The 5% Rule | Beating the 95% Statistic
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- เผยแพร่เมื่อ 31 พ.ค. 2024
- 00:00 Intro
01:57 Considerations
03:40 Financial Literacy
06:35 Consumer Driven
07:54 Blueprint
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it's funny because when I started my first job at age 12, my dad showed me his budget and how he was saving for a family trip. Fast forward to today and I've saved 50 times more than he ever did, but it was the one conversation that drove me to saving. I still ask him for advice because I know he has a saving mind.
As a father myself, I appreciate how you still respect him, even though you’ve surpassed him financially. And I appreciate his willingness to be vulnerable and show you his financial reality when you were young so you could learn from his experience. That’s real love on both sides. ❤
My family talked about money all the time...
Let's see, there was:
"Put that down, do you think we're made of money!"
... and...
"Turn off the lights, do you pay the bills here!"
... and.. um.. yeah, that was about it...
🤣
😂😂
I lived like this too.. now I’m the one not saying this in my family.
Don't forget, "Close the door! We're not paying to heat the whole neighborhood!"
I grew up in a house with financially stable parents who did NOT educate their three kids. We did not talk about finances. When I tried to ask questions, I’d be faced with “why do you need to know? Don’t worry about it”. It was so bad, I would sneak peeks at utility bills to get an idea of costs.
My partner gave me my financial independence start. He guided me on how to go about with my money so I would have a credit history, be able to take out loans, how to save, having an emergency fund, etc.
Not educating your kids is NOT helping them. It’s actually setting them up to fail and potentially surround themselves with negative influences. I’m one of the lucky few who found a partner who didn’t take advantage of my lack of knowledge.
You had a rare and wonderful partner… that is wonderful. My family also never talked about money. It was a taboo topic. I know they had good intentions, as they did not want to pass on financial worries on their kids.
When my father retired from the military he landed a job at a bank and over the years he learned about money by observing how those that had money behaved. He brought home stories at the dinner table and the entire family became much more financially literate. Mistakes were made, but the idea that money was something you could manage rationally was much better than how my parents behaved before the banking job.
I wish I could be at that table!
I love financial stories!
Financial education and knowledge is everything. Good for your dad learning and sharing.
I want to retire from the military but it's so miserable and ludicrous now. I'm an E-6 now and been in for 9 years.
@@PriinsuI retired from the military as a Staff Sergeant. I had 10.5 years time in grade. The military was downsizing in the late 90s. I was lucky to get to 20. I’m living off my retirement pay right now. My SS starts this month. Also, the company I worked for afterwards had a 6% match to the 401K. Barring any medical emergencies, I should be ok.
I used to work for a bank too and spent my first 5 years in branches. Seeing how other people handled their finances was very eye opening and definitely a good education in what not to do.
My mom was the financial wizard in the family. She obtained her GED when in her 40's too. she taught us hoe to manage money and what was important. "You want that bicycle?". "You can go shovel snow and make $5 per driveway. I'll hold $4 of that and put it towards the bike." Life's lessons learned well. I retired at 52 because of those lessons. Thank you mom!
I’m 53, so I’m older than you are, but I was taught some personal finance when I was in high school in the 1980’s. Before I could graduate I was required to put together a budget and submit it to my history teacher. If any student didn’t submit that budget to that one teacher s/he didn’t graduate. It was a requirement for graduation. Things have gone backwards since then.
Pay compound interest and make someone else wealthy. Earn compound interest and make yourself wealthy. Once a person realizes that we have been conditioned to spend and can break out of the cycle of spending it all, life becomes very manageable.
That's a scary statistic, Thanks, Erin! Growing up until the day I left my parent's home at 18 my dad made me save 50% of everything I earned, at 20 I purchased a 33K condo that jumpstarted me financially as I always had a place to live without rent. Thanks, Dad.
That is awesome!
