or our investment strategy.
Yes you might say that but More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire without any investment. Retirement becomes truly fulfilling when you possess two essential elements: financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement. .
Incredible. I believe in investing and working because I love luxury . when a buddy of mine recommended me to a financial advisor. We spoke about investments and money. I began investing with $120,000, and after two months, the value of my portfolio was $314,800. You think this is crazy, but I choose to reinvest my profit and become more intriguing. We have been working together for more than 10 years, consistently turning a profit. a year ago, opened my first restaurant and bought myself a brand new car last week.
@@Pamcheryl That's quite remarkable! I'm genuinely interested in benefiting from the guidance of such experienced advisors, especially considering the current state of my struggling portfolio. May I know the names of the advisors who has been assisting you in navigating these financial challenges?
@@BEAUTIFULDIANAFRANCIS Cynthia Alexandra Jackson is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
“Cynthia Alexandra Jackson” a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
This country is two paychecks away from everyone just eating each other. We have no actual idea how bad it is out there, and people are willingly going into crazy amounts of debt for absolutely no reason.
Credit dependency coupled with id-and-ego-driven violence/greed/entitlement/jealousy/fear/loathing. Basically, it is what it is, a juvenile delinquent of a country. But that can be said of all of humanity. So..........🤷♂🙏
Government encourages the debt because without it, the country will fail. Our economics force the taxpaying citizens to spend like crazy and then rely on the gov to help them. Bigger gov to support our dependent nature in this country.
No reason? It's because basic costs like housing, education, daycare, and health care have reason while wages have been stagnant since 1980.
That's a big reason why the birth rate in the US is plummeting: children are too expensive to raise.
@@AxelQC no, the birthrate in the US is plummeting because the powers that be have spent 60 years convincing women that being wives and mothers is the worst fate that could befall them, and they believe it now! Women HATE men now. WAKE UP!
@@bobknob8440 Therefore, GDP means very little. Better gauge is gross export.
I don't hear health care or medical costs/bills mentioned. This is a BIG reason for being BROKE in the US. :/
Cuz ppl in other countries don't get sick
I read that medical bills are the number one cause of bankruptcy in the US. But conservatives and Republicans will never talk about this. They'd rather fight against health care for all while cutting taxes for the wealthy and corporations.
This is true in some cases, but in many cases people spend too much on non essentials such as flashy cars etc. Leaving them without the margin needed to cover such emergency bills.
Yes , there is a lot of money in the US but the very few are hogging it all with the assistance of corrupt politicians who make laws and regulations and bail outs so the rich get richer and the poor get poorer.
@@wonderingthoughts926 This is true in some cases buying a car is not likely you to bankrupt you like medical bills.
I was a cook for 2 years in my early 20's. Now that skill I use at home and save oodles of money without sacrificing quality . I taught all my kids to do the same
Nice! I took it upon myself to learn, thankfully TH-cam provides the foundation that I built on.
Same for basic maintenance on our cars, as well as mixing good cocktails at home. Not to brag too much, but now when we do go out my wife and I are usually disappointed by the drinks because I can mix better at home 😅
This is scary. Rich people pay politicians to make sure they get access to taxpayer funds first when banks shutter or they're in jeopardy of losing all their money. I feel bad for the lowest paid workers that may be affected, but not CEO's. A lot of them have created this abusive corporate pay structure where they are paid 300 to 400 percent above the salary of entry level workers. Most add very little value. They posture and perform with speeches, meetings, and excessive travel to provide the appearance of working hard. It's a con.
Very big con and that is why i have always maintained that people should never have their money in the bank! Get a financial advisor and even make so much more while saving!
the rich control the world, put that in your thick head.
Rich people pay politicians to stay rich or keep what they have.
You should become a CEO since it's a con and any moron could do it
Saying most CEOs add very little value is just crazy lol.
And divide those CEO salaries by the number of employees at the company and see how much they're actually costing their employees. You'll be surprised
Yes - looking back, my parents did a pretty good job of masking the kids in my family from the reality that we didn’t have much money! I was the first child in my family to go to college, and qualified for Pell Grants to do so. It wasn’t until much later in life that I realized you don’t qualify for Pell Grants unless you’re on the lower end of the economic spectrum!
Social media is the arch-enemy of financial sanity! My wife falls every time for the latest “FakeBook” post that shows one of her friends with a new car or on a fancy vacation! I know most of these people, and unless mommy and daddy are paying for the trip, the only way they can afford a lot of this stuff is because they are making a choice between “living for today” at the expense of their future financial security……..😐
I agree! And in fact, I remember them teaching me ‘never talk about your $’
Social media is definitely a huge culprit for so many people. Growing up, my family was upper middle class. But my parents consistently lived below their means, their mortgage was their only debt, and my dad never missed a chance to remind my brother and me that having a lot of “stuff” doesn’t mean someone has a lot of money. I understood the lesson, but I don’t think I comprehended the huge impact of regularly hearing it from a young age, until I was in my late 20’s and started to observe a broad variety of financial habits within my social and work circles. My money habits still aren’t perfect, but I don’t feel the need to buy status symbols and I’m not influenced by how other people spend their money.
