On Getting Ahead Financially

[TaintedAndDelish]

I've always wanted to get ahead financially, but it almost feels like I'm stuck in my current class. Its almost as if there's a cast system in place and no upward mobility. It looks as if very few people really make it from low class to middle or from middle to upper. In the US, we've always been told that this is the land of opportunity, that anyone can just pick themselves up by the boot straps and climb all the way up. This may be true in theory,  but it seems to be a lot harder that it actually sounds.

I have to wonder sometimes how much of this is due to not knowing how to play the game so to speak, one's starting resources, and how much of it has to do with one's attitude and disposition. If you compare this to a game of monopoly, someone who knows how to play the game well will have a much better chance at winning. Likewise, those who start off with more money will also have an improved chance - in the beginning, at least. Those who play carelessly because they are convinced that they will loose are also at a great disadvantage as they will miss opportunities that the more positive, hopeful folks will snap up.

I've tried looking for information on how to get ahead online, but most of what I tend to find is rather questionable - ie. smug people in suits selling success courses for three *low* payments of 99.99, Tony Robbins' hype sessions and so on.

So I'm curious.. what has actually worked for you? Do you know of any credible, useful sources of information on getting ahead? What are your thoughts on getting ahead?

As for what has worked for me thus far, I started out with no money for college and no trade. I had a place to live and food. I started out doing lots of crappy jobs ( mcDonalds, unloading trucks, stocking shelves etc..)  and eventually started reading books on how to fix computers. It was an area that interested me. Slowly, I was able to move from being the grunt who greased and fixed the sweaty exercise equipment in a local gym, to the guy who replaced broken computer terminals. As I bought more books in Barnes and Nobel, I was able to start troubleshooting computer problems. I built a small network for my employer, I built their website and put them on the web. Each job I moved to after that paid more and gave me more exposure  and room to expand. I would say that I've got about as far as I can as an employee at this point and am looking for ways to go farther. It seems that to go farther, I need to play the game differently.... but the rules to the game seem to be some sort of secret?

[Valthazar]

Like you did, I think it is better to be patient and develop yourself and your life in other ways for a period of time, and then later on, if you want, you can pay for college or a trade school out of pocket, rather than debt.  If you want to rise up in your field, maybe you can occasionally write some computer science related articles for a newspaper or two?  It may seem silly, but it really helps to have a 'record' of your knowledge in a given field, versus simply your employees knowing your skills.  Maybe consider putting together an article of some sort based on a computer science related topic and try to submit it for an academic journal of some kind.  I don't think this is a means to an end, but if you are really passionate about a given area, this sort of thing is a way to manifest that in the public, and have people outside of your job/business be exposed to your knowledge about that area.

I just decided to mention the writing idea since I am guessing most people on E enjoy writing, and are very good at communicating ideas in words.  I think the secret to success is in having exposure, and having others become aware of what you have to offer that others don't have.

[RubySlippers]

Some advice I assume you file taxes take as much as work as you can for cash and not report that, no reporting not tax liability so its more money in your pocket. Not all you should pay taxes in income you have a paper trail for but for some jobs take cash and offer a small discount in the long run you will make more.

But why is financially "getting ahead" so important if your comfortable and have a good life shouldn't that be more important?

[TaintedAndDelish]

Some advice I assume you file taxes take as much as work as you can for cash and not report that, no reporting not tax liability so its more money in your pocket. Not all you should pay taxes in income you have a paper trail for but for some jobs take cash and offer a small discount in the long run you will make more.

But why is financially "getting ahead" so important if your comfortable and have a good life shouldn't that be more important?

Heh heh ... because I'm not comfortable with what I currently have. I want much more. You live only [one] life, so why not make the most out of it financially? :)

[Retribution]

I am no financial expert but from everything I have read most people who do really well get there one of two ways. Or a combination of the two. The first being just plain dumb luck and the other being insane amounts of work. For myself over time I have bettered my situation but to be honest I like my play time too much to get rich. So call me comfortable because I know people who have gotten very wealthy but worked so hard at it that I see it as sad because they are destined to be the most wealthy people in the cemetery.

For an example of the combination of the two approach look at Phil Robertson's book Happy, Happy. Now I have blown a Duck Commander call since long before it was cool and the success the Robertson family is having now is just crazy. There was indeed a lot of luck in it though because if you read Phil's book you will find he dumped a teaching career and a chance at pro football to become of all things a commercial fisherman. He just was not happy with the grind took a chance, a big chance and look where the Robertsons are now. But I think when one takes those chances they take a risk. The more risk the more reward as a general rule.

As for your personal situation as you describe it sounds like you might be at that do you want to take a big risk stage. It can go big or make you go broke it is after all a toss of the dice. In your case it could be something like breaking away to start your own business. Another reference point for this approach is the History Channel Series The Men Who Built America. Thing is shows like that do not show how many people took the same risk and ended up going bust.