Your dad deserves his own holiday
Awesome! I also did that (as a father myself), and I haven’t met anyone else who had kids do 50% savings. After working to earn their own money, starting as early as neighbors would hire them to shovel snow and babysit, my kids all left home with a meaningful stash of funds-and more importantly with a saving habit and a sense of self control and ability to sacrifice for the future. I wanted them to start with some knowledge that took me a little longer to learn. I’m so proud of them and happy for them!
Scarcity mindset is paramount. My parents did a good job with me to get that across but without ‘burdening’ me with too much info on heavy financial planning. Even though my dad was a financial advisor. I have always been decent with money overall but learnt the bulk of investing strategies off my own steam later in life, so I guess my background was mixed. I aim to give my kids a solid footing and will trust them with a lot more info than I was given
The quote is from The Strangest Secret by Earl Nightingale.
Thank you!
This only mentions 95%, but pretty sure all the numbers are on one of his audios. www.google.com/search?q=earl+nightingale+quote+on+95%25+broke&client=ms-android-verizon-us-rvc3&sca_esv=1eabc25c83938f11&sca_upv=1&sxsrf=ACQVn0_I6Aaieo2nLdhpbaiR5czGz3pssg%3A1713843580038&ei=fC0nZp67AYas5NoPoYyMiAY&oq=earl+nightingale+quote+on+95%25+broke&gs_lp=EhNtb2JpbGUtZ3dzLXdpei1zZXJwIiNlYXJsIG5pZ2h0aW5nYWxlIHF1b3RlIG9uIDk1JSBicm9rZTIFECEYoAEyBRAhGKABMgUQIRigATIFECEYoAFIp-MBUNURWKbaAXAEeAGQAQCYAeMBoAH5JqoBBjUuMzAuMbgBA8gBAPgBAZgCKKACqCqoAg_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&sclient=mobile-gws-wiz-serp#fpstate=ive&vld=cid:c39a3482,vid:YgNOSESO-O8,st:0
Listen to the “ strangest secret “ a true Gem !!!!
I had a physically and verbally abusive father. Became my early life goal to never be financially dependent on him. Left him in the rearview and never looked back.
Your question as to the origins of anyone's financial literacy resonated, Erin. Growing up, my mother was treasurer of a small credit union attached to a labour union to which my father belonged in our company town. She issued loans and met with members in an office she created in a spare room in our house, and convened annual general meetings. Today, 50 years later, she is a volunteer tax preparer for low-income people and seniors. My father was not that interested in money, but in her unassuming way, she has inspired my interest in personal finance, and my own "hobby" of managing retirement accounts for a number of family members and friends.
Interesting story about your family and money. In mine my parents never talked about money. So when we started making real money, we hire a financial management firm. They, and I think many financial managers where good at doing trades and generating fees for themselves. However, in 20 years the balance rose only 20%. This was at the same time the money we managed ourselves via stocks (with dividend reinvestments) and other investments grew over 10X. No more money managers for us.
I'm no economist, but I don't think a society could survive if 95% of the population was broke or dead
Touché . What they did is... The number was right , but their interpretation is dead wrong.
This 95% thing is based on 100 people ... The real question is do we get the same results if we take 500-1000 people ? 🙂
The population grew from much smaller numbers to where we are today. It would likely bifurcate more like it was when the population was smaller. Think the Middle Ages or birth of Christ.
Fortunately our current president is testing your hypothesis and we will soon see.
You are 100% correct on how simple a personal save/invest plan can be, I’ve watched hundreds of financial videos and read books on personal finance and my conclusion is in harmony with this advice, I don’t use fancy spreadsheets, don’t pay financial advisors, don’t live by a budget, we keep it simple and enjoy life free from most financial worries (folks will always worry a little that’s being human) and enjoy our financial freedom!