@@vanessaf7259 - That attitude will serve you well long term! We all have financial weaknesses, but overall if we spend less than we make an invest the difference there’s no reason anyone living in a country with so many opportunities shouldn’t do well…….👍
Are you my older brother? Seriously, similar stories. Although we weren't masked that perfect from not having much money. We got the free lunches at school, qualified for WIC and got some small county jobs where us kids did some minor work and parents got some money. First kid of six to go through college got loads of free government money. I was the fourth but got the most academic scholarships while some other members got some athletic ones. We all made it through without nearly the average debt of a college kid today. Two had zero debt and two had less than $10k each. The other two were girls, higher spending, but still had only about $20k. All private colleges too. It can be done.
I know 3 couples/families just off the top of my head that have modest incomes but are in debt because of 2-3 cars that are above average price, supporting dogs, going on tropical vacations yearly, going out to eat often or ordering in and buying clothes each new season to look trendy...so that's why I don't buy the excuses that it's near impossible to save money, people choose to live in denial and to compete with each other for social points.
Exactly, you buy things that you don’t need with money you don’t have to impress people you don’t like
Yep. I work at a credit union and I see this all the time!! It’s an overspending / buying items you can’t afford problem most of the time.
@@melissaguevara724 I’ve been trying to live frugally and I have more gym memberships than anything, theirs most of my entertainment
My Ford Escape is 18 years old still gets me where I need to go
Yes! Every time I ask my husband how can “so and so” afford all that stuff, he replies that there is wealth and there is the appearance of wealth.
I was never a spender, but one thing this pandemic taught me was that I can have a good life on even less. I hardly buy anything anymore unless it runs or wears out. This isn't because I am trying to be extra frugal (but it's a perk), it's because I don't care that people think I should get a new car or more stylish clothes. I haven't bought a pair of shoes/clothes since before the pandemic started, now I am wearing everything that has been stagnating in my closet. It feels awesome! Plus because I'm not spending I can up my contributions and investments!
👋👍
Exactly, I ain’t bought new clothes until I have to and any friends that care about my clothing don’t care about me
I can’t tell if I’m the one who’s normal and everyone else is brainwashed to want things or if I’m not normal and other people genuinely want things.
I don’t buy stuff because I don’t want anything because I don’t really need anything
@@SuperT I’m the same way, If it isn’t something I need for one ways to express myself authentically and sincerely it doesn’t matter, also I believe it’s bad for the soul to be able to buy everything you want but can’t truly afford what one needs
I only spend for food and travel; that's it. I contribute every single paycheck. No excuses
We're a two income family of four- its absurd what things cost. Even thrift shops are raising their prices. As a business owner, my health insurance is more than my mortgage. The cost of leasing my mediocre, non-luxury Subaru Imprezza has trippled over 3 years. Groceries for my family of four are more than my mortgage. We don't buy "extras". My car insurance went up, just because.
I'm not sure how I'm supposed to save when the cost of basic necessities are skyrocketing every year.
The middle class is disappearing did you see that report ? Most of the time the middle class is too busy working 60 + hours to pay attention at our surroundings this allows the politicians and big tech to steal with out us noticing.
Between the two incomes, are you keeping track of every dollar that is being spent? If you want to save, you have to shop around. That means shopping around every year on car insurance if you feel that you are paying too much, shop around for a different internet service/cable bill and the cell phone bill, etc. In order to survive, do your homework.
@@letmehelpyou470o they’re not keeping a tight budget and tracking g all spending otherwise you wouldn’t get the woe is me attitude.
Oh, and they’re leasing 😂
You can feed a family of 4 a healthy home cooked food for 400 a month or under e ven in AK and HI...no way your mortgage is that low.
You should also stop leasing your car and look for a used car to buy outright!
Gen X also. I didn’t know until I was 16 my dad was a multi millionaire. I had an economic project in school and when we started taking about business it hit me. My parents had their house paid off the year I graduated HS. They were 41. My dad retired at 58 years. I’m trying and have wonderful role models but I can say I’m definitely behind them. Not doing bad but not doing as well as they did.
Please consider creating a homeschool high school course! I would love it for my kids. Or even just one episode with the basics s directed toward them that I could have them watch would be great.
Every episode is the “basics”. It’s not rocket science
@@williamforsythe9180 even rocket scientists go into bad debt
@@williamforsythe9180 🤓🤓🤓
@@williamforsythe9180 I drive a Maserati. Keyboard warrior style.
@@williamforsythe9180 I was BSing. I drive a work vehicle and can't actually afford one today.
Loved the statement "You own your time". I started saving and investing early. Retired at 55. Now I am on nobody's schedule but my own.
good for you! enjoy!
I always laugh when I hear people say many wealthy people don’t drive nice cars. I live around some of the wealthiest people in the country. Despite what these financial people say, the majority of them aren’t out here rolling in Corollas or Hyundais. Many or most of them either have high-end, luxury cars like BMW, Audi, etc. or a Prius/Tesla as they are the flex among the wealthy and environmentally conscious. They still like to drive nice cars, but the difference is that their cars are PAID OFF or leased for business tax purposes. Either way, they aren’t out here taking out car notes of $1,000 for 84 months. It’s totally OK to want to own nice things-as long as you don’t destroy your finances getting there.
