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gravenewworld
- 1,132
- 26
aeroegnr said:Yup, time to cut the spending that had its roots in the Hoover/Roosevelt administration.
Chance that that will happen= closer to negative than positive.
chroot said:Every Republican administration in the last 50 years has increased the deficit. Every Democratic administration has decreased it.
chroot said:. I cannot even imagine that, if the economy is important to you at all, Bush is even a consideration.
- Warren
aeroegnr said:Okay, kill federal education funding, all subsidies, welfare, healthcare, medicare, social security, etc.
By then, I'll be happy, but that's too bad because I'd also be dead (no chance in hell short of revolution).
Even scarier is that that's peanuts compared to the debt the article is talking about. And I don't see a way out - people are just too attached to their handouts to rationally consider what it is doing to the economy.chroot said:Every Republican administration in the last 50 years has increased the deficit. Every Democratic administration has decreased it. Bush has caused the largest increase in debt in US history, second only to his daddy. I cannot even imagine that, if the economy is important to you at all, Bush is even a consideration.
- Warren
Yeah, but people are so irrational about it - once you start handing out money, people won't let you stop (via their vote) even if you're taking money out of their pockets with your other hand.gravenewworld said:Social Security should be done away with anyway. It was never meant to be permanent, it was only to help out during the Great Depression.
You would have had PLENTY to save while working had you not been paying into the system.selfAdjoint said:I get $1500 a month from social security, and that's what I live on. Oh, I should have saved while I was working? Yeah right! With what? One thing I did all through the years was plug in my FICA, check after check. And that, suitably deflated, is what's coming back to me. We'll seee what you guys think when you get old. Remember to do the calculation, 2.5% average inflation per year for 30 years.
selfAdjoint said:By paying into the system I was saving. The idea that I could have had more if I had invested it is a counterfactual; I could also have lost it all. I was also buying a house (a couple of houses at different times). I lucked out; both times when I sold the market was high and I got an excellent price. That money went to buy the place I now live in (in a deal with my daughter), so at least that part of my outgo is nulled, and you could say from saving.
If you hadn't paid that 7.8% of your income to Social Security, would you have saved it? How about a 401K? That's free money (in two ways - matched funds and tax-deferred investing).selfAdjoint said:I get $1500 a month from social security, and that's what I live on. Oh, I should have saved while I was working? Yeah right! With what?
Only if you were really, really stupid (ie, greedy). The stock market is a far better investment than people realize.The idea that I could have had more if I had invested it is a counterfactual; I could also have lost it all.
russ_watters said:The stock market is a far better investment than people realize.
Mercator said:Anybody thought about what would happen to the stockmarket if everybody would put his money on it?
Sorry, being 28, my assumptions are from today, looking forward - I didn't know there were no index funds in the 60s. Be that as it may, there were diversified, low volatility mutual funds, weren't there?selfAdjoint said:Index funds weren't available throughout most of my career, so it's moot. And your assumptions are wildly off. I started in 1964 at $8000 per year, got a raise to $11,000 in 1968 and $18,000 in 1973. These were excellent salaries for the time. I went to $30,000 in 1980, $40,000 in 1986, worked at a consultant for $35 an hour from 1990 to 1995, $55,000 from 1995, $65,000 from 1998, $72,000 in 2000, unemployed and drawing Social Security from 2001.
I did take inflation into account. All my numbers are post-inflation. The stock market, for example, has averaged something like 12% over its lifetime or 8% after inflation - I used 8% in my spreadsheet. I consider it better to use today's dollars because while that $600,000 would be more like $1.5 million 40 years from now (guess), that number isn't one we can really comprehend - its tough to relate it to a real cost of living.Zantra said:I just wanted to also add that you have to take inflation into account. So 600K in today's dollars will only be worth a percentage of that in 30 or 40 years. 600K sounds great now, but in 30 years when it costs 20 bucks for a gallon of milk it won't buy nearly as much. If you're not staying ahead of inflaction and the value of the dollar, in addition to the 8-10 percent you're making on your investment, you won't be doing that great.