Same for me - just like Erin said - keep it simple! It’s boring compared to bitcoin or meme stocks, but it works in a nice consistent way which suits me 👍😜
My grandparents saved “till it hurt” according to my Mom. They retired early and lived comfortably but didn’t pass on much in the way of lessons learned other than “live beneath your means.” Learned allot on my own and started investing early. Also, joined the military out of highschool and retired after 28 years. I don’t consider us “rich” but we are quite comfortable and can afford to do most anything we would want to do. We do talk to our kids about money and the importance of starting early with investing and taking advantage of 401k matches and any available retirement programs. It really does pay off down the line!
My dad was quite similar to yours.. can’t remember how many times he started the next visionary business .. and failed. Luckily, my mom had her own mom who survived the Depression and had to be financially independent. They both taught me to take charge of my own financial fate.
I took my first accounting class in high school and that is where I learned about money. I got my associates degree in accounting at twenty one and then graduated with my Bachelor’s of Accounting in 2010. I definitely did not spend like my peers. It’s paid off in the long run.
Erin love the video
The 5% I heard from an Life Insurance salesman when i was 10 , that scarred me into saving and living below my means. Now at 70 I'm FI and still investing
Raised by common sense survivors of the 30s great depression. They used a savings account at the local bank. I of course revolted and lived a YOLO lifestyle for about 15 years. Woke up late in the game. Thankfully I did not adopt a fear of the stock market. Had to save 55% to retire in the double comma club. If we can do it so can too. Intentionality is a powerful thing.
I had to learn most things about saving and investing on my own. The extent of my parents' advice was "pay yourself first," but I was well into adulthood before I learned what an emergency fund is supposed to be. My dad's take on debt was really bad and did not set me up for success when I was younger. But, at the end of the day, they did the best they could with what they knew/understood, and it's correct to say that you have to take responsibility for your own money either way.
My family never talked about money but I picked up on the stress from my parents as they lived paycheck to paycheck. It scared me enough to become an extreme saver. It was my wife who started investing in mutual funds. She always had an interest in investing. The drive to save and investing those savings let us retire early - very comfortably.
Erin, got some thoughts on this one. First, IMO, I think the number of people that have some level of financial security is probably closer to 20% than 5%, which is sort of alluded to in the 78% number living paycheck to paycheck. Second, I dislike the phrase "the odds are stacked against you." I believe that most of us have the ability to achieve financial stability, even wealth, but as you've pointed out many times, IT'S A LONG GAME. If people follow plans similar to the one you laid out, darn near by definition they'll be in that financial secure region. So the problem isn't one of "the odds", but of our behavior.
Also, as you point out, most successful plans are painfully, embarrassingly, simple. They also succeed.
Another great segment, thanks!
Understand your viewpoint, but I'm good with "the odds are stacked against you", cause they ARE. Yes, IF you're financially literate and disciplined, it's actually quite achievable to lump yourself with the 5%. But most aren't aware, and waste years swimming against the tide, a tide of their own making! Overconsumption, keeping up with the Jones', accumulating debt that has the ever increasing drag of compound interest, they're not only losing valuable time to save and grow their nest egg, they're getting themselves farther and farther away from ground zero, no debt. If you waste five years before becoming aware and buckling down, then it's probably another three years just to climb back to zero. That's eight years, down the drain. Eight more years at the end is a POWERFUL compounding effect to lose! That's literally potentially 40-50% of your nest egg, if you look at exponential growth.
That’s a great point, and would very much be a better phrasing. you’re 100%, it’s a definitely a long game!
Really awesome you did the legwork to research that quote/statistic you'd heard! It's so valuable to think critically about these things and dig deeper, not just about finances but really everything else including the "statistics" trotted out in arguments for and against!
So true!
Erin, your videos are excellent. Thank you.
Thank you!