Nice cars also hold their value better than cheap cars
@@tammyturowski6703show me an example of this? Most luxury vehicles lose initially value much faster than economy cars. That used Ferrari may cost "only" $25,000 but it was $250k new and the oil change is $1200, new brakes are $5000.
That Corolla may have lost its value down to $5000 but it only cost $25,000 and the oil change is $50 and new brakes are $400.
The lower upper class consists of some of the most frugal people and some of the most extravagant spenders. The frugal ones will have a comfortable retirement. The others will struggle.
Yes ONCE you're wealthy you're free to splurge. Also you're not considering that these people may just have high incomes and are living close to pay check to pay check just on a higher income.
The US also ranks #47 on the wealth equality index - one spot above Haiti. We rank #20 on the cost of living index, 27 places higher. If you are doing well here, there is no excuse. If you are doing poorly here, then it is hard to deal with the double whammy of wealth inequality and high cost of living.
Wealth equality or income equality?
Wealth equality is based on how people choose to spend their money (mostly, I.e. do they invest it or spend it) whereas income equality is about money coming in, I.e. what you use to build wealth.
What the income equality stats for the could tries you mentioned?
Because if people are making lots of money but not saving any of it (the savings rate they mentioned) then the wealth equality of the usa has little to do with their income equality, I.e. the wealth busing potential
Americans are big consumers! We want everything and wantit now!!We have very poor financial knowledge!
With changes in the economy leading to instability in the stock market, some individuals may face a decrease in their investments in an effort to benefit from the current market conditions, I am considering liquidating my $725k portfolio consisting of bonds and stocks. Someone else in the same situation? Please tell me in the comments!..
would suggest you thoroughly evaluate the companies you have invested in and their estimated future performance, as we may expect to see the market decline further. To minimize stress and improve efficiency, it might be wise to seek the assistance of an investment advisor to help restructure your portfolio and identify any underperforming investments to offset. This approach has been successful for me and has reduced my stress levels.
I have been exploring the possibility of utilizing advisors to help navigate the stock market during these uncertain times. However, I am still evaluating their potential effectiveness in providing the support I need.
@@AllisonSherman7
@@MaryTongx Christy Vallen D'souza is an esteemed coach known for her proficiency in her area of expertise. You probably might have come across her. I found her on a CNBC interview where she was featured and i reached out to her afterwards. She has since provided entry and exit points on the securities I focus on. You can carry out a quick internet research on her name for more info. I basically follow her market moves and haven’t regretted doing so...
I went to an event today and everyone drove what looked like a new luxury car. I couldn't help but feel behind. It made me want to make more money. These days financial independence is the luxury I'm pursuing. I want to be wealthy before I look wealthy.
I wouldn’t feel “behind”. You don’t know their numbers.
Remember, you always see other peoples expenses, but you never see their wealth.
I don't want to look wealthy (I am succeeding at that lol). I drive an 11 year old car and don't care what people think (my friends like to tell me that I need a new car). My luxury is having no car payments for the last 8 years and counting. I would never tell anyone how much money we have.
60 years old and this stuff still motivates me!
Great advice. Forty years ago, I actually purchased my first home (a condo) with 1% down, as part of a first time homeowners program. Over 5 years, the appreciation outpaced my ability to save. That allowed me to put 10% down on my next home, which I kept for ~5 years, once again benefitting from the appreciation. On my 3rd home, I was able to put 20% down, just from the appreciation on the previous homes.
Did you go to a 15yr and pay if off?
@@mrjuvy49 Yes (15y), and no (pay off), doesn't make sense at 3% interest.
You must live in a different market than me! Here in Houston, I purchased the home I currently live in back in 2002 and it really didn’t start escalating much in value until the last five years or so. As a child of the 70’s, who watched some of my older siblings enjoy some pretty hefty appreciation in their home values (also a different market - Minneapolis) I was a little miffed about how my home wasn’t the same economic engine for me……..🫤
@@ddellwo Perhaps we've been lucky in that regard. We purchased our current house 6 years ago and the value has increased by 50%.
In a Houston suburb since 2001 price is up about 2.5 times.
I LOVED the segment on the rising cost of housing and transportation vs stagnant wages. The show is often so positive and optimistic, but please please please do more content about how objectively hard it is to be successful financially starting out today, and what you CAN do about it
Stagnant would not be the word I would have used. Wage are raising, just not as fast as goods and services. Maybe goods and services are outpacing wages.
@@TheAdam36830 I tend to view things in inflation adjusted terms, and US wages have absolutely stagnated in recent years in terms of spending power. That being said, yes, you're right, wages are rising in nominal terms, just not as fast as other things!
Well what people see is that wages haven't "increased" but the average full-time American makes $75k a year which in most of the country is more than enough money. The problem lies in people attempting to make that money while living in NYC or LA on $75k. I've met people who make $200k a year and struggle financially because they live in an expensive area. This "wages" haven't increased to me is an excuse to not suceed since it isn't my fault the system just sucks. The jobs exist, the pay exists people just need to drop the entitlement and make themselves worth the higher salaries. (Not saying that this is you, but that is my frustration over that topic) 😅
@@IntusMortuum well first off, I believe that's the median household income not the median individual. But regardless, I'm not sure I understand your frustration. Sure, wages are higher in the US than most parts of the world, but cost of living is also higher. And telling people to just find higher paying work doesn't really make sense; most people can't have above the median income, by definition. I know the jobs exist, I personally make above the median income, but the jobs that don't make median income also need to be done by someone, and those should be livable wages too
Wages rise faster than the price of goods. Wage deflation is a myth. It’s impossible for prices to rise with lower wages.