Phew - it'd be a wild ride initially, but it'd eventually settle down to a slightly higher growth rate than it has today. But the people who had their money in first would be filthy rich.Mercator said:Anybody thought about what would happen to the stockmarket if everybody would put his money on it?
The caveat is that buying based on the long-term "waves" as the author calls them still requires interpeting market signals (albeit fairly simple, clear signals). Someone who is investing for retirement shouldn't be trying to read the signals at all until they get within about 10 years of retirement.Dear friends, the key to successful long-term strategic investing does not rest in attempting to interpret endless day-to-day market noise. It does not rest in buying high and attempting to sell even higher, the so-called “Greater Fool Theory” advocated almost universally on Wall Street today.
The key to long-term investment success is to Buy Low and Sell High, and general market valuations as measured by P/E ratios and dividend yields provide the ultimate long-term buy and sell signals.
russ_waters said:Sorry, being 28, my assumptions are from today, looking forward - I didn't know there were no index funds in the 60s. Be that as it may, there were diversified, low volatility mutual funds, weren't there?
I should have been more specific about my point. Index funds should be timed and not just before retirement. So some thinking must be done. Here is a chart of the Dow, inflation-adjusted. Those who bought in 1929 and 1965 had to wait a long, long time before break-even. If at all before dying.russ_watters said:Aquamarine, that article has nothing at all to do with index funds and decade-term investing. They don't rely on boom-bust cycles for quick profit (or loss). In any case, the article doesn't say anything bad about index funds (I'm not sure what your point is). What it does say is perfectly consistent with super-long term investing in index funds. The caveat is that buying based on the long-term "waves" as the author calls them still requires interpeting market signals (albeit fairly simple, clear signals). Someone who is investing for retirement shouldn't be trying to read the signals at all until they get within about 10 years of retirement.
Quite frankly, that sucks, and I didn't know investing was that closed-off to the mainstream back then. I'm glad I have so much easier access to the market ($5,000 is all it takes to start an investment account).selfAdjoint said:None of the financial counselers in my earlier years ever talked about mutual funds at all. They were pretty crude at the time, heavily loaded, and not regarded as a significant investment. The people who talked about investing to me in the 60s talked about two things: investment clubs, and real estate. But investment clubs were not a way to make a significant amount of money, they were just a hobby, promoted by brokerage houses to get the fees. And real estate required a lot of up front risk. My best buddy maxed out his credits cards to buy a beat-up apartment building that he and his wife then sweat-equitied in fixing up, and he went on from there to bigger and better deals, leveraging equity on new purchases. For about five years he had a lot of tension, and then broke through into real prosperity. But I was never up for that.
There is a forumla for how much of your money should be in stocks based on how far you are from retirement (something like 20%+ the number of years to go), so it shouldn't have killed anyone (that said, my parents are near retirement age and were hurt more by the '98 drop than they should have been - its tempting to stay in when its time to get out). As bad as it looked on Monday (depending on how you look at it, it was as bad as 1929), it wasn't that bad in the grand scheme of things:BTW, a lot of the people I knew who did go strongly into the market were essentially wiped out in 1987.
I need to look into that graph some more - it doesn't make sense to me. If today's value is 10,000 and the inflation-adjusted value is 1,000, that's 1,000% inflation over 100 years - or 10% a year. Inflation historically has averaged more like 3%.Aquamarine said:I should have been more specific about my point. Index funds should be timed and not just before retirement. So some thinking must be done. Here is a chart of the Dow, inflation-adjusted. Those who bought in 1929 and 1965 had to wait a long, long time before break-even. If at all before dying.
http://www.dogsofthedow.com/dow1925cpilog.htm
selfAdjoint said:By paying into the system I was saving.
russ_watters said:I need to look into that graph some more - it doesn't make sense to me.