Erin this was a great discussion and your remarks were spot on IMO. When I grew up there was no discussion on finances at all. We lived a low middle class live in a home my father built himself after WWII. My parents were fugal and my dad was the sole wage earner as a police officer. My mom got polio right after I was born so she was unable to work. The only exposure to finance I ever received was after I started working at 15, yep, still in HS and had to get a permit to do so. I don't remember if it was my mom or day who showed me the envelop system. Identified on the envelop was the amount or % of pay that went into each for the designated purpose. That lesson stuck and I was never without money for what I wanted to do or needed. I am self taught on all my financial knowledge. You are absolutely right when you say it is easy to reach the 5% mark but few people do. It is very sad but most make excuses why they can't do it, how for their generation it's more difficult because, when it all comes down to they don't know, or won't do it. Sadly, financial literacy is still not part of our education system, regardless of level. I have exposed my children and grandchildren to budgeting, finances etc and they are all doing well. I appreciate your content and the amount of time and effort you put into it. I am retired 13 years, enjoying my passions, family and living a good life. I'm certian you are impacting many people with your content Erin, keep up the great work! Larry, Central Valley, Ca.
Thanks Larry! If only people could learn from a young age, it would be such a simple path to wealth. I’m so glad you were able to walk that road!
My exposure to finance was two items: an allowance from my mother and a savings account from my grandparents. I enjoyed watching my money and savings grow.
That quote is from Earl Nightingale’s The Strangest Secret
Another great video - makes you think!
Your commentary is true to most homes today and in the past! Finally in Michigan, personnel finance is required in our school system but at least it's a start...My parents were like yours, so I learned the hard way!!!
Michigan was my home state! This makes me really happy to hear!
Listen to Earl Nightingale's "The Strangest Secret." I believe that quote, or one very similar, is on there. Great stuff!!!
Thank you!!!
Is it possible to contact Earl Nightingale, to ask him about the quote?
@@robertewalt7789 The Strangest Secret was first published in 1956. Earl Nightingale passed in 1989.
Great video!! I love sharing your videos with my classmates. The one we reference often is the $1 per use rule
(Like using a $200 blender 200 times) in one of your older videos.
Thanks for sharing Tray! 😊
I wish I had better financial literacy as a youngster (should be taught in school), but still figured it out in time to find those rules on my own... except I invest 30%.
I got tired of listening to music on the radio one night and started listening to talk radio Clark Howard was the first then Dave Ramsey, thank God I got tired of listening to music.
Music charms your ears, money charms your head.
'you have to take responsbility for understanding your money' that was probably the core mantra that got me to 3%
Excellent video.
Very interesting topic and evaluation! I certainly dispute the stats. If 36 were deceased, I would expect their life insurance would afford more than 5% to be financially secure. I consider myself blessed to be in the top 5%. It enables me to serve 70 families ( the bottom 54%) in my town at a food bank this morning. Oddly enough, those people all seem to be quite happy.
I’m so glad you serve so many 💙
Erin is right!!
2nd generation Dave Ramsey. Parents taught me his principles in high school in the late 90s. One of the best things they ever taught me.
Keep up the good work! We made FI years ago, but continue to work. I wish everyone could get to FI and be work optional or job optional. It makes life a whole lot less stressful. You do great spreading the message. Maybe do a spreadsheet video again showing compound interest over time. We have no fears of retirement - except how to fill all the day! It rains .........
Congrats on FI!
My family NEVER talks about money! That caused problem as my parents got older, my father was in hospital No One was paying their bills! My older brother and sister had to step in and take over their finances! They got everything straightened out before it got too bad !
I feel like the story is sadly all too common. I’m glad your siblings were able to get involved!
Always sound advice! I will add, you can even make some mistakes or not save every single year and still come out very well. Life isn’t a straight line, lots of dips and set backs. Stay the course and save more when times are good. Have some cash so you can buy the big dips.
So true!!
At 100 K in income in our retirement using only 80% interest from our annuities and a Net Worth of 1.8 Million our Financial Adviser said we are at 90% tile in wealth (works for us )
Dope video!
Just subscribed.
Great videos.
