Partial unemployment/partial furlough in this situation

[BiggsCoug]

We've been down this road on this board: $15/hr jobs aren't meant for people to make a career out of. They're supposed to be stepping stones to better things - Taco Bell is begging for managers, literally offering 6 figures to the right people. There are opportunities there, but lets be honest - a lot of these people don't want more responsibility or work. They are "happy" to barely get by, doing the bare minimum to survive, but are first in line to bitch and whine about rent (in downtown Seattle ) and whatever else.

Don't hand me the one-offs either - the single mom or whatever. Most of these kids have opportunity to make change, they chose not to. Heres a number I'd like to see: how many Gen Y/Z/Millenials have ever held down two jobs at once? Compare to Gen X/ Boomers/ greatest generation. When I say I see this first hand, I mean I talk to the father of my great niece about why he doesn't get a second job and he looks at me like I have a second head. I mean, even if you only work that second job to get caught up or maybe put some $$ in savings, at least you can say you did something. Instead, we have an entire generation of Boomers and Gen X parents who bail their kids out every time they need something, especially financially. While that's nice to be able to do, it doesn't let them learn how to be self sufficient.

Im not saying that $15 per hour jobs are supposed to be a career. Is it unreasonable to be able to work that job and have a modest apartment? Is it unreasonable to expect to be able to live in the area you work?

Should we now debate the purchasing power that people, we will call them boomers, had growing up that people now do not???

I see a lot of old people bitch and moan about young kids today... while they completely ignore the fact that they were able to buy a house and raise a family on a modest wage. An opportunity that doesn't exist now for people hoping to do the exact same thing.

 

[BleedCrimsonandGray]

Im not saying that $15 per hour jobs are supposed to be a career. Is it unreasonable to be able to work that job and have a modest apartment? In the Seattle area - yes. Is it unreasonable to expect to be able to live in the area you work? nope - move away from high rent areas. suburbs need burger flippers too.

Should we now debate the purchasing power that people, we will call them boomers, had growing up that people now do not??? why, its been debated to death. the worst offender is housing and tuition, but it doesn't help that society has created more "needs". 30 years ago you had bills associated with your house - that was about it. maybe a car payment.

I see a lot of old people bitch and moan about young kids today... while they completely ignore the fact that they were able to buy a house and raise a family on a modest wage. An opportunity that doesn't exist now for people hoping to do the exact same thing. there is a ton of hypocrisy from boomers (I'm not one) bitching and moaning about "how it used to be" is about as useful as bitching and moaning about the kids. we're in a new normal - two income households, internet is a must (maybe replaced the phone bill?) etc. I bitch about kids because I see them bitching while getting tats, smoking weed, and working part time but "wah wah rent is too high".

 

[chipdouglas]

We call ourselves a consulting firm, but it's an engineering design firm.


It's important to seek a balance in life. I don't agree with a 25 year old sacrificing everything now so that they can retire comfortably at 55 years old. I don't agree with the 25 year old yelling, "YOLO" and going to Thailand. If you've spent your life sacrificing so that you can retire with a large sum of money in the bank, that's great, but I'd say that you are wrong for judging people that have chosen to seek a balance of saving and enjoying life.

We've taken our kids to New York, Chicago, San Francisco, Los Angeles, Phoenix, Denver, Dallas, San Antonio, Miami, Orlando, Atlanta, Washington DC, Boston, Seattle, and just about any other major city that's worth a visit. We've visited dozens of national parks. I wouldn't trade the memories generated with my kids for a few years of extra retirement. Of course, when we take those trips, we do try to do so in as fiscally responsible ways as we can. We occasionally splurge for a specific moment, but we don't "waste" money while on trips if we can avoid it.

I say that knowing that I do take the time to save enough money so that my wife and I will retire with 7 digit savings because we do put enough back to get there eventually. I own a BMW....but I bought it used so I could let the first owner eat $35,000 of losses in value. My dad was always a little perturbed that I never bought a Porsche because he would have done that if he was in my shoes. People do need to use common sense in how they spend money, but getting too caught up in saving for retirement at the expense of the now isn't good either. So, be judgmental of the grasshoppers if you want but realize that you can spend your whole life saving and get killed in a car accident.....or die from coronavirus.....and all the money and savings in the world will not save you and you would have sacrificed today for nothing at all. It should be a balancing act.......not shooting for the extreme at either end.

I don't disagree but that's not what I'm saying here.

In my situation there are very few tradeoffs. We enjoy the occasional trip abroad, an annual out-of-state trip, and we eat out when we want to. We just chose to spend our other money saving and investing rather than letting it get chewed up by car payments, big mortgages and entertainment. People spending $800/mo on car notes is not an "unbalanced" scenario - it is unfortunately the average scenario!