As for Ruby Slippers idea with all due respect playing loose with tax laws is not a good plan. Just ask Willie Nelsen or Al Capone for example. My general impression is that one can get away with about anything in America but failing to pay their taxes. Using the example of Capone he killed who knows how many and never did a day in jail for it. They got him on tax evasion.

[Mithlomwen]

Staff would like to take a moment to remind everyone that any advice given should consist of legal ways to get ahead financially. 

Thanks.  ;D 

[Vekseid]

Elliquiy is primarily the result of some five thousand man-hours of labor that doesn't even touch the site or server. Primarily SEO and dealing with e-mail. There's been more work since, of course - maintaining current servers and setting up new ones is certainly work - but it'd be pointless without the marketing effort involved.

Ultimately, the most reliable way to get ahead is either
1) Invest,
2) Provide a service where service is currently lacking.

Figuring out what that service is can take insight, being able to fulfill it, effort and skill.

Investing is typically slower, still requires insight (knowing where) effort and skill (research and number-crunching).

[Tairis]

Time, effort, a dash of politics and luck.

I'm not exactly making bank but I'm doing fairly well at the company I'm with. Showing initiative and being willing to tackle the more challenging tasks rather than avoiding them due to 'risk' can help you move up in the more corporate fashion. You do have to be politically aware in those sorts of scenarios, though, as you could do something that reflects poorly on one of the people you're trying to get to promote you. And unless the thing you're doing is so drastic that THAT person's boss takes an immediate personal interest you might shoot yourself in the foot.

[Trieste]

I see a lot of mentions of luck, here. I'm not sure that all this faith should be placed in 'luck'. I am not wealthy (far from it, honestly), but I am fairly successful at other things. It's my experience that if luck has something to do with your success, whatever sphere in which you've found your success, then that success is bound to be short-lived. Long-term success often depends on a combination of foreplanning, calculated risk-taking, foreplanning, hard work, foreplanning, time management, and did I mention the planning part? Setting a goal is the first step, but it's the easy part. You set a goal and then you sit down and come up with a realistic strategy for achieving it. You talk to others who have achieved the goal you wish to achieve. You talk to experts. Sometimes, people who have done it are the same as the experts - and sometimes they are not the same. Either way. You learn from them. You talk up your goal to other people as much as you can. You network, and you pick others' brains, and you try to come up with every scenario you can in which things will go wrong... and you figure out what you would do about it if it were happening. And you keep doing all of this as you progress toward your goal. You revise your strategy as-needed, even along the way. The only role that luck has in it is that luck occasionally comes along and makes a step that you were planning to take easier on you - luck never takes the place of one of your steps, though. Ever. I wouldn't go so far as to say you make your own luck, but I would probably call luck overrated.

Hope that helps.

[TaintedAndDelish]

Good stuff so far....  Keep it coming. Your advice might be the next person's gold mine. :)

One thing I didn't mention was head hunters and sectors. I found that some sectors pay more than others for the same work. Ie. Getting a job as a sys admin for a public school versus a financial institution will pay quite differently. Also working as a employee versus a consultant will result in different combinations of compensation and different levels of preference and prestige. 

Regarding head hunters, the first few that I dealt with ( about 10 years ago ) tried to low ball me on job offers. They had employers who needed people with particular skills but were paying a little less than I was already making. I was told that that's all I could possibly get - that's all I was worth. I would need a degree in X or Y or some other out-of-my-grasp achievement to get a higher salary. Sadly, I believed them but I didn't bite. The next head hunter that I met ( a week or so later ) got me a job making almost double what I was making. I was absolutely floored and didn't understand how it was possible. What I came to realize was that they were just looking to fill positions for their employer clients. They were just as quick to tell me that I was worth less than I was as they were to tell an employer that I was worth more than I was just to fill a position and take their finder's fee. The lesson I learned was that head hunters can work for or against you. If one doesn't have a decent job to fill, then move on to the next. If you suspect that you are worth more that what's offered, then shop around some more - possibly in a more lucrative sector.

[Trieste]

Well, and knowing what's going on in your prospective sectors can help, too. Like, in digital forensics, working public sector won't pay well, but there are some positions that will get you some awesome experience. I know a couple people who were offered a starting salary of about 80k for a private sector job... same-ish job in the public sector  pays about 50 or 60k starting. However, about two or three years of experience in that public sector job will send the same private sector company looking for you, only they'll be offering you six figures for starting pay. Just for a few years of experience (granted, hard experience) in the public sector.

So in the short run, sure, it pays to head private sector. In the long run, it pays to detour to public sector first, and that is not the case with every job. So be aware of things like that.

[Valthazar]

I thought you were looking more for career advancement advice, which would naturally yield financial stability.  But if your focus is purely financial, having stability is actually a lot easier than a lot of people think.

