How many of you live paycheck to paycheck?

[yg17]

Yes, because at most you should have one month's worth of acummulated credit card debt. Anyone who doesn't pay of their credit card bill in full every month is asking for trouble.

Bingo. I take advantage of all of the perks my card offers and haven't paid a dime in interest or late fees. If I were to lose my job today, at the most I'd have about $300 in purchases accumulated over the past month that I would have to pay off to get my balance down to zero.

The people who carry a balance to buy expensive stuff, thinking they'll pay it off over time, are the ones who get in trouble when they lose their job and have a $5,000 balance at a 20% interest rate.

 

[acidfast7]

Yes, because at most you should have one month's worth of acummulated credit card debt. Anyone who doesn't pay of their credit card bill in full every month is asking for trouble.

I agree 100%. The concept of people who catch a "bad break" may need to use a credit card is ridiculous. Buy what you can afford

The only time I use a CC is for online purchases where they won't accept a direct bank transfer for payment (which is quite common in Europe). This is usually when I buy English books from Amazon.co.uk (they won't accept direct transfer from a German bank) whereas Amazon.de will (but they have a smaller selection of English books).

 

[EricNau]

You are the rare ones. 78% of people out there do not pay their balance in full. This is according to the credit cards table of probabilities. They know this and that's why they give "free" stuff and points. In the end they didn't give it away for free. Perhaps that's why people are so ticked at big banks lately?

You're right. Most people don't use their credit cards responsibly, and they get into trouble for it.

But I don't think it's productive to discourage others from using or obtaining a credit card, but rather, encourage them (and teach them) how to use it responsibly.

Used responsibly, a credit card is vastly superior to any debit or check card (for all the reasons that have been mentioned in previous posts). Cash back. Free extended warranties. Free flight insurance. Fraud protection. Build your credit score. etc.

It's not the credit card's fault; credit cards don't have an inherently evil property. Others should be taught to use them responsibly to avoid the problems you've mentioned, not taught to avoid credit cards altogether.

 

[Gregg2]

I'm among the 22% also. Those seven deadly sins of CC usage have been answered quite well. I'll just say that if a CC company wants an annual fee, they can't have my business.

 

[dmr727]

I'll just say that if a CC company wants an annual fee, they can't have my business.

There are cards out there that charge an annual fee in exchange for a credit line for folks that normally can't get credit. For those, I completely agree. But there are some cards, such as many from American Express, where the fee could be worth the extra benefits the card provides. It just depends on how you use it.

 

[Demosthenes X]

So what your saying is if someone lost their job and got into credit card trouble because they now can't pay it, is that their idiots? Perhaps your right. Now they have two big problems. A debt crisis and a job crisis.

Now on the other hand if one payed with real money and not debt and then lost their job would now not get bent over by any debt. Now they can only deal with one thing... their income crises which can be sorted out immediately with a job. Immediately in the sense