I think the only thing I don't agree is 25% of gross income = housing. Generally speaking most people live around major cities, in these cities and their nearby area aren't exactly cheap, 25% of their income get their the most dangerous neighborhood where safety is a concern and these housing price often don't go higher.
@@ilsa_xo I only this only applies to people who are working in major cities. To get under 30% of gross income for rent, I bet the solution is 3+ hour commute, or sharing 3-4 bedroom apt with 1 bathroom, and a guy sleeping on the couch. lol.
I don't even try to keep up with my friends. They can't possibly afford all the luxuries they purchase. It feels like 2006.
This stuff has to be mandatory senior year of high school. The best classes I took were Finance I and II my senior year and those were elective classes.
Always encouraging - I’m still in the sub-10 year mark and it feels stagnant most of the time. Definitely won’t stop 💪🏻
I know just how you feel. I just hit year 13 and I can already see the money making money for me. Trust me, you WILL see it start to climb, but boy is it agonizing at the start. Stick with it….you’re winning! 😊
It feels that way for many many years. Be patient. The day will come. One day in the future though, that money starts earning more than you do and it is fantastic!
The numbers these guys are talking about, I could afford a tent and a bicycle. The new American dream.
I never forget what my account said to me 35 years ago...... "It's not how much you make, it's how much you keep in your bank". This wisdom enabled me and my spouse to retire early in life. Pay off all your debt and live within your means, but still enjoy your life.
Just bought a 2021 Toyota Highlander for my growing family, put 60% down and will have it paid off in sub 1-year. Planning on driving it for the next 10 years. Feeling pretty good about those guard rails.
Only 10 years? I have a 2017 new. I will drive it for at least 17 years
Great show! I'm in my mid-50's and I wish I had heard this advice when I was young! I started late but I'm on my way now!
70% of GDP in the US is consumer spending...most aren't saving money because everything bit of marketing is spend, spend, spend. Lots more nuance and complexity to the economy in the US vs other countries. People could save more, but they just don't do it and many do not know any better.
We have a winner here. GDP is a fake number in US and includes services such as Healthcare and banking / financial .
Examples. A company with a spreadsheet and 3 table office in let’s say Connecticut doing trades on Wall Street with a company in NJ , through Wall Street stocks. Both companies bought and sold a Billion $ worth of stocks with net profit of $0. But GDP is $1 Bln.
Another example. Healthcare - the more population is sick the more they spend on drugs etc and the higher is the GDP.
It’s absurd.
@@al4465 Interesting. Could you explain it more because gdp numbers in US always seemed to me overly exaggerated for a economy that grows 2% average.
Buying men’s sports Rolexes is never a bad thing you will always come out ahead. It’s the only thing I’ll actually spend money on otherwise I live like a poor person. They’ll all be given to my child when I leave this earth for them to blow as they see fit. In 5 years the value of my watch collection has appreciated by approximately 250%.
I love this show and have gotten so much out of it. However, citing the United States GDP alongside poor savings rates without mentioning the enormous wage disparity between America's ultra-wealthy class and rest of the country is a huge omission here, in my opinion. Are there things individuals can do to improve their savings rates? Of course! But there are larger systemic issues at play here.
At the end of the day, you can only control the variables that are you in your power to control. I can't change institutions, but I can sure as hell not spend loads of cash on stupid cars and coffee. That is all they are preaching. Plus I don't see how a rich person existing impacts my own ability to save. How is the wage gap preventing you from saving money?
@@dgfreshx Great question! The wage gap prevents working people from saving because working people's incomes have stayed flat (and have for many years) while cost of living and c-level salaries have skyrocketed. When earnings stagnate, saving becomes increasingly difficult.
@@mattlynn464 That still doesn't explain the fact that of the countries they list, only Norway has a higher median income per capita. On top of that, several countries listed (Israel, Denmark, and Norway) have higher costs of living. Ireland and South Korea are nearly identical in terms of cost of living to the US. Several countries earn less money and have higher costs and still save more than the US.
I was thinking the same thing. I don’t know why they would cite GDP. A much more accurate figure would be savings rate in relation to median income.
The ultra wealthy do not earn a wage they own companies and / or assets. When Biden says he's going to help the poor with various hand outs, he needs to print money to do it. This devalues the US dollars and causes inflation. High inflation hurts the poor the most while it drives asset prices higher benefiting the rich!
Be careful when voting for a party that claims it "helps the poor" !!
While I understand the purpose of the show is about individual accountability - as far as I can tell from outside the country, access to 401k is based on your employer setting something up and having options that aren't an absurd MER vs. in Canada anyone with employment income last year can set up an RRSP through a bank/credit union (employers can also set up RRSP matching, but you aren't tied to them doing so). US as a whole is rich, but the economic inequality is bad and widening.