For example, let me give you an extreme case:

Assume a man is 45.  He earns $35,000 in gross take-home income.  $0 in retirement savings so far, and no home equity since he is an apartment renter.  He also has $0 in existing savings due to reasons beyond his control.  For this particular example, since it is the worst extreme, let us also assume that he will get $0 in social security when he retires.  Assume that he will retire in 20 years, and plans to stay retired for 20 years (for a life expectancy of 85).  If you were more realistic, you could make it 75, which would make retirement saving even easier.

If you use very conservative, low-risk, long-term mutual funds, which focus heavily on bonds rather than stocks, saving $1284 per month total, will yield $717,308 by age 65, in terms of future inflated dollar worth.  You can verify these calculations below.  There are other retirement calculators that differ in how conservative/risky your investment strategy is, but I usually tend to be risk-averse so I prefer being low-risk, 4-5% annual returns.

http://www.kiplinger.com/tool/retirement/T047-S001-retirement-savings-calculator-how-much-money-do-i/index.php

Financial stability has more to do with frugal living, and living within your means.

[TaintedAndDelish]

I thought you were looking more for career advancement advice, which would naturally yield financial stability.  But if your focus is purely financial, having stability is actually a lot easier than a lot of people think.

For example, let me give you an extreme case:

Assume a man is 45.  He earns $35,000 in gross take-home income.  $0 in retirement savings so far, and no home equity since he is an apartment renter.  He also has $0 in existing savings due to reasons beyond his control.  For this particular example, since it is the worst extreme, let us also assume that he will get $0 in social security when he retires.  Assume that he will retire in 20 years, and plans to stay retired for 20 years (for a life expectancy of 85).  If you were more realistic, you could make it 75, which would make retirement saving even easier.

If you use very conservative, low-risk, long-term mutual funds, which focus heavily on bonds rather than stocks, saving $1284 per month total, will yield $717,308 by age 65, in terms of future inflated dollar worth.  You can verify these calculations below.  There are other retirement calculators that differ in how conservative/risky your investment strategy is, but I usually tend to be risk-averse so I prefer being low-risk, 4-5% annual returns.

http://www.kiplinger.com/tool/retirement/T047-S001-retirement-savings-calculator-how-much-money-do-i/index.php

Financial stability has more to do with frugal living, and living within your means.

I think the topic should be somewhat broad so sure, its fine. The goal that I have in mind is to both contribute and reap information that will aid in getting ahead. Advice on career advancement, personal finance, networking, mentoring and so on would definitely fall into that category.

Being socially retarded, I've always wondered just how interpersonal networking works. I know people somehow get ahead financially by networking... they exchange contacts and what have you, but what exactly does one with these contacts? Anyone have any insight on this sort of thing? ( I know... I'm a little dumb like that... *shrugs )

[Oniya]

Networking:  Let's say that you fix someone's computer, and do a fabulous job at it.  You manage to save important files that he thought were lost on the brick of his hard drive.  Best case scenario, you hand the guy a card with your name on it 'in case he has trouble again.'  Worst case, you rely on his memory.  Later on, he doesn't have a problem, but his boss has a problem.  He says 'Hey, I know this guy...' and the boss calls you.  You do another bang-up job.  Maybe the boss has been looking for someone to work his IT help desk.  He puts in a word to the hiring manager...

[alextaylor]

What's worked very, very well for me:
Spend 10% of your income on charity
Spend 40%-50% of your income on investments
Enjoy the rest.

This does put tremendous pressure on your finances at first, but you should be able to adapt if you're decently smart. Start of last year, I was making $300/month. Now I'm making $5k a month.

Investments are in the form of opportunity. Sometimes you come across good land for cheap. Sometimes there's a gold rush on something, the next dotcom or mobile bubble. I made quite a few thousands on gold over the last few years just by investing into gold. Didn't expect it to go up as fast as it did.

If you don't have money stockpiled somewhere, you're not able to invest in anything. Business is rarely about what, it's about when. Facebook, Microsoft, Google all worked because they were in the right place at the right time. Something always happens which gives you a chance to make a lot of money. If you don't have the money set aside to start it off, you've missed a major opportunity.

The charity bit keeps you from getting greedy. If you start a business, it's seriously tempting to screw over everyone to 'survive'. You're tempted to mooch off richer people for lunch. You're tempted to claim everything. You're tempted to pay employees wages so low that they can barely afford the bus to work. If you get greedy, people won't work with you, customers won't want to buy from you, and your product will suffer. Charity also gives you a positive aura. And it does help when you have a lot of money reserved for charity, and dump a large amount of money into someone's lap.

Charity also doubles up as networking. Everyone loves being around charitable people. 10% is a lot, and easily puts you in the list of top 1% donors. Guess who else is on that list... many other multimillionaires, and the type who won't try to screw you over!


On networking:
Talk to everyone. Like you do here.
If you know someone you respect and like, approach them. You lose nothing if they turn you away and make a good friend if you click.
If you have a good conversation, make sure you get their number AND make sure you follow up.
Join clubs related to where you want your career to go.

I'm antisocial, but I force myself to do it. Find a topic both of you like, discuss. That's networking.