An important point is that EVERYBODY can do it without being extreme. We started investing money for my son right when he was born. For $50 every paycheck at 10% nominal yield, he'll have his first $1MM by age 45, and $3MM by 55 - without ever working. Even with lower yields we're still talking big numbers. Add in salary and 401k and he'll be secure in his 30s or 40s. Show me someone who says $25 or $50 per paycheck is untenable, and I'll show you someone who's paying for some combination of beer, cigarettes, betting, tattoos and other less worthy indulgences.

 

[CougSinceBirth]

As someone in their late 20s, I've appreciated reading all these responses.

 

[BleedCrimsonandGray]

As someone in their late 20s, I've appreciated reading all these responses.

You can see through all the weed and vape smoke?

j/k.

Now get a job you lazy hippie

 

[Observer11]

I don't disagree but that's not what I'm saying here.

In my situation there are very few tradeoffs. We enjoy the occasional trip abroad, an annual out-of-state trip, and we eat out when we want to. We just chose to spend our other money saving and investing rather than letting it get chewed up by car payments, big mortgages and entertainment. People spending $800/mo on car notes is not an "unbalanced" scenario - it is unfortunately the average scenario!

An important point is that EVERYBODY can do it without being extreme. We started investing money for my son right when he was born. For $50 every paycheck at 10% nominal yield, he'll have his first $1MM by age 45, and $3MM by 55 - without ever working. Even with lower yields we're still talking big numbers. Add in salary and 401k and he'll be secure in his 30s or 40s. Show me someone who says $25 or $50 per paycheck is untenable, and I'll show you someone who's paying for some combination of beer, cigarettes, betting, tattoos and other less worthy indulgences.

Unfortunately, the way the Fed is printing money, that $3Million is going to be a fraction of what you think it is going to be. Inflation is going to be the next consequence of this whole debacle.

Because some guy in China allegedly ate a bat. Allegedly.

But you are spot on relative to tats, iPhones, cigs or whatever. There hasn't been real financial sacrifice or delayed gratification in this country for probably 40 years, maybe more.

 

[Flatlandcoug]

I don't disagree but that's not what I'm saying here.

In my situation there are very few tradeoffs. We enjoy the occasional trip abroad, an annual out-of-state trip, and we eat out when we want to. We just chose to spend our other money saving and investing rather than letting it get chewed up by car payments, big mortgages and entertainment. People spending $800/mo on car notes is not an "unbalanced" scenario - it is unfortunately the average scenario!

An important point is that EVERYBODY can do it without being extreme. We started investing money for my son right when he was born. For $50 every paycheck at 10% nominal yield, he'll have his first $1MM by age 45, and $3MM by 55 - without ever working. Even with lower yields we're still talking big numbers. Add in salary and 401k and he'll be secure in his 30s or 40s. Show me someone who says $25 or $50 per paycheck is untenable, and I'll show you someone who's paying for some combination of beer, cigarettes, betting, tattoos and other less worthy indulgences.

First, 10% is a pretty ballsy assumption for nominal yield. There isn't a good financial adviser out there that would recommend using that type of number for planning. However, your overall premise is good and I applaud you if you've been able to do that with your son. We sort of did that but didn't try to invest the money, we used it to save up so that we could buy our kids their first car(s) with cash. We've also saved for their college education using a 529 plan. So, if you can afford to do what you're doing...good for you.

Now, I'll disagree with you on the whole idea that anyone can save $25 or $50 per paycheck. You obviously really have no idea how difficult the real world is for some people. Aptitude, intelligence (social, academic, emotional and other), socioeconomic backgrounds, skin color, attractiveness, personality and a whole slew of factors dramatically influence a person's ability to earn money. You can wax poetic about pulling yourself up by your bootstraps, but I've seen people's dreams get crushed by the negativity of the people around them. I've seen peer pressure ruin lives. I've seen alcohol and drugs destroy lives and ruin futures. What do you do when your HVAC system, hot water heater and refrigerator all crap out in the same year? I know a guy (me) who has spent about $20,000 replacing HVAC systems in three houses in the past 2 1/2 years. Even for the well off, it can be tough. I know someone that isn't extravagant but struggles to provide too much to his kids because he has six of them. Your math isn't as sexy when it's 5% return and each kid is only getting $5-$8 a paycheck.

There are a lot of fools out there that fall into your scenario where they are so concerned about keeping up with their friends that they are squandering opportunities away. My wife thought the 529 plan was a terrible idea when we started it but she is grateful now that it has allowed our son to get into his senior year of college without debt. He has to work to pay for his utilities and other bills, and he puts money into savings to help get to the finish line.....but a little planning on our part has gone a long way. People do need to be smart with their money, but your assumptions just don't match what the real world offers a lot of people. For those that can afford it.....I do agree with you that they need to consider how they spend their money and set a reasonable amount aside to make that difference. My son and I have talked about the importance of him investing and saving money when he gets his first job out of college and to avoid the temptation to try to keep up with the joneses.

