Quote:
Originally Posted by MandoMan
Yes, the wealthiest 10% may own 89% of all stocks, but I read in the NYTimes yesterday that 52% of Americans either own stock directly or through mutual funds. The rest could, too, and they should. For 34 years, until I retired last year, my employer and I each put a certain percentage of my salary into mutual funds through TIAA. My last few years, that meant that about $350 a month was automatically transferred from my paycheck. We sent all our kids to parochial schools and paid the tuition. We gave 10% to our church. Vacations were just to visit parents. We never owned a new car. We rarely went out to eat. But every month we invested. Between the fall of 2016 and today, those mutual funds have nearly doubled in value. They are up 17% this year during the pandemic, and nearly that much last year. Now I take out more every month from my mutual funds than I get in Social Security, but they still keep going up, even though I am definitely middle class.
These days I see lots of people who probably don’t have a penny in mutual funds driving brand new trucks and SUVs that cost over $50,000. They may be paying close to $1,000 a month in loans and insurance. If instead they drove a smaller car they bought used and put the difference into highly rated mutual funds, they too could be watching their investments grow and could be among those who prosper even during a pandemic. The article you linked to said that 89% of people with a post-graduate education own stocks or mutual funds. That includes me. That makes a gigantic difference when you retire. But you don’t have to have a college degree to invest. You just have to think long term. That’s the only way I was able to buy a home in The Villages when I retired.
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I am 48 years old and have owned my home for 15 years. Bought it as a single woman after my divorce and although the loan company said that I could have double what I was borrowing, I went with a $145,000 modest home that is now worth $285,000. (We're talking GA folks, not New York or LA!) :-) My husband now lives in the home with me and within the last few years we saved up and paid cash for all new Hardy Plank siding, new architectural shingle roof, and new large deck on the back of the house. The house is almost paid off and we will be moving to The Villages in 4 years when I retire. I will be done working for good before my 53rd birthday. My Honda Civic is a 2012 and so is my husband's Toyota Prius. I will continue to drive my Honda until the wheels fall off or someone totals it, which is what happened to the previous one.
I agree with the comment above. Too many people are about the here and now. I have been planning for retirement for a very long time. I was a teenager visiting my grandparents near Daytona Beach and knew that it was the life that I wanted and have had the image of retirement set in my mind for a long time. Please know that your children and grandchildren are watching and learning from you!
I work hard and with all the overtime that I get being included in my retirement calculation (monthly pension) and the $300K+ that I have right now in my investment accounts, plus my husband's pension, etc. we will live well in The Villages... not in a million dollar home but in a $350 - $400k home and this is good enough for us.
It all comes down to sacrifices made when a person is younger instead of him / her living totally in the here and now and spending like there is no tomorrow. Also, a wonderful life in older age can be had without feeling deprived in earlier years. My husband and I went to New Orleans in June and have been on two vacations this year to Mexico. Will be going to Panama (the country) for two weeks next month. Will be in THE VILLAGES :-) in December for 8 days and back to Mexico in January for 11 days. It is a give and take with the most important part being that money goes to investments and savings before the paycheck ever reaches the bank. What is left over is what is used for play and enjoyment in the present.