I spent a month looking on job hunting sites, didn't get a job. I then tried asking random Facebook friends for a job. One of them was a friend of my mother. Got a job with just a few days on Facebook. Was overworked, underpaid for a year, but still a good job with lots of experience.

I got poached for double the salary by a freelancer I was working with, who saw me doing a dedicated job. I got higher profile projects, more people saw me doing a good job, and pay just kept going up. That's how networking works. That's also why business cards are so powerful. The "Hey, I know this girl..." phenomenon kicks in a lot.

[Tairis]

I see a lot of mentions of luck, here. I'm not sure that all this faith should be placed in 'luck'. I am not wealthy (far from it, honestly), but I am fairly successful at other things. It's my experience that if luck has something to do with your success, whatever sphere in which you've found your success, then that success is bound to be short-lived.

My counter point to this is fairly simple: luck is always a factor in life, an unavoidable one. No matter how hard you work and plan, if a company doesn't have an opening in your area of expertise you're not going to be able to advance in that area. You can develop additional skills that qualify you for other positions, attempt to find other ways to move up, etc, but some things are just going to come down to timing.

There's nothing wrong with this nor is it something you can change. It is something you can mitigate with proper planning etc, but there is always going to be an elemental of it in everything you do. The real trick is exploiting it to its fullest when those opportunities do arise.

[Trieste]

My counter point to this is fairly simple: luck is always a factor in life, an unavoidable one. No matter how hard you work and plan, if a company doesn't have an opening in your area of expertise you're not going to be able to advance in that area. You can develop additional skills that qualify you for other positions, attempt to find other ways to move up, etc, but some things are just going to come down to timing.

There's nothing wrong with this nor is it something you can change. It is something you can mitigate with proper planning etc, but there is always going to be an elemental of it in everything you do. The real trick is exploiting it to its fullest when those opportunities do arise.

Okay, sure. The wonderful thing about the living of life is that there is more than one way to do so. :-)

[TaintedAndDelish]

If you passively let life's circumstances rail-road you into whatever corner it leads to, then yes, luck will be a very strong factor in determining where you end up. If you pick a realistic goal, identify the steps you need to get there and do the things you need to do, then you have a chance of steering yourself somewhere better. I personally prefer not to count on luck as its not something that I can control or predict.

[Tairis]

If you passively let life's circumstances rail-road you into whatever corner it leads to, then yes, luck will be a very strong factor in determining where you end up. If you pick a realistic goal, identify the steps you need to get there and do the things you need to do, then you have a chance of steering yourself somewhere better. I personally prefer not to count on luck as its not something that I can control or predict.

Life isn't something you can control or predict. It's something that you can guide at best and react to. If a position in a highly contested field that you're interested in opens up when you're just out of school and haven't built up the experience to technically qualify for? That's luck, good or ill depending on how you react.

If you lay out a plan and you're willing to do whatever it takes to achieve it? Chances are you'll succeed. But things outside of your control (the retirement of a colleague, the failure or success of a related company, even the current economic conditions) are always going to make a significant difference.

[Oniya]

There's a difference between relying on luck, and taking advantage of luck.  Any gambler will tell you that Lady Luck is an unreliable mistress, but lordy, do they like taking advantage of her.

[Trieste]

Oh, look. A plotbunny.

*watches it hop through the thread*

[Oniya]

My work here is done!

'May Dame Fortune smile upon you, but never her daughter, Miss Fortune.' (blessing from somewhere-or-other)

[RubySlippers]

Let's just ask: Does a person working full time for the minimum wage have a reasonable chance at finding affordable accommodation?

No, because over the last few decades wages have been left in the dust by the increased cost of housing.

Same with a car, what chance does a person making minimum wage have of purchasing and maintaining reasonable transportation: next to none.

Back in 1972 a tract house sold for $21,000... the same house goes for almost $400K today, $550K at the peak of the RE bubble.

The house costs 20 times what it did in 1972...generic bread over the same space of time has just about doubled... cars and gas are expensive, but not 20 times more expensive, in 1973 gas was under 50 cents a gallon, it would have to be $10 a gallon to have kept up with houses...

Even rents for many are just out of reach, I know lots of working homeless who are maybe $100 or so shy of being able to rent.

For the working poor the choices are rent a rundown room in a slum, share a house or apartment with someone or pitch a tent or live in a vehicle... buying a house or even just renting a place is just an impossible dream.

If the govt. were not so busy giving tax breaks to millionaires, starting bogus wars and "misplacing" $2.3 trillion dollars (like Rumsfeld admitted just two days before the 911 attacks...) if their priorities were different they could have set up lots of affordable housing and maybe even turned a modest profit on them...

But nyoooooo that's "sochulism!".

[Valthazar]

Ruby, I empathize with your plight, but you have stated in many posts that you are openly a 'slacker' and that you aspire to live life doing as little work as possible, and gaming the system to get by. 