The thing about car payment is different if you can get zero interest rate. My sister got her honda in 2020 july for $14000 and was offered 6 year at 0 rate.
Both US and UK are fed materialistic adverts while also credit card mailouts are bombarding mailboxes. Also the culture about vacations, shopping, dining out, theres a lot of pressure to ‘keep up’ etc
As the head of HR for a financial institution, I’ve realized that there’s not nearly enough retirement saving education for employees who come from financially illiterate families. We have auto enrollment (opting out is easy but very few do) and we make employer matching contributions, which might be leading some of our financially insecure employees to make retirement saving decisions they don’t fully understand. I’ve have quite a few (relative to our headcount) hardship withdrawal requests that don’t actually qualify. And so often, those requests come from the same employees whose biweekly retirement contributions are so big, their net pay has me wondering how they can possibly pay their bills 👀 Saving even $5 a month for retirement is better than nothing. But saving more than you can afford to not touch is just hurting yourself.
In another scenario, an employee had a very difficult time understanding why she couldn’t withdraw 100% of her 401K funds while staying employed. That particularly blew my mind, because she had worked in banking a long time and DID understand how the CDs she sold to customers worked 🤦♀️🤷♀️
Considering diversity quotas, affirmative actions and another nonsense existing nowadays, it's absolutely no surprise that some people working in institutions and taking positions, where actually they shouldn't be even close
UK has same issues but with lower wages, probably why the savings rate is lower 😕
Associates degree was paid for by my job. Took community college courses that transferred to my university and was able to cash flow my bachelors in business admin. $7k total spent on my two degrees 🤓
The average housing price has gone up, but so has the size of the houses. Average sqft per resident is up from 370sqft/res in 1980 to 1100sqft/res in 2021.
Well and there are housing restrictions. The majority of people care about the value of their house. I don't because I want an income that can outpace expenses.
Top 5 savings countries and I'm saving more than the national average. I do tend to go a little overboard because I like seeing those numbers go up.
Thinking about ditching my expensive car for a cheaper one that I will buy in cash. I will live next to public transit to get me to work and really want to focus on savings so I can buy an investment property in a few years.
Sounds like an awesome plan! As long as you get from point A to point B, you're good! The only people who care about what car you drive are probably in debt up to their eyeballs with their own giant car loan.
My wife and I drive a 2005 Ford Taurus. Coworkers bud me all the time. However we are only 29 and have over 398k in investments and just under 740k net worth.
I’m 73 and did this for decades. We now have a sizable 6 figure income in retirement and only spend part of the income.
If we compare ourselves to the European savings rates and GDPs , we should also consider that in those countries the bottom 50% of their population shares 20% of the gdp. Our bottom 50% has to split 10%. Also Europeans can give birth for free, have a medical emergency for free, free day care. Think what would happen to the American savings rate if our bottom 50% doubled their share of the nations gdp and didn’t have to pay for healthcare.
Let me see if it checks out what you say for my country.
Giving birth is included in health insurance which you are required to have. So there are no additional costs, no.
Medical emergencies are largely covered, but the first €385 is money you will most likely have to pay. Bills like you see from people in the US are nonexistent for common ailments.
Free day care is just a big fat no. There are subsidies for lower income families, but people complain about the cost of day care a lot.
Day care is not generally free in my country. In some places it is, but in most the cost depends on the parents' income. If they are poor enough the day care might be free, if not, it won't. But it is subsidized and affordable. If it is a good deal in terms of quality for the money is a whole other question, though.
It's not free. It's paid for with taxes
@@jsebby2284 You really think people are not aware of the difference? It is just being a bit of laziness in expressing oneself...
@tanbivo9424 I genuinely think that yes. But if that's not the case for you then all good haha.
I still believe it's something that needs to be pointed out if you're just going to use free as an argument though
Not everyone has a choice. I lost my job in 2012 and was put on a leave of absence for 1.5 years and was not able to work during that time. Had I went back to work I would have lost 1/2 of my pension. So after sitting on the side lines for that long I wiped out my personal savings. As for my 401k that just slowly got eaten away due to the fact that when I went back to work I was making so much less than I had in the prior 35 years I worked. Medical bill and stuff just kept adding up and by age 62 I had no choice but to take my Social Security. I finally landed a half way decent job but unfortunately I forgot about the 19.5k limit and earned about 33k that year. So now for the past year and a half I have been paying $250 monthly back to SS. In 2012 I was earning about 100k per year and the best I have been able to do is 33k on my best year. Save if you can but avoid living in California on less than 100k per year.
Took all the the 401k out during the pandemic. It was taxed over three years. With that money we bought Real Estate and started our own business in 2021. We have been doing wonderful. We plan to scale on getting more Real Estate until we retire on the money coming in from the cashflow of renting those out. Never looking back to working for a 9-5 paycheck. Make your money work for you. Don't work for money.
Amen. work to become wealthy, dont worry about investing for a retirement, that is a pipe dream for the rare few. a 401K enriches money managers, nothing more. Owning a business is the surest method to financial success. That, or working for the government.
This happens when their ego is more important than financial common sense.
