Everybody tells us to save, pay off our bills, hunker down... Then they say... Go buy a car, home, lets go shopping... Kohls and Pennies are down. Maybe take a vacation?

WTF?

Ain't gonna happen, back to living pay check to pay check and trying to save a little for a rainy day.

The rate cuts are for companies to spend on production, you know so they can hire employees, increase consumption etc.

If everybody drastically starts saving, the market will crash even more, which will cause stock values to go down which will cause more panic.

Jesus Christ open a book.

Back to living paycheck to paycheck? Unless your income has dropped the only way you can go back to living paycheck to paycheck is if your spending or savings went up.

Dont give him any new ideas.

I know.

Just tell me what to do... Do I save and pay off debt... Or do I spend?

So you want me to do both.

NewsFlash: Most people can't.

If you're in debt, by all means pay it off. The interest rate cut is to prevent a complete cut-off of spending.

The fed isn't telling you what to do, it's just trying to stimulate whatevers left of the market. If most people put themselves in debt again because of a small interest rate cut, then their !@#$ing morons and will always be morons.

Spending has gone up and pay has leveled off if not went down.

Health cost up
Fuel up

Wages stayed flat.

Of course many "bridged the gap" (and wrongly IMO) with credit.

I agree. Pay it off if you want... Or walk away from your bad choices like others have.

Welcome to the American dream.

I say bring back debtor's prisons.

I am married with kids, not sure which is a bigger drain, the wife or kids.... but yeh and the economy doesn't help.

I agree. For failed business too!

Hey... I am not the one with a million dollar golden 'chute.

I am all for turning this fugger into a class war.

I am paying for it... Why can't I use my fists?

My wife and I made a decision long ago, before we got married, that we were not going to have kids. It makes a huge difference these days with how much is being spent on kids. When I was a kid (in the dark ages) we made due with a bike, a bat, ball and glove (and lots of times we just shared), a tin can and a sled in the winter. And those things were all good for several years and handed down. I'm not sure how it is in other parts of the country but here in Orange county people just need to have all the toys and the need to keep up with the Joneses.

I had a case just yesterday of a couple with a combined income of over $160k. They had a modest mortgage of around $1500 but they had all the toys. An RV, four wheelers, dirt bikes, brand new truck etc, etc. On that income they had only $3k in the bank and my rep had to squeeze them to save $200 per month. They were ok with retirement but if they lost their jobs they had three weeks of fixed expenses put aside and no life insurance. They had no idea where their money was going and kept saying "we don't have to do anything right?". I understand the paycheck to paycheck thing for some people. But for most it's a spending issue. They're just out of control.

No not for businesses. That would reduce the risk that many people take to start a business and succeed. Maybe there could be a failed business court. The verdicts are: Nice try you worked hard and dumbass, you're going to jail.

Which is why the absolute best advice you can give someone entering the workforce is to put at least the minimum to get full company match in their 401k, and everytime they get a raise they should put part of that into their 401k as well until it is maxed out.

If you never see the money in your pocket and never get used to spending it, it is a lot easier to keep yourself living w/in your means, and setting yourself up to actually be able to afford to retire in 40 years.

I had to walk up hill BOTH WAYS to school in the pouring rain and whipping snow!



And yes... I sort of agree with you. Again, should I spend or save. What happens like meazza said when we stop spending?

You know what? The sad and disturbing thing is that the economy actually needs people to be out of control.



And:

No not for businesses. That would reduce the risk that many people take to start a business and succeed. Maybe there could be a failed business court. The verdicts are: Nice try you worked hard and dumbass, you're going to jail

I figured you would say that. I like the idea about a failed business court though.

I also corrected it to:

The verdicts are: Nice try you worked hard, got sick you dumbass, you're going to jail.

I was also wondering if people can allocate their money into different funds themselves... Are people offered a place to put their money into a safe, no risk fund? Working for the gov't, I know that is one thing I can do... Pull it all out of the risk areas and plop it into a no risk fund. The great thing now, is everything can be done online and daily... Not like the past where there was huge waiting periods.

That's not necessarily a good thing. Many times it's a bad thing. Pick a diversified portfolio, dollar cost average as much as you can (at least the match if one) and rebalance annually. Saving long term is a marathon not a sprint.

This is great advice and is something I have adhered to for some time now. I work for a Fortune 500 company with over 25k employees worldwide. There was a retirement seminar at our site last year where we were told almost 25% of US employees do not participate in the 401k plan at all!! WTF??? I was shocked that people would be that stupid to throw away free money by not at least contributing to the company match.

Thanks.

Like I posted before... Stocks have outpaced gov't securities in the last ten years by under 1%. Now with all this happening, I have a gut feeling that what you say may not be the truth... I think times are changing, more people retiring, etc.. etc.. I fear people are in for a rude awakening. We heard how real estate ALMOST always gains... That got blown out the window.

I just don't believe what they are saying... I don't want to play the game that is such a con, for what 3% over the long haul.

I would rather stay steady at 4-5%.