So it is a bit ironic to lament about how hard it is to stay afloat today, when you yourself have said that you are not pushing yourself to your potential.

https://elliquiy.com/forums/index.php?topic=176176.0

[RubySlippers]

I'm not starving to death, and its not I don't want to work more just there are GOOD hours that is the best money per hour and not so good where I could work and get much less, so opt to go for the best money and not waste my time. Plus my standard of living is low frills I choose to use mass transit that is just $35 a month, my cell phone is paygo and I don't use it much, my clothes are from thrift stores, I go to the library for DVD's and books with the countywide exchange that is a huge resource and free etc. Health care was the only issue and the ACA Exchange the Federal Government will set-up will take care of that my income places me in the most support end of the provisions.

I just wanted to note the government didn't do much for decades to control prices and now its rather bad for some people.

[Tairis]

It's not the government's job to support you if you don't want to work. I own my own house, car, have a 401k, etc. I didn't get anything handed to me. I don't have a college degree. It just requires that you actually go out and do it. Which means you don't get to only work the hours you want to work. And from your post in the slacker thread you made it pretty blatant that you don't want to work. Because if that you want everyone to accommodate you. Sadly that's not the way the world works.

That's not to say that there aren't problems with the wage gap in the US or in the real estate market. But the person complaining about those things that has stated that they intentionally avoid work isn't going to elicit much sympathy from me.

[alextaylor]

My counter point to this is fairly simple: luck is always a factor in life, an unavoidable one. No matter how hard you work and plan, if a company doesn't have an opening in your area of expertise you're not going to be able to advance in that area. You can develop additional skills that qualify you for other positions, attempt to find other ways to move up, etc, but some things are just going to come down to timing.

There's nothing wrong with this nor is it something you can change. It is something you can mitigate with proper planning etc, but there is always going to be an elemental of it in everything you do. The real trick is exploiting it to its fullest when those opportunities do arise.

True, it's always a factor, but statistics and persistence covers it.

You might have say, a 5% contacts of getting a job through contacts every month. Or if you searched for jobs full time, you could have a 15% chance of getting a good job from job searching, and none from contacts that try to poach you. Most people will look at this as about the same odds... 10% is not worth the risk.

Over 6 months, the person who waits and hopes for a better job will have a 26% chance of getting a better job. The one who quit will have a 63% chance of getting a better job. Thanks to statistics, the person who persisted in looking for a job now has a 37% advantage, and good odds. They may still get unlucky. But if they kept persisting, the odds over a year would be 55% vs 86%.

There's the cost of quitting a job and staying unemployed - lack of a salary, lack of a portfolio, no contacts. But there's also the cost of working - dealing with an abusive boss, using up time and energy.

One doesn't simply look to Luck and say, "I can't risk this." Instead one looks to Statistics and decides, "Which will cost me more? Waiting for things to get better or taking a loss to try and make it better?" and make the decision on the spot, until the factors like probability or cost changes.

[TaintedAndDelish]

Let's just ask: Does a person working full time for the minimum wage have a reasonable chance at finding affordable accommodation?

No, because over the last few decades wages have been left in the dust by the increased cost of housing.

Same with a car, what chance does a person making minimum wage have of purchasing and maintaining reasonable transportation: next to none.

Back in 1972 a tract house sold for $21,000... the same house goes for almost $400K today, $550K at the peak of the RE bubble.

The house costs 20 times what it did in 1972...generic bread over the same space of time has just about doubled... cars and gas are expensive, but not 20 times more expensive, in 1973 gas was under 50 cents a gallon, it would have to be $10 a gallon to have kept up with houses...

Even rents for many are just out of reach, I know lots of working homeless who are maybe $100 or so shy of being able to rent.

For the working poor the choices are rent a rundown room in a slum, share a house or apartment with someone or pitch a tent or live in a vehicle... buying a house or even just renting a place is just an impossible dream.

If the govt. were not so busy giving tax breaks to millionaires, starting bogus wars and "misplacing" $2.3 trillion dollars (like Rumsfeld admitted just two days before the 911 attacks...) if their priorities were different they could have set up lots of affordable housing and maybe even turned a modest profit on them...

But nyoooooo that's "sochulism!".

Who would pay for this affordable housing?  If the government is to pay for it, then where do they get the money from? The government gets its money from tax paying citizens who earn their own money. Without people who enough money to support the government and themselves, the government would be broke.  This is not a sustainable model.

[Valthazar]

Other advice is to be a frugal spender, and save!

Saving an extra $100 per month is an extra $6000 in 5 years.

[Torch]

Other advice is to be a frugal spender, and save!

Saving an extra $100 per month is an extra $6000 in 5 years.

Actually, investing an extra $100 per month for 5 years will yield almost $9000, assuming an 8% rate of return.

The beauty of compound interest.

[Valthazar]

Yeah I made a post about that earlier, retirement savings are easier than people think.