 

[dgibbons]

Unfortunately, the way the Fed is printing money, that $3Million is going to be a fraction of what you think it is going to be. Inflation is going to be the next consequence of this whole debacle.

Because some guy in China allegedly ate a bat. Allegedly.

But you are spot on relative to tats, iPhones, cigs or whatever. There hasn't been real financial sacrifice or delayed gratification in this country for probably 40 years, maybe more.

For the short term, inflation won’t be a problem. No one is going to buy new cars, houses, durable goods, take vacations, etc. Discretionary spending will bottom out, if it hasn’t already.

The fed is making sure there will not be liquidity problems like in 2008. The fed is obviously more concerned about unemployment and stagnant demand.

Assuming I get a stimulus check, I’ll use it to pay my taxes. Doubt I’ll be the only one.

 

[Observer11]

For the short term, inflation won’t be a problem. No one is going to buy new cars, houses, durable goods, take vacations, etc. Discretionary spending will bottom out, if it hasn’t already.

The fed is making sure there will not be liquidity problems like in 2008. The fed is obviously more concerned about unemployment and stagnant demand.

Assuming I get a stimulus check, I’ll use it to pay my taxes. Doubt I’ll be the only one.

Watch the price of gold. Inflation is on the horizon.

 

[BSpike76]

First, 10% is a pretty ballsy assumption for nominal yield. There isn't a good financial adviser out there that would recommend using that type of number for planning. However, your overall premise is good and I applaud you if you've been able to do that with your son. We sort of did that but didn't try to invest the money, we used it to save up so that we could buy our kids their first car(s) with cash. We've also saved for their college education using a 529 plan. So, if you can afford to do what you're doing...good for you.

Now, I'll disagree with you on the whole idea that anyone can save $25 or $50 per paycheck. You obviously really have no idea how difficult the real world is for some people. Aptitude, intelligence (social, academic, emotional and other), socioeconomic backgrounds, skin color, attractiveness, personality and a whole slew of factors dramatically influence a person's ability to earn money. You can wax poetic about pulling yourself up by your bootstraps, but I've seen people's dreams get crushed by the negativity of the people around them. I've seen peer pressure ruin lives. I've seen alcohol and drugs destroy lives and ruin futures. What do you do when your HVAC system, hot water heater and refrigerator all crap out in the same year? I know a guy (me) who has spent about $20,000 replacing HVAC systems in three houses in the past 2 1/2 years. Even for the well off, it can be tough. I know someone that isn't extravagant but struggles to provide too much to his kids because he has six of them. Your math isn't as sexy when it's 5% return and each kid is only getting $5-$8 a paycheck.

There are a lot of fools out there that fall into your scenario where they are so concerned about keeping up with their friends that they are squandering opportunities away. My wife thought the 529 plan was a terrible idea when we started it but she is grateful now that it has allowed our son to get into his senior year of college without debt. He has to work to pay for his utilities and other bills, and he puts money into savings to help get to the finish line.....but a little planning on our part has gone a long way. People do need to be smart with their money, but your assumptions just don't match what the real world offers a lot of people. For those that can afford it.....I do agree with you that they need to consider how they spend their money and set a reasonable amount aside to make that difference. My son and I have talked about the importance of him investing and saving money when he gets his first job out of college and to avoid the temptation to try to keep up with the joneses.

1970 through 2019 S&P returned 10.9%. There are some really good 20 year periods in there and some not so good. If you have 50 years it would probably be something around 10. Past results etc., etc.

 

[Flatlandcoug]

1970 through 2019 S&P returned 10.9%. There are some really good 20 year periods in there and some not so good. If you have 50 years it would probably be something around 10. Past results etc., etc.

When you look at stock historical charts.....as you said, it really depends on your time frame. From June 1995 to today.....the S&P is up about 6.3% annual (average). Even looking at the peak last year, it was up around 8% in that 24 year period. Past performance is no guarantee of future performance. Again, no sane financial adviser is going to tell you to assume that you are going to get a 10% return, no matter what time frame you want to look at from the past.

 

[Flatlandcoug]

Watch the price of gold. Inflation is on the horizon.

I just looked up the gold price chart and it's up a little in the past 60 days (and last couple years) but it isn't popping like crazy. It's still well below the numbers we saw in 2008 at this point. Once the silliness from the coronavirus settles down, I'd expect it to settle back where it was. Inflation could become a problem if the virus isn't figured out in the next six months, but as mentioned above, fear is going to keep most items from blowing up in price in the short term.

 

[chipdouglas]

Unfortunately, the way the Fed is printing money, that $3Million is going to be a fraction of what you think it is going to be. Inflation is going to be the next consequence of this whole debacle.