Throwing 8% of your gross income at a car payment is an absolutely horrible financial decision.
Save up and pay cash for an older used car before going into debt for a vehicle.
I make $335K per year. Does your advice apply to me?
@@williamforsythe9180 , I'd still say, yes... he used a percentage, which scales with your income.
@@williamforsythe9180 😂😂😂
This was a really good video. If you can consistently pay yourself first and live below your means, you can survive any financial wave that may come thru.
Proud to be from Denmark. We are required to put atleast 4-5% of gross income into Pension and Employers will typically contribute 7-17% into your Pension Account (higher your salary, less will Employer contribution). But there is always a catch. In Denmark, we dont retire before 69 years of age !!
69 is too close to the grave to enjoy the retirement.
@@tdgdbs1 Ofcourse I’d love to stop working much earlier and 69 is well 69 but humans are living well into their 80s now. Infact Denmark is sure to raise retirement to 70-71 in a few years. I have an option to take retirement 5 years earlier than official retirement and thats what I plan to do.
Are folks 65 and older given new jobs if they find themselves without one?
@@tex346 they have to look for “flex-jobs” where they work fewer hours. They can also collect welfare checks/cheques but that is just enough to have a roof over their heads and eat. Healthcare is free pf course!!
The US has social security that employees and employers have to pay into as well
WIsh more would concentrate on horrible student loan debt. I am called an old man or its a tropism when I tell people to pay for their own college. I worked full time for my undergrad, chose a responsible major, and paid for my Master degrees and doctorate on my own. So not saying higher education is bad, just probably 75% of the majors and/or GPAs are bad and people should not be going into debt for that. Undergrad is not that hard, get off your rear, join the military and/or work your rear off to minimize these life destroying loans colleges try to push on you. Colleges are there to collect money no matter what lies they need to tell 18 year old to do it.
Not everyone tries to keep up with the Joneses. I live on an animal farm in a 1428 square foot house (free and clear, and no debt.) Almost all of our money goes towards necessary expenses to take excellent care of the animals and maintaining the property. I don't know or care who my neighbors are, or what they have. Because the farm is surrounded by forest, we can't see them and they can't see us. We're also not on social media.
You guys are outstanding!!! Thanks!
There are quite a lot of factors here that you're not mentioning that counterintuitively reflect very well on the United States. 1). People are generally not fearful of instability. This is a huge factor when it comes to the need to spend vs save. In fact, I'd venture a guess that one of the biggest reasons that Britain ranks lower than us is due to their National Health Service. I'm by no means endorsing socialized medicine, but it leaves people even more emotionally secure about saving less. 2). The marketing machine in the US is incredibly sophisticated. The only reason the Joneses bought the crap they bought in the first place is because of the marketing. 3). Credit Card culture. We are light years ahead of most European countries when it comes to the broad use of credit cards. I was in Germany a few years ago and many places don't accept credit cards there. When you mix two and three together, you've got a real potion of spending. I was living in Spain as a teenager in 1997. My parents gave me a credit card to help me with expenses and I could barely use it anywhere. Things are of course changing and probably have already advanced since I was most recently in Europe about 7 years ago, but we were way ahead of the curve on that. (Okay that last one doesn't necessarily reflect well on the U.S. unless we get points for business ingenuity.)
This knowledge based on the previous decades figures may prove worthless for the next 30-40 years. This century may be really crazy.
The knowledge you share on this channel is inspiring and empowering people like me. I’m doing well but am learning how I can do better. Thank you!
My favorite video of yours I've watched yet! (and that's saying something, I've probably watched 400 so far). Trying to explain this to anyone in my age group feels impossible! I feel like the effort is pointless among my friends and peers (I'm 26). My husband and I are set to max out his Roth TSP and both of our Roth IRAs, as well as a bit more into my Roth 401k this year! We're in a unique tax situation where a lot of our income is tax-free which is why we're going all into Roth. My dad set up my financial mindset from when I was young (which I then forced into my husband's brain over the last 4 years haha), but watching your videos every day keeps us motivated.
Saving is great, but, in Texas at least, the median income is at 31k and the median house is up to 300k. Your 25% house payments are impossible, even up to 50% won't even cover the mortgage payment on 300k, much less the insurance and utilities. The real solution to wealth is either make 3x the average income, which is statistically impossible for most people or be born 40 years ago and buy a house before everything went to shit.
Yep environmental factors matter. But no one online wants to talk it because it is so hard to change....
Excellent show today!!! I’m really thankful I found your channnel and I’ll be sharing this with friends 🎉
Seems like the answer to this is companies making profit, which is just unpaid labor. Seems like that's what we need to fix.
Teacher here. Cost me $55,000 to get two degrees. Starting salary? $27,000. And they wonder why there is a teacher shortage in this country. Demand a masters degree in my state but won’t pay you a comparable wage to other masters degree professions.
The day you stop comparing yourself to others, that’s the day you’ll become free!
@ 11:39 The latte decisions are a huge deal. The problem with that point is that it doesn’t reach the people it needs to because the latte problem isn’t explained correctly. Lattes are a placeholder for wasteful lifestyle. Have a system set up where you have sustainably priced coffee that you love, and enjoy a nice latte once in a while. Do this in all areas of your life and that’s what turns the latte problem into wealth
Lao Tzu: "When you know you have enough, you are truly wealthy". A quote I live by.