[TaintedAndDelish]

That's true about compound interest, but is there currently any way to get that sort of interest rate? As far as I know, savings accounts are only giving a few percentage points - which really doesn't add up to much. Not sure if banks still offer CD's.. they used to be good but that was a while back. There's the stock market, but you really have to know what you are doing, otherwise you might as well be throwing darts at a board. Its easy to say that if you invested in company X 20 years ago you would be rich now, but without that 20/20 hindsight, you would have had no way of knowing that they would have been successful.

[Valthazar]

If you don't know what you're doing in the stock market, I recommend conservative mutual funds based on your retirement year.   They are called target retirement funds. 

For example, T. Rowe 2035 Target Retirement Fund (TRRJX) or Vanguard 2050 Target Retirement Fund (VFIFX)

If your retirement date is far away, investments will be riskier in the fund, as the manager will take bigger gambles.   But as the year approaches, they put more into bonds than stocks, so it is much safer.

I highly discourage investing in a single stock company, use mutual funds instead.  Most of these funds average 5-10% annual returns.

[Retribution]

I have been putting money into my personal retirement account for about 17 years. I kick $40 a pay into this account and I get paid twice a month so $80 a month. This is a work sponsored program and I am not taxed on that money as long as I do not draw it out. I had a financial adviser help me with the intial setup of the account and I have not touched it since. We went with a moderate risk and spread the money over a variety of stocks. Looking at my quarterly statements of course the loss/gain goes up and down. But I have -never- failed to have more money in that account than I have put in. The rate of return I have gotten on it over the course of time is 8.5%.

When the economy went bust it got close to what I had invested but was still above. I know co-workers who panicked and pulled their money out then. They are drawing about 1.5% interest on that money now. The economy recovered and I held my water and the last year has shown a growth of about 25% on the money I invest. It fluctuates but you get the idea. And this is with a whole $80 a month. So if you keep a long view as in decades it is possible to get a nice nest egg. Hell, if you have the extra coin to put a larger sum in each month you can probably get well off relatively fast. IMHO the key is do not panic but ride it out when you can.

[Torch]

If you don't know what you're doing in the stock market, I recommend conservative mutual funds based on your retirement year.   They are called target retirement funds. 

For example, T. Rowe 2035 Target Retirement Fund (TRRJX) or Vanguard 2050 Target Retirement Fund (VFIFX)

If your retirement date is far away, investments will be riskier in the fund, as the manager will take bigger gambles.   But as the year approaches, they put more into bonds than stocks, so it is much safer.

I highly discourage investing in a single stock company, use mutual funds instead.  Most of these funds average 5-10% annual returns.

Index funds are usually a good choice, as well as stock funds. Bond funds not so much at the moment, now that the bond market has tanked. Investors should look for low expense ratios (ideally less than 1%), and pay attention to the investment objectives of each fund. As Valthazar stated, the closer one is to retirement, the more conservative and stable the investment should be. A 25 year old investor can ride out fluctuations in the market that a 55 year old cannot.

[RubySlippers]

It's not the government's job to support you if you don't want to work. I own my own house, car, have a 401k, etc. I didn't get anything handed to me. I don't have a college degree. It just requires that you actually go out and do it. Which means you don't get to only work the hours you want to work. And from your post in the slacker thread you made it pretty blatant that you don't want to work. Because if that you want everyone to accommodate you. Sadly that's not the way the world works.

That's not to say that there aren't problems with the wage gap in the US or in the real estate market. But the person complaining about those things that has stated that they intentionally avoid work isn't going to elicit much sympathy from me.

Fortunately the POOR INDUSTRIAL COMPLEX is alive and well between the government people whose job depends on the poor, charity do gooders and the fact no one will tolerate a woman disabled in a wheelchair with poor eyesight starve in the streets (human nature is human nature) so play it off to add to my tips. I know the fact I'm disabled and trying makes people like you far more generous when they have dollars in their pockets to toss me one. And I do work. But Busking my main skill set is simple there are factors that make it work: lots of people around, they happy, they having cash in their pockets and being appealing to give that money to (talent, disabled). In my area there is ,besides special event days,, about 10 hours or so a week where the four factors click and I get good money. If I worked twice as much and I did that my income would be maybe 25% more since the tips drop off (not a lot of people for example less tips). So I fit my income and built a lifestyle around it.

But I pay taxes and qualify for the Federal Exchange I just didn't take my usual tax deductions so my income was over the lowest limit, so I don't see the issue I don't care about owning a car, don't want to own a house, not interested in lots of stuff and frankly I could be on SSI and all there was a time I cold have gotten it.

I would argue I just have priorities other than working but since I'm not a ward of the state, living with family (multigenerational) and I think most of the "normal people" are nuts Slackers fill a place in society showing there is another way. How come workaholics are fine but their natural opposition is evil?

[Blythe]

I would argue I just have priorities other than working but since I'm not a ward of the state, living with family (multigenerational) and I think most of the "normal people" are nuts Slackers fill a place in society showing there is another way. How come workaholics are fine but their natural opposition is evil?