Welcome to the channel! 🙏😊
I received so much financial training through my career in the USN. I got to see, second hand, good-terrible financial decisions of peers /friends and shipmates.
That’s awesome!
Wow! Ok this 5% stat kinda blows me away!
I think being wealthy is very subjective. Living in Sydney, my very basic run-down old 3 bedroom house is worth AUD2.5 million. That is poverty in Sydney. However, that kind of money in the Philippines would make you very wealthy.
True, but you live in very beautiful place. We loved our visits to Oz.
8:50 My Household Blueprint - Also laughably simple:
20% Federal and State Income Tax
20% Retirement and College (for child not yet college age)
20% Mortgage Principal and Other Debt
20% House Insurance, Property Tax, Health Insurance, Vehicles, Utilities
20% Food, Dining, Travel, everything else.
If all goes to plan, the Mortgage is paid off in 8 more years, my daughter will finish college in 8 years, and I'll retire in 8 years. Looking forward to 2032.
Wonderful plan!!!!
The simple ones are best! Absolutely love it!
@@ErinTalksMoney Thanks. I thought about this as was walking the dog this morning...and it's really - first pay federal and state income tax. Then
25% to more assets
25% to fewer liabilities
This is all in the name of improving my net worth position
...then
50% to the expenses of life - living in the moment without too much fomo, or having a bit of yolo.
I really appreciate you fact-checking the premise/topic you uploaded today. Too many TH-camrs are "grab and go" on quotes without vetting sources.
It's a worthwhile topic even if the statistical premise is substantially off. I'm about 8 years from retirement, and just attended my 40 year class reunion. Over 90% of us are still alive, from what I could figure, and I'd guess in the few short years remaining, we will still have at worst, a 15% mortality rate at age 65/67. If the numbers were that bad, life insurance would be WAAAAY more expensive.
Erin, I appreciate the message and I have pursued it all my working life. But, I do take issue with “it just that simple, you cannot fail”. Unfortunately, there are many many people who just can’t make enough to save a meaningful amount of money. It’s a sad fact of our financial system.
And I guess my point is we should avoid blaming them for this. It causes me angst, since some of these are my own family!
Yes More great videos 😊
Thank you!
well said.......
My mom was great at saving. She taught her kids to pay cash for things. Sadly, I'm the only one who listened.
My siblings have great incomes but finance liabilities/cars etc. I buy assets. Stocks, rental real estate, etc. Now I hear how everything was handed to me. I'm way better off than my parents. So, i just ask my siblings how my mom gave me what she didn't have.
While it is a topic for debate, I think that I can say that I've taught myself a reasonable amount of personal finance theory and have put a good portion of that into practice. Yes, there are holes in my understanding, but I think I have the basics. This really was born out of necessity because we really neglected that aspect of our lives and the clock stops for no man. All this to say I think we will be in a quite decent position when we are both retired but it could have gone sideways with ease based on the direction we were headed. As for investing and saving, let's say that we are not spending about 50% of our income. That is what we are retaining. It is actually surprising how much money we are currently setting aside for our future, at the same time upsetting to think that prior to our great financial wakeup call that money was a mist on the horizon. I think though that some lessons have to be learned the hard way.
I was fortunate to work with a guy who encouraged me ( when I began working with him) to put enough in my 403B to get the employer match and then increase my contribution every year. He also showed me how to invest in real estate.
You were very lucky to know this person and really smart to follow his teachings.
Great video Erin. I agree with your plan completely. I followed a similar plan over the course of my 40+ year work life and retired 2.5 years ago with a high 7 figure net worth. I have one question about your video: are you using the terms “wealthy” and “well-off” generically or as terms of art? If terms of art, what amount do you consider wealthy and what amount do you consider well-off? If you are using net worth, is it individual net worth or household net worth? Thanks for your insights.
I'm not familiar with the phrase "terms of art." What do you mean by that?