Regarding the disconnect between wage growth and prices, you might perhaps also want to compare GDP per capita and median wage since the 1950. You'll see the disconnect between value added by wage earners and the median wages themselves have started to disconnect in the early 1970's. Over here in Europe, the difference in growth rate between GDP per capita and median wages is on average about 1.25% per year. Doesn't sound like much, but over about 55 years your compensation lags by about 50% with respect to GDP per capita growth.
The assumed rate of return of 10% is a bit high for my taste as it is a very specific time frame and a very specific market index. The average growth rate of nominal global GDP is about 6.3% per year. But still, any average percentage growth is an exponential function. Another lesson we can draw from this: paying attention during math class pays handsomely.
How is the GDP per capita calculated?
I think it would be averaged across the population, which means it will be heavily skewed towards the people at the high end, which is why people use median income instead of average income. Looking at the average income and average GDP might be a better comparison, although I'm sure the people with the most income prefer to not be too obvious about it and it would come under their net worth rather income.
It would be interesting to know what the MEDIAN GDP per person is, maybe this is a better fit with the median wage
I don't like debt, because to me it causes stress, worrying about what if I can't afford something down the road because of a different job making less money or eunning into health problems, plus it would be a bummer to loose something that has several months left of payments. I would love to have some toys but I turn myself off by thinking about insurance, fuel and how many times am I going to use it. If it can be used for multiple purposes than it becomes more appealing. When I need a new truck someday I don't need fancy, just give me a low end model that gets the job done. I would consider a less powerful motorcycle and use it to commute to work to save gas. An atv for trail riding, than to use to plow the driveway or haul a small trailer around the property. If it can't be used to save money or labor than it's hard for me spend the money on something.
All right, now here's where everybody writes in the comment section how they are 5 years old and have $500,000,000 saved, just because they want to get thumbs up and feel better about their pathetic existence where their savings is literally the only good thing about their life.
Great tips here from a millionaire next door. Currently driving my 2008 Honda Civic LX bought new. T shirts & jeans from Walmart. Im a no show, all dough guy living under the radar. I love it. Nobody looks or even bothers me.
Why would you calculate the 25% off your gross income versus your actual take home pay? After taxes, 401k, and costs of medical/dental/vision is removed my actual take home pay is a lot less then my gross pay.
Yeah I don't get it either.
Why delay gratification when there are so many ways to get what you're really after for an affordable price point that are actually better? Who wants a high dollar super car when there's so many more reliable fun alternatives? A used corvette with 50K miles is less than a new Toyota Corolla and can provide years of fun without the hassles of a Ferrari or it's brethren. You'll still get the fun of cruising and banging through the gears on a twisting winding roadway.
These days a breakfast out for my wife and I with waffles, eggs and bacon is $40 with tax and tip. Why do that when I make the best waffles from scratch and everything else for $2/serving?
Imagine a mansion or yacht and all that entails. You'd need a fleet of staff for both and with that comes a stunning loss of privacy as well as the expense. Not to mention how little time you'll get to spend with both earning enough to pay for everything. How many abandoned mansions are there after just a generation or two because they're unsustainable? No thanks!
Dave Ramsey had a great example how compounding savings works and why not that much happens at the beginning. He says think of an ice cube in a 25 degree room where you increase the temperature 1 degree at a time. From 25 to 32 - nothing. 33 and up it starts to melt. The higher (longer) the more it melts (money compounds).
To get over the comparison problem, maybe try calculating your wealth in terms of time, rather than money. I.e. how many months/years can you go without working, based on your current lifestyle/expenses?
Another way to look at it is how long can someone sustain their lifestyle? Among the group of millionaires in the room, there will be some who are barely above water and will be facing stress, whereas there will be some in the room who have the same lifestyle but are super relaxed and have peace of mind because they know they can comfortably sustain their lifestyle no matter what happens, because they are not overextending themselves.
It's like someone buying a lambo who has spent a fraction of their wealth on it, versus someone who put everything they have into it, and have next to nothing left.
Great show
I don't understand the pain regarding cars. My net worth is $3M and I drive a Honda Civic. Yes! I owned a BMW. Drove it for 20 years until the wheels almost fell off.
I couldn’t afford to save until I was 30 but now happily retired, no debt, large net worth.
Gr8 job. 👊🏻
When your passive investments become the #1 earner in the household, you have made it!
Excellent book to read on this topic is “The Wealthy Barber” by David Chilton.
In school, we knew who had money and who didnt. The poor kids were always ranked on for wearing KMart clothes.
Or had very different priorities.
It's very simple, pay yourself first when you get paid. That is, if you have a 401k or 403b take out the company match every paycheck and live on the rest. You get the 100% company match and will build wealth quickly. And, every year you get a raise, raise your contribution to your account by 1%. and years later you will be a millionaire or higher. You need 10 to 15 times your last annual salary in your retirement account in order to retire "comfortably".