IMO

We don't necessarily have to be out of control to keep consumption at a normal level. It's just that the second people make a bit of money, it's already gone on a fancy new car or god knows what.

I'll give you an example. I post on an analystforum for people doing their MBA or CFA as well as other finance degrees. There was one guy who posted about a year ago. He said, "Last year, I was making 280 K as an Ibanker but I lost my job due to being involved with one of the big banks (hint Bear) and now I have no money left because I have no job. What do I do?"

How does someone who makes 280 K which is about 5 times my salary go from that much to zero so quickly? How does one not save at all? You don't have to put away 280 K but FFS, put that 100K aside a year and you'll be pretty fine for a rainy day.

The only people that were saying that were people in real estate. Stocks have outpaced gov't securities by only 1% the last ten years? Where are you getting that information?

Correction... I am sorry... The fund in my retirement that is linked to the Dow Industrial.

I cry Bullschit. A $1500 mortgage in the OC? Do they live in a studio?

But seriously, I see that all around me here in SoCal. except most don't have that income and pulled funds for the toys out of the 2nd on their house. Fuggin idiots!

I am blessed to have the toys mentioned above and two kids to boot. I am also fortunate to have a wife who does well working, but those little monkeys of mine sure are money drains. I pay $1200 a month just to put them in a Christian school. I told my wife that this may not be forever and we may have to consider putting them in public if things get bad. She doesn't want to hear it though. Women- can't live with 'em, can't shoot 'em!

No they actually live in a SFR in Huntington Beach. Not everyone bought the $800,000 home here.

Sorry, I disagree on that. The rate cuts are a signal to the markets that the world's policymakers realize this is serious, and they intend to do whatever's necessary.

Well then they've done at least one thing right. They are probably in the minority or at least purchased before things went nuts.

I agree that it is a message but the bottom line is people don't shut the door completely on spending and companies stop profitable projects because they can't borrow any money.

No they're not totally messed up. As I mentioned they are doing ok with retirement but their monthly budgeting is whacked. My rep said they told her that some months they get their pay check and just tack them up on the refrigerator until they need money.

By the way I'm part of that minority too.

With this whole housing mess... What part of people getting inheritence had on shooting for the stars with expensive houses?

Is that really a factor?

Why did we just have a lot more people die the past couple of years than usual?

No. But, older parents are dieing and leaving more and more to their children than they ever have. No?

I know our ex-neighbors a few years ago inherited a bunch of money and ploped it down on a 350k house when they were living in a 150k house.

Now more power to them... But, I wonder what kind of factor that plays on things.

In this case the minority wins! BTW, who still gets checks?

The people who still write them in front of me at the grocery store.

Simple. If he made 280k, my guess is his base salary was about 100k, with 180k in bonus. 100k base is not much to live on in NYC, think 50k in Buffalo, it really is comparable.

That bonus splits out to, my guess, 130k-150k in cash and 30k - 50k in restricted stock options (Bear was notorious for giving these out). The restricted stock options he got last year would have been virtually worthless. Bonuses are taxed at 43% in NYC, you see 57%. He would have seen about 75k on the bonus. Now, the question is...did he make any big ticket purchases (NYC apt, engagement ring etc.)?

Not defending him, but just saying...it could happen quickly.

Dude, is it hot today or what? This is one of those rare occasions that I wish I had AC in my house. Damn!

It'll cool off quite a bit this weekend...but then again, the Santa Anas are coming this weekend, too.

It's nice and cool in my office.

I agree somewhat. I live in Montreal so the cost of living is higher than Buffalo but obviously lower than NYC.

Chances are he didn't only work for one year, and did an Escalade become a part of his big ticket item?

Obviously when you make more money, you get accustomed to a better standard of living but you need to simply build a good nestegg. Rainy day's happy to everyone.

Very true.

Yea, well you're one of those Wall St. fat cats who can afford the AC. How 'bout kickin down some jack to us po folk so's we can git a little sum sum? /sarcasm

Back on earth in So. Cal.-it's still hot! I'm actually working from home so I've got the fan on high...

Maybe there are still people in this world that have to float a paper check for a day or two till payday?

No, it's easier to max out a credit card than post-date a check nowadays.

Most people who write checks at the grocery store are just being dicks.

I still write checks at the grocery store. The supermarket I go to will ask you if you want them to print it out... I say no!

But, then again... I usually have everything written out except the amount!

I don't think anyone explicitely answered your question:

Yes. Most profit-sharing plans and 401k's offer a variety of funds with different philosophies and balances.

Thanks.

I know an older fellow at work that is probably messing things up royally... He is constantly moving things around here and there... The good thing is that I think you get so many transactions within a certain time frame. It is almost comical! I came in to work and wondered what the Dow closed at, because I was away from the TV for a while... Of course this co-worker shouted out today's closing number.

He is gonna spoil the nice way we do interfund transfers and allocations... Just like when they stopped allowing people to have two personal loans out on their account when Bush got in... Oh and put a waiting period and 50 buck fee on loans.

I agree... It is the "jugglers" that I think are phucking things up.

Come on man they need to use credit. It's the American way.