<p>My personal perspective is that it seemed to me that the money went out of my pocket much faster when we were younger and the kids were younger. No idea why because I am ridiculously cheap, but there always seemed to be SOMETHING when the kids were little or a broken furnace or some other necessity. Thankfully, we’re past the expensive kids phase except for tuition and music lessons for his majesty.</p>
<p>People who make lots of money may not “save” in the traditional sense (like by opening a money market account), but often they own substantial assets in the form of real properties. If you’ve got a million extra dollars, why leave it sitting in an investment account when you can purchase and enjoy a couple of vacation homes which will enhance your life experience while also preserving your assets? Both forms of saving are subject to unpredictability; if the stock market crashes you end up with nothing, but if the housing market crashes, at least you got to spend some quality time with your family skiing or at the beach, and you’ve still got some land under your feet.</p>
<p>Bay, you make good points. But the “poor” people in the article work in the financial sector. Shame on them if all their “savings” is tied up in real estate these days. They should know about diversification better than I do. </p>
<p>Really, if they’re relying on the bonus check to make ends meet, then they’re living above their means. </p>
<p>Good grief, if education’s important, they should at least keep enough liquidity from year to year to cover tuition.</p>
<p>I commend you jym626, frugality is not “cool” these days, but it is extremely important. And I must say, that is very impressive, you are very careful savers, and that is very commendable. I hope all is well now.</p>
<p>And I wasn’t saying that all middle/upper class folk shouldn’t sent their kids to private schools, I was just saying it troubles me when these people fail to spend wisely.</p>
<p>And I agree with Bay, if you have enough money to enjoy certain luxuries (while remaining economically responsible) go ahead. Life is meant to be enjoyed as long as it does jeopardize one’s financial safety.</p>
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<p>Ah yes…again…choices. If it comes to the vacation home(s) and private school tuition costs…then make the choice of what is more important to you. Don’t whine that you can’t have it all.</p>
<p>Some people like having vacation or rental homes and some hate it. I am in the latter group. We had a rental property once and being young and not familiar with the process made some mistakes along the way by being too nice and even though we vetted the tenants and potential lease/purchasers it was an all around bad experience. Even though I know much more now about how to do that, I would not. I have great respect for people who like that stuff. Not me. We had to take back posession of a property, evict them (they were already gone anyway) and fix up the property they trashed. What a major hassle. We sold it at a loss 
And owning such properties (vacation/rental) comes with additional expenses (maintenance, taxes, utilities (if not being handled by a tenant) or having to turn back on utilities and pay back bad debt left by a tenant, possible management fees, etc.) yuk yuk yuk.</p>
<p>As for expenses, yes the kids were expensive and incomes were lower then (well at least my DH’s income was lower-- mine has gone in the opposite direction due to the state of healthcare) , so perhaps it seemed like a bigger bite out of our wallets. But even with both expected and unexpected expenses, it is doable to live below one’s means and still live comfortably. We have drilled into our s’s the importance of starting to save early. Our younger s talked about being the only one of his friends with a Roth IRA. Hopefully he will continue to contribute to it. Soon he will be off the parent payroll. Yay, no more major offspring expenses (hopefully)!</p>
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<p>Real estate doesn’t always preserve your assets. </p>
<p>“So he sold his remaining stake, bringing his gains to about $100
million. …”</p>
<p>“Over the last several years, Mr. McAfee began to put a large chunk of
his fortune into real estate, often in remote locations. He bought the
house in New Mexico as a playground for himself and fellow
aerotrekkers, people who fly unlicensed, open-cockpit planes. On a
157-acre spread, …”</p>
<p>“In 2007, Mr. McAfee sold a 10,000-square-foot home in Colorado with a
view of Pike~s Peak. He had spent $25 million to buy the property and
build the house. He received $5.7 million for it. …”</p>
<p>"His remaining net worth of about $4 million makes him vastly wealthier
than most … "</p>
<p>[After</a> a 30-Year Run, Rise of the Super-Rich Hits a Wall - NYTimes.com](<a href=“http://www.nytimes.com/2009/08/21/business/economy/21inequality.html?pagewanted=all]After”>http://www.nytimes.com/2009/08/21/business/economy/21inequality.html?pagewanted=all)</p>
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<p>I don’t recall the stock market going to zero.</p>
<p>If you put your money in derivatives, you could lose everything. Or if
you put all of your eggs in a basket that goes belly-up, then you could
lose most.</p>
<p>But crashes don’t happen overnight. They usually take a while and there’s
usually plenty of notice that they are under way.</p>
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<p>You could just rent a place too.</p>
<p>The problem with penny stocks and real estate is liquidity. Real
Estate in a secular bull market works because you have plenty of time
to get out. It’s like a roach motel in a bear market though.</p>