That’s a hard one! There’s so much ambiguity in the term. I think it depends (which is an answer most people don’t like 😂) - depends on where you live, depends on what your goals are, depends on what you want to do. I think you’re wealthy if you have the money to live the life you want. For someone in a low cost of living area, and a modest lifestyle, that number for wealth is going to hit at a much lower number than say someone in a high cost-of-living area, with very ambitious travel plans.
Was never taught anything about finances. I taught myself about 6 yrs ago at age 49. Got really serious with what little we had. Hubby wants to retire at age 60. In order to do that we're leaving the USA
What countries are you looking into?
It was Portugal 1st but too expensive. Now Thailand !
My father taught me everything about money, budgeting emergency fund, and everything. 50 years old and my house almost paid off and third in the family to be a millionaire. The younger crowd just save invest, and you could do the same to.
Love that!
Picking a like minded life partner is super critical for success in building wealth.
Hello Erin 🙂Thank you for the great videos. Have you changed your diet? or what it is that you are doing? You look great! 😊
Reading the comment section you seem to have a very smart and sensible audience, I guess in a way the people that follow you is a reflection of yourself and that's something you can be proud of. You're a smart young woman and a great communicator.
Thanks so much! And I had a baby a few months ago so I’ve definitely lost weight 😊
@@ErinTalksMoney Hope baby Jameson is doing great too! ♥
I have been working in Actuarial at life insurance companies for 15 years.
The scenario presented explained that the sample population is a group of people starting their career and assessing them into different categories 40 years later. I picture this as a group of 20 year olds living until 60, but I also understand some people start work earlier or later. Using broad distribution assumptions (ie gender, tobacco usage, income levels, etc.) with standard CSO mortality tables, the expected survival rate would be more like 90%-95% depending on when the study was started (historically mortality on population improves over time: so people starting to work today will likely have a better survival rate compared to those who are retiring today).
The assumption that 36% of the population will die by the end of the study seems high. This sounds more like an estimate for how many people are expected to die before reaching age 72, which as Erin assumes would include juvenile mortality plus a later ending age than what I would assume (age 60 vs 72).
If you correlate that with IQ, it would be very interesting to see how big a role IQ is related to financial security or wealth.
There are so many money rules, it might be a fun video to highlight some of the worse ones and explain why you don't like them.
I just ran across the 50/30/20 rule, 50% of your after tax income for needs, 30% for wants, and 20% for savings and investing. As someone who thinks everyone should be striving for FI for their own good, that 30% for wants seems like you're just making your own journey to FI harder. I'd drop that to 10% and up the savings to 40%. When you reach FI, or at least get much closer, then you can ease up and enjoy. 30% from the beginning only makes sure you get into bad habits of confusing wants with needs, and risk your own financial security in the long run.
ohhh - I like that idea!
I have seen this somewhere before Erin. If I find it again I will send the link.
I found it!!🎉It was from Earl Nightingale The Strangest Secret it was on album that’s how old it is.😊
Which TH-cam video are you referring to?
That's you👍
My late mother taught me to save money because she grew up in austere times, but she never taught me how to invest. It was by sheer luck that the company I worked for in the 90's had a 401k plan and I put in only 10% of my paycheck into that plan without really knowing what I was doing. It wasn't until much later in life I learned the basics of investing via Internet and TH-cam, tools which weren't known of or available back then. Nevertheless, that 10% back then has grown into a sizable amount and will definitely help me retire. Younger people today are so lucky to have investment options and knowledge resources so readily available.
It’s astounding how much info is available these days!!
Erin, could do video on Hybrid Pension Annuities as part of Retirement? Good/Bad/meh? I and getting Very Good and Very Bad about same things from different channels in my utube feed? SPIA Or Index Annuities? As part of income stream?