That may or may not be true, but in any event:

• Forecasts like this have been made for decades; most have not come true
• 61 of the last 100 years have seen inflation below 3.2%, and 80 have seen it below 5.2%.
  • Just 7 of the last 100 have seen 10%+, and most were WWII and 1970s energy crisis/stagflation
• Savers will be hit harder than investors, as they are realizing no appreciation from parking money
• Most importantly: predictions of outlier events in the future should not prevent you from being frugal and/or forward-looking today

 

[chipdouglas]

Now, I'll disagree with you on the whole idea that anyone can save $25 or $50 per paycheck. You obviously really have no idea how difficult the real world is for some people.

All due respect but spare me. It was not uncommon growing up for my folks' W-2s to read $0. I qualified for free school lunches when that was barely a thing. My parents knew nothing and taught me nothing about finances, and they are currently bankrupt, having lost their modest, 900-sq ft house of 30+ years. If I broke bones, we didn't visit hospitals. I had no advantages then that shielded me from the reality of the silver spork lifestyle you think I haven't experienced.

And I don't know what to tell you if you feel drugs/alcohol is a legitimate reason not to be able to afford $25 or $50/mo. That very much falls into personal accountability, which doesn't get a pass from me. Babysitters can do it, dogwalkers can do it, construction workers can do it. There is a thriving FIRE community on Reddit - you'd be surprised at how many hourly folks are making money rather than excuses.

 

[chipdouglas]

1970 through 2019 S&P returned 10.9%. There are some really good 20 year periods in there and some not so good. If you have 50 years it would probably be something around 10. Past results etc., etc.

Yes. Through the bull market I was consistently clearing 15%. That was an outlier market (but fortunately one that lasted a long while). Benchmarking off of peak, once-in-a-century-coronavirus pandemic panic is even sillier. As you say, the truth is closer to the high single digits.

 

[BSpike76]

When you look at stock historical charts.....as you said, it really depends on your time frame. From June 1995 to today.....the S&P is up about 6.3% annual (average). Even looking at the peak last year, it was up around 8% in that 24 year period. Past performance is no guarantee of future performance. Again, no sane financial adviser is going to tell you to assume that you are going to get a 10% return, no matter what time frame you want to look at from the past.

Yep, the historical return for a 50/50 stocks/bonds was 8.8% for that period. I plan/hope for 4% on my 50/50 portfolio. If it does better I get some mad money at the end of the year when I take out 4% of the balance for the annual budget.

 

[Observer11]

I just looked up the gold price chart and it's up a little in the past 60 days (and last couple years) but it isn't popping like crazy. It's still well below the numbers we saw in 2008 at this point. Once the silliness from the coronavirus settles down, I'd expect it to settle back where it was. Inflation could become a problem if the virus isn't figured out in the next six months, but as mentioned above, fear is going to keep most items from blowing up in price in the short term.

There are multiple factors affecting the price of gold, not just COVID. It was starting to trend upward last summer.

Among my many lucrative endeavors, I'm also involved in mining so we watch this almost daily. I speak with fund managers regularly and the gold guys are as bullish as they have been in the past 10 or 11 years. This isn't your regular infomercial buy gold now stuff.

 

[Flatlandcoug]

There are multiple factors affecting the price of gold, not just COVID. It was starting to trend upward last summer.

Among my many lucrative endeavors, I'm also involved in mining so we watch this almost daily. I speak with fund managers regularly and the gold guys are as bullish as they have been in the past 10 or 11 years. This isn't your regular infomercial buy gold now stuff.

I would agree that it's a good time to buy gold.....but it's also a market that ends up biting a lot of people. It was $1800/oz after the 2008 crash and dropped 40%. I don't think we are at the top yet, but I've seen gold prices surge multiple times in my lifetime and seen it fall dramatically afterwards.....every.....single.....time.

 

[Observer11]

I would agree that it's a good time to buy gold.....but it's also a market that ends up biting a lot of people. It was $1800/oz after the 2008 crash and dropped 40%. I don't think we are at the top yet, but I've seen gold prices surge multiple times in my lifetime and seen it fall dramatically afterwards.....every.....single.....time.

Yup. That's the industry. Same as oil.

With decoupling from China and the Saudi/Russia oil war, lots of interesting happenings and either opportunities or nightmares depending on where one is at in the cycle.

 

[etowncoug]

10% is a high annual return over an extended period of time. Folks only think this way at the end of bull markets. 6-7% is a much more realistic long term average.

But you are doing the right thing by saving/investing if for no other reason than building a money snowball rather than building other people's snowball via debt payments.

You can save money living on $2400 a month. It requires saying no to a lot of expenses but I know a lot of folks who live in Seattle, make those dollars and are socking away $400-$500 a month because they have goals. I also know people bringing in $10,000 a month who can't save $100 a month for retirement because they have so many bills.