<p>Thanks, aahs. Actually I think frugality is very cool these days. Whats that line? The paid off mortgage is our generation’s version of the beemer?</p>
<p>If we all become overly frugal, the economy and job markets will tank further,… Frugality is good,but not good if we All do it</p>
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<p>It’s been cool for a few years.</p>
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<p>The frugality will result in savings and pent-up demand for goods and services. That’s when you start new secular bull markets.</p>
<p>Ahhh, qdogpa…the Paradox of Thrift</p>
<p>In the mean time we lose jobs…as when we stop spending,goods and services are not purchased,companies generate less profits,lay people off,…frugality has not worked so well in Japan. ;)</p>
<p>And japan is the path i am afraid we are following</p>
<p>I have a question, as my DH and I have been having this conversation for a while now. How much would you consider is “enough” in savings/investments to retire? Yes, I know it depends on location and fixed costs and commitments like caring for family members, yadda yadda, but in general, ballpark number, what/how would you decide what is “enough” so you don’t outlive your cashflow? My DH will eventually have a small pension from his old company that he retired from a few years ago, but there is no option for guaranteed health insurance, so one of my key issues in the retire/dont retire discussion is availability of healthcare. Personal plans are, IMO, risky and expensive if one gets sick. But lets not get sidetracked about that issue.</p>
<p>I really would love to hear how poeple decide when they are comfortable enough financially to retire. My DH feels we can count on a 6% return on investments. I say we should be conservative and say 4%. While we own our current home, if the kids both end up relocating across the country, we might consider moving, and the housing and COL is much higher there. Help! It’s hard IMO to figure out how much is “enough”, and I don’t want to have the kids worry that they woudl have to subsidize our expenses. Is there a decent, easy to follow formula? My DH has run some of the retirement programs and says the $ he has in his head is fine. I worry. But thats me.</p>
<p>We are fortunate that my husband has a state and local tax free pension that is very large, along with lifetime medical/dental/vision for him and me in his lifetime. He receives an additional annuity at retirement and has whatever his equivalent of a 401k account is. I’m in my middle 40s and have almost a million dollars of my own in my 401k, and we have no debt except a mortgage which is not excessive. If we continue to be cautious and catastrophe doesn’t strike, I will retire at 62 and he will retire at 55 and our house will be paid off if we stay here, which I hope we won’t.</p>
<p>IMO frugality has always been cool. The gen-x’ers who bought and bought were foolish, IMO. We are frugal, but not cheap. We prioritize. We value education so put the cost of that as a priority. We don’t spend what we don’t have, we pay our bills in full every month, and we keep cars for quite a while (or until someone demolishes them, an unfortunate issue in my family-of-guys-who-break-stuff.) But we do more than our fair share to contribute to the economy, I assure you.</p>
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<p>The unemployment rate in Japan was last reported at 4.6 percent in
December of 2011. From 1953 until 2010, Japan’s Unemployment Rate
averaged 2.60 percent reaching an historical high of 5.60 percent in
July of 2009 and a record low of 1.00 percent in November of 1968. </p>
<p>[Japan</a> Unemployment Rate](<a href=“http://www.tradingeconomics.com/japan/unemployment-rate]Japan”>Japan Unemployment Rate)</p>
<p>I think that we’d be pretty happy if we had the unemployment levels
that Japan has had for the past 60 years.</p>
<p>Anyone remember “Christmas Vacation”?</p>
<p>jym - I crunch and look into those retirement numbers all the time. The safe withdrawal rate is 4%. Keep in mind you have to keep up with inflation, pay taxes (and obama wants to double it) and make enough to live on. Traditionally sticking to 4% will last you 30 years, regardless of how much of a pot you have to start with. However if you retire before 65 you will spend more then you will once pensions and ss kick in.</p>
<p>That means the overall dollar figure is irrelevant. For me personally, I wouldn’t want to retire unless my kids college funds were covered and my house was paid off. Then that number drops even more.</p>
<p>It depends on what you want out of life. I prefer to live within my means, not below my means, and spend as much of my money as I need to, to experience the maximum out of this life with the resources I have earned (I don’t believe in an afterlife). I enjoy travel, living in a nice house, and buying quality things and healthy food. I don’t want to be a burden to my kids, and that is a top priority. I’d like to leave a little to my kids, but that is not a priority. A good portion of a large estate will likely end up with the government, so I’d rather spend it supporting private businesses now. I’m with barrons that life isn’t all that unpredictable; I’ve only got 30 years left max, and at least 10 of those will be spent in a chair watching TV most of the time.</p>
<p>Agree with Bay,your pile of money when you are in mid 70’s is useless…i figure i also have 30 years or less left on the clock…20 of them should be very good to good,the last 10 are crap shoot, and even if i am healthy, the need or want to enjo life to its finest will likley be minimal</p>