You need to add in watch the investment expenses. Jack Bogle is big on that. In the 80s when I graduated from college, 2% expense fees were the norm
« When work is a pleasure, life is a joy. When work is duty, life is slavery. » - Maxim Gorky
25% of those over 50 have more than US 1 million in assets. Top 10% have more than US 3 million. Basically data from your video. Even the median net worth of those above 50 exceed US250,000. With your social security, I would say Americans on the whole are doing well in retirement.The top 25% are basically millionaires with social security. Phenomenal.
I seem to remember Brian Tracy using this quote here on TH-cam.
Your parents views/habits around money completely mirror my parents!
Live beneath your means and invest the difference. That about sums it up. It's not complicated, which isn't to say that it's easy. But, if you can maintain that discipline, you'll do fine.
Most fortunes are so thoroughly distributed in 2 or 3 generations as to be considered spent by the heirs. The only real middle class asset is a commitment to higher education over multiple generations. I come from 3 rich families. The money was gone before I was born.
Erin, what brokerage firm would you recommend? I am trying to decide between Vanguard and Fidelity.
Depends on your selection criteria.
Living below your means is the key to financial success. It's really that simple. But unfortunately 90 percent of people aren't doing this.
Thank you, thank you, thank you.
Everybody can do this. Hardly anyone does. Then decades later, overwhelmed with fear, deep into a lifestyle of debt and overconsumption, they start the struggle to turn around their bad habits and climb out of debt...
Why start in the middle? Why give capitalism a two decade head start? Capitalism is damn good at this game, you really can't afford to spot it a head start, not even two or three year's worth....
Start early, when you're young and have energy, and still are not completely buried under debt. I always thought of the western civilized landscape as a jungle for the human species, where everyone has to learn how to survive. And most don't. They don't recognize it's not just a consumer's paradise to live out your dreams in, it's really a capitalist jungle designed to keep you distracted, off balance, needing or wanting their products and services. Learn the money game, know your survival depends on it. Or end up working for the man your whole life and blaming everyone else for your lot in life.
My dad read the way to wealth but didn't know how to implement it. I am walking it currently.
most people simply never give their money any serious thought. it's weird to say but it's true. if people put as much time and effort into managing their money as they do watching the NFL, more like 50% of people would be financially free.
I better start saving more.
I now know how people afford their life styles. I was wondering how the hell can they afford that? They were borrowing and spending their retirement today.
It came from a longevity study conducted at Harvard University. They followed the lives of 1974 MBA graduates all Caucasian males for their entire working like. . The study came out in I think 2015 or so.
I think that quote is from earl nightingale
80% of households get only one third of AGI. Forget savings.
Erin, nice plan I am wondering something about your 15%; is it entirely in the stock market? I have been saving money and looking to invest but it makes me nervous having 100% in the market. Problem is, what else does one do with it?
2:20 A person with $150k of investments that is able to safely get 4% on that for 20 years would add about $909 each month to their SS income. I know people do sometimes live past 20 years in retirement, but the CDC has the average lifespan in America at a little more than 76 years of age. This is why I use 20 years taking figures out to the 85 years marker. ....Would you be willing to forego all SS income IF the government would knock of limits on ROTH contributions and allow 60% of your current traditional IRAs to be counted as part of your ROTH account without being taxed on a rollover??
I was immediately suspicious of that quote because there's no way of obtaining that type of data without actually doing a study. They would have to do a retrospective study with a large number of randomly-selected participants and rely on the participant's recall and anecdotes. If such a study exists it would surly be published in a reputable journal and be easier to find.
Lol, of COURSE chat GPT’s response was “sounds like it isn’t the but it’s probably commentary about income inequality”
Nearly all of my aunts and uncles are reliant on social security. With a few exceptions it doesn’t appear there was any attempt to develop an alternative plan.
That is a bad strategy. I hope they have some other assets. SS was never designed to be your complete retirement account and meet all your retirement needs. It was meant to be one part with your investments and savings.