An average working person is not a workaholic. They are simply working the hours they want to sustain a lifestyle they want to maintain. There is nothing wrong with that. A workaholic is someone addicted to work. An average person is simply working as a necessity or out of pleasure.

And there is a difference between someone disabled who needs support due to an inability to work and someone capable of working who chooses not to. One of those groups is entitled to government aid. The other is taking advantage of a system meant for those who need it and is  usurping valuable resources for someone who could use them more. Essentially, a burden. And taking advantage of a system not meant for oneself and instead meant for the needy shows a distinct lack of morality to me, because funding is not infinite. That's why programs meant to fund the disabled are on budgets.

Taking from a finite amount of aid allotted for.......let's say Group A, when one is a member of Group B, takes away from the total aid meant for Group A. Group A suffers financially for that, because someone in Group A will not have access to necessary aid when Group B has already used it.

In this case, Group A is the disabled, and Group B consists of "slackers." So yes, I believe it is morally wrong for someone in Group B to take from resources that should go to Group A and potentially cause suffering, when Group B is capable of providing their own resources.

[alextaylor]

That's true about compound interest, but is there currently any way to get that sort of interest rate? As far as I know, savings accounts are only giving a few percentage points - which really doesn't add up to much. Not sure if banks still offer CD's.. they used to be good but that was a while back. There's the stock market, but you really have to know what you are doing, otherwise you might as well be throwing darts at a board. Its easy to say that if you invested in company X 20 years ago you would be rich now, but without that 20/20 hindsight, you would have had no way of knowing that they would have been successful.

Not sure what other countries are getting, but I'm only getting 6% at best and I maxed that out. Later it occurred to me that it was quite dumb, because even though I'd get a million in 20 years, investing the money now matters more. Why would you want a lot of money in the future, when money is worth less?

If you're not sure what to do just buy precious metals or land. As long as there's inflation, limited resources are a great investment.

[Valthazar]

Not sure what other countries are getting, but I'm only getting 6% at best and I maxed that out. Later it occurred to me that it was quite dumb, because even though I'd get a million in 20 years, investing the money now matters more. Why would you want a lot of money in the future, when money is worth less?

If you're not sure what to do just buy precious metals or land. As long as there's inflation, limited resources are a great investment.

The rate of inflation is about 2% or so, so even getting 6-7% compounded interest is a very reasonable return, if you are simply looking for long-term stability, rather than looking to get rich.

Are you referring to investing in gold/silver in the market, or actually buying gold bars?  I wouldn't recommend this for people who don't know what their other options are, because this is not a fool-proof investment channel like some people claim.  I don't know the exact numbers but the price of gold has fallen more than 30% since around this time last year.  Also, it is not a very good idea to have thousands of dollars worth of gold sitting around in your house.  You'd probably want to get insurance on the gold bars, and that's just another hassle to worry about then.

The most important thing to remember is to not get greedy.  Just be content with modest 5-8% returns, and you'll have a stable retirement.  If everyone is saying that one stock is a winner, be weary. 

Edit:  corrected percentage

[alextaylor]

Ah, I guess 'stable retirement' seems to be a huge turn off for me. It's foolproof to live a safe life and do whatever you like when you're 55. But then you'd be 55, unable to eat the kind of 5 star food you wished you could afford, unable to go on the kinds of adventures you wished you could. I mean, living shouldn't about trying not to die.

Also it assumes some stability in the world. If we get hit with a war or alien invasion or some idiot president who hyperinflates the economy, all that stored up money isn't going to be worth so much. A few gold bars makes your wealth easier to transfer across borders, should it come down to that. Your mileage may vary, though. Precious metals make more sense in somewhere like Pakistan or Egypt, more than in a stabler place like Norway.

[Valthazar]

It's simply a difference in perspective.  I would much rather get consistent 5-8% returns, live modestly, and ensure a decent standard of living for my future children, afford their college tuition, etc. - rather than take a gambler's perspective to the stock market, and risk poverty.  As far as the unpredictability of life, I remind myself that the most important things in life are not derived from money.  I view money as being a necessity for sustenance and progress, rather than as representative of my happiness. 

Regardless of my investment habits, I could die tomorrow in a car crash - that is something that is out of my control whether I am rich or poor.  What I can control, however, is my financial security.  Personally, it helps me sleep at night knowing that I live modestly, and that I don't need to worry about losing my portfolio due to risky investing habits. 

Most people who are 55 are not even dreaming of eating at 5 star hotels or taking outlandish adventures.  Most of them are struggling just to find a place to live and put food on their table.  Having the basics is what is important to me, and I don't think you can just take that for granted in this economy.