Right now if you put down a smaller amount of a down payment you can actually save 1% on the mortgage interest rate and of course incur the private mortgage insurance. However, . The next month you can take the rest of the down payment that you were going to make and pay it on the mortgage which would change the loan to value down to 80% and your private mortgage insurance would drop off but you could keep your 1% mortgage interest rate savings in place
Had no capital and barely any savings ( les then a month worth of expenses ). In les then a year I've accumulated 20,000 cad$ + in capital and now the objective will be to cumulate cash to build a pool of liquid cash savings of half of the capital. As the capital grows by it self I'll maintain a balance of 25-50 % between both. ps : Despite the market's volatility still managed to be profitable. Learning the basics of evaluation and metrics and the meanings of many terms was one of the factors that allowed me to understand better what I was buying and also have an idea what to do with these investments. Plus the fact that these investments are tax free...was a no brainer.
Being born and raised to be a spender In this heavily influenced capitalism country is the reason why. I am from a developing country and we don't rely on government nor 401k. WE SAVE every cent we make.
If this includes saying rates for pension the UK would be a minimum of 8% by law but I would guess in over 10%.
Best time to start investing is today and the second best time is tomorrow.
Notice that a lot of the top saving countries have socialized healthcare. Higher taxes but no premiums, deductibles, extra expenses.
Scary number. My wife and I are close to 30% savings and that is probably too low. We are millennials, but on the older end. I have never touched my 401k, or either my traditional or Roth IRAs. I have three layers of emergency fund in several brokerage accounts. We have cash and high income fund in the 1st layer, Index funds and ETFs in the 2nd layer and individual stocks in the 3rd. I did have to scratch the 1st layer this year after a series of car issues, but have a plan to restore that amount by early next year and resume growing.
Here is two counter points for your 'wealthiest nation' trope. Most of the gdp is paper valuation and not the base value of goods and tangibles. The national debt makes you practically broke and bankrupt with over 124 % debt to gdp. Total debt is over 700% of gdp. You are not just broke but broke 7 times over. The creditors are beginning to move towards stopping the lending.
Wow. Valuable information.
The tricky part is honestly the shelter/transportation costs. I agree it’s not a coffee problem it’s a Chevy problem.
It’s $3000/month for a 2 bedroom apartment downtown in major cities and people are financing some new vehicles at $1000 a month.
I moved out to a small town 45 minutes from downtown core and rent a 3 bed 2 bath house for that $3000 (I have a family with kid and a dog and value the space) and my car payment is $365 a month for a boring Volkswagen Jetta. Even at these numbers we have to be careful. Young people are putting off families because of this stuff.
The American GDP is big because of consumer spending which is the biggest component of our GDP. The GDP would fall drastically if the savings rate goes up and that's why so much stimulus was pumped during Covid. Catch-22
Great advice as always.
North and South America are American countries 🌎,So technically we are Americans not just the USA 🇺🇲
Instant gratification is good but I’m learning how wonderful delayed gratification is….I have watched my deferred comp grow and grow. Yeah the 30% crash sucked but it’s getting back up there. My plan just with that is $2500 a month for 15 years
💰💰💰💰
Cars: I always buy used and pay cash. I do not leverage any depreciating items.
Where were you guys 30 years ago? I restarted contributing to my 403b at the age of 51.5. I am living on rice without the beans, trying to save for my retirement. But it is tough to save much on my public school teacher salary. I am contributing as much as I can, starting all over again.
It's never too late to start. Even small amounts
AMEN! Money Guys...I made the mistake, waay before I knew better, of TWO 401k loans in the past. For stupid stuff, like pay off credit cards :( But, I was "paying myself interest" which sounded great! Didn't realize, until I educated myself...you pay the loan back with AFTER tax money (so you are already down 20+% depending on your tax rate), and you lose the time that money is in the 401k working as part of your $$ army. Don't do it, people! Don't do it!!!!
Well, when you look at the whole picture, you actually come out ahead taking a 401K loan vs. a regular loan. It's only a bad idea when you use a 401K loan for frivolous things like taking a vacation, buying clothes, etc. It should be used for more important things like buying a house, emergency car repair/purchase, medical, etc. because if you lose your job the full loan is due immediately or else it's counted as a distribution.
Spend less than you make and save the difference to allow for investing.
I just watched an episode of ERIN TALKS MONEY, and she said from a 2022 study that GEN X had the lowest savings rate of all generations, even Z, who has 11 year olds.
Interesting how most of the countries in this list have single payer healthcare. It’s almost as if predatory pharmaceutical and insurance companies is bad for us.
Zero percent interest rates for like a decade might have something to do with our low savings rate.
The three Rolex watches I have purchased over the last six years have appreciated and outperformed the S&P 500 over that same period? Not a bad investment.
The point is, statistically it’s the working class who buys Rolex. Wealthy people don’t feel the need to impress.
@@genxx2724 I find that to be hogwash at it's finest. I've never ever ran into a single person who I would consider "working class" with a Rolex. Anyone I have ever met with one have been more than well off. Working class don't drop 10 plus grand on submariners....
@@theripper121 Sorry you don’t like it. You can look up the study. It’s even been covered on this channel. Cops and firefighters love them and the rank and file are pressured to chip in as a retirement gift. People who feel the need to display status wear them. Wealthy, educated, informed people feel secure from the inside and have nothing to prove.