@@JBoy340a agreed. There are many people that never articulate a strategy & this is a default consequence. They’ve been lower working class as long as I’ve known them and now that I’ve grown up into a higher professional class, I can see they are part of these statistics.
@@chemquests glad you have figured it out and are successful!
@@JBoy340a thank you; I appreciate your comment!
Have you been working out? You're looking great!
Thanks! I had a baby a few months ago 😊
@@ErinTalksMoney Congrats! It's nice to have Tricare, isn't it?
Yet a 2021 Gallup poll shows 80% of retirees feel they have enough. That's a major difference from this report saying 95% feeling they don't have enough. I'm going with door #1. www.foxbusiness.com/lifestyle/most-retirees-think-have-enough-money-live-comfortably-vs-non-retirees-gallup-2021
The quote is from The strangest secret in the world by Earl Nightingale th-cam.com/video/l1gXZu1i8TM/w-d-xo.html It is outdated.
So 80% of the people that successfully retired feel like they have enough to retire while the quote and discussion here covers everybody retired, currently working and those still yet to begin working. Those are two very different cases.
@@mikesurel5040 The US has some 70 Million people over 65 with some 19 Million still working. Some work cause they need money, some work because they want to. So, 10 of 70 Million is 14.3% which is nowhere near the quoted number of 54%. One has to ask where this number came from as the stats do not support it.
@@ItsEricAZ that makes sense. And I get that a lot of this is sensationalized to sell books and ads. I just had to question depending on the opinion of 80% of people successfully retired and how far you can extrapolate that out to cover everybody going forward when it has been pretty well documented that a lot of wages have not kept pace with inflation over the past 30 or so years. Not to mention American savings rates are notoriously miniscule. My dad has been asking me for decades about my pension. Pensions are something I have read about in history books.
If I was going to anecdotally ask my friends do you think you will have enough to retire one day I am guessing at most half will say yes? This is just a wild guess and certainly way better than 1 in 20.
I have colleagues in their early and mid 20s that are putting $0 away for retirement. I do not think they understand what that is costing them
❤❤❤
Isn’t from Eral Nightingale
ChatGPT fact check for the win 💪
Good investigation work Erin! I don’t buy those statistics at all.
There are no “odds that are stacked against me”, if I continue investing aggressively I will be set, if not then I won’t be, but odds have nothing to do with it….personal decisions
I hear you!
@@ErinTalksMoney can sound discouraging for some
Its from the strangest secret earl nightengale
Even if I do everything extremely right and well, I might end up dead.
I have read some comments here and else where about stopping SS and allowing them to invest on their own. This got me thinking, if all the money put into SS about 12.6% of everyone's income what would that do to the stock market? I am now reading that many are considering the market is over valued again and that an adjustment needs to happen. Well if $1.1T were to be added to the market this year wouldn't that immediately cause an incredible over valuation and then a crash? Just curious.
Why would it crash? Where is the money going? And even if it did crash and people kept cost averaging that money in all it would do is be a sale for 6 months and come right back.
@@MeltingRubberZ28 Yeah, I don't know the answer. Just a hypothetical question. Many analysts recently state that there is too much money in the Market and I have no idea how they arise at that conclusion. I would guess by looking at the PE and generalizing at the total value from that. If you then inject a trillion dollars into it would that that invest too much into mix and cause problems. Please don't read into this that I am making a statement, just curious what others think.
Back to your answer A trillion+ dollars is a lot to absorb in half a year. But I see where you are going with it.
Just thought of something else. That is $1.1T every year not just for one year. Hmm, that puts another twist on it.
@bryanwhitton1784 exactly why anyone that would immediately sell because of the initial spike in the "overvalued market" would just be screwing themselves as the market would theoretically fully recover in no time.
The other aspect is the money doesn't have to go towards the stock market. I'd have at least one more rental property if I had that SS money.
@@MeltingRubberZ28 Which would have the affect of increasing the price of property. It wouldn't be just you but a million yous. ;-) It would be interesting to watch.