[TaintedAndDelish]

I remember when gold went for about $300 an ounce. Sometime later, we had the housing bubble in the US and the stock market ( which was over priced ) crashed. It was at this point that investors started pulling their money out of the stock market and started buying up gold. This investor's demand for gold is what made it skyrocket to $1800 an ounce. I don't know what it currently goes for, but when you see a bubble like this, you know its just a matter of time before it pops. Once it gets dumped for something else, it won't recover. ( in a reasonable amount of time )

"Ah, I guess 'stable retirement' seems to be a huge turn off for me. It's foolproof to live a safe life and do whatever you like when you're 55. But then you'd be 55, unable to eat the kind of 5 star food you wished you could afford, unable to go on the kinds of adventures you wished you could. I mean, living shouldn't about trying not to die."

I think there's a balance between "too old to really enjoy your fortunes" and "Dying of hunger because you're too old to be gainfully employed." Exactly where the balance lies will be different for everyone. For me, I assume that there will be no government supplied social security benefits when I'm ready to stop working. I'm convinced that they will have been depleted by then, so I'm proactively trying to build my own source of wealth while I'm relatively young.

Yes, 40 is the new 20...

>.>

[Callie Del Noire]

Well the TSP of the DoD bombed on me. The managers got selective hearing and when the International Fund started to tank while I was on deployment they never got any of my messages/emails or whatever. So I lost like 85% of my investment.

So now that I got a new job where I will have very very little expenses (the contract covers housing, cars and such)  and a BIG salary and an end of contract bonus, so I've been looking and listening. And when it comes to see my brother and his wife, I'll be asking some questions. Saving accounts and CDs don't seem to have really BIG percentages at this point.

[Cecilia]

The stock market averages about 100% ROI every 7 years.  If you are looking for long term investments, I would suggest finding a long term mixed fund that has a good long history and leaving money there long term.  There are plenty of funds out there that require no set up fee, and you can add money to without any costs.  Do some research and read before spending any money.  Finances for Dummies is actually a very good book to get you started. As is "TheWealthy Barber."

By the way,if you think retiring at 55 is something you want to do, you need to have a pretty huge retirement plan.  There's a formula for it somewhere, but 55 is awfully young to be retiring.  I can't imagine retiring before 65...if ever.

[Beguile's Mistress]

Staff Disclaimer

We know that many of our members are challenged in their daily lives and need to take advantage of the resources their government offers.  We also know that many people work as hard as they can to live their lives on their own terms, morally and ethically.  Elliquiy's owner and Staff do not condone illegal activities nor do we wish to promote them.  Advice and information that can help is always welcome.  Self-congratulatory statements and information that can lead to someone breaking the law and losing access to the benefits and resources they are entitled to are not welcome.

Please do not suggest breaking the law, celebrate your ability to do so or provide information that will assist someone in that endeavor.   

[alextaylor]

By the way,if you think retiring at 55 is something you want to do, you need to have a pretty huge retirement plan.  There's a formula for it somewhere, but 55 is awfully young to be retiring.  I can't imagine retiring before 65...if ever.

That's a bit odd.. 55 is considered the standard retirement age in my country. There are many who even retire at 50 or younger then become writers and such. Depends on how you define retirement, though... a lot of people here mean it to say no longer working a 9-5 job, and doing what you like. Which may well be 'work' like full-time politics, taking a bunch of degrees, planting and selling herbs in the backyard, or some other creative output that doesn't guarantee a return.

If people in the richest country in the world are worrying about eating when they get old and people in a backwards, developing country are living in lavish homes at 50 complaining about not being physically able to fine dine... I don't even know what to think about the economy anymore :P

[Valthazar]

That's a bit odd.. 55 is considered the standard retirement age in my country. There are many who even retire at 50 or younger then become writers and such. Depends on how you define retirement, though... a lot of people here mean it to say no longer working a 9-5 job, and doing what you like. Which may well be 'work' like full-time politics, taking a bunch of degrees, planting and selling herbs in the backyard, or some other creative output that doesn't guarantee a return.

If people in the richest country in the world are worrying about eating when they get old and people in a backwards, developing country are living in lavish homes at 50 complaining about not being physically able to fine dine... I don't even know what to think about the economy anymore :P

Malaysia is a country with extreme income inequalities.  One segment of the population can live the comfortable lifestyle you describe, but another sizable majority is living in poverty.  I think a lot of your experiences are the result of having an inheritance from your family, and some of your posts reflect an inability to empathize the with the plight of people trying to simply stay afloat.  Even in your own country, I urge you to look at the experiences of people who were not privy to having large inheritances. 

You are completely ignoring Malaysia's widespread governmental corruption and rural poverty.  I think the purpose of this thread was to provide straightforward, simple tips for financial stability, but approaching this from the perspective of privilege only does an injustice to people genuinely trying to start off.

[Callie Del Noire]

Malayasia wasn't any worse than any other country in that part of the world in that respect ValthazarElite. The little time I got to spend there showed me a MASSIVE split between the classes but no more than some of the other areas I saw.

[Kythia]

With the greatest respect to Malaysia and South East Asia in general, though, "no worse than any other country in that part of the world" is not a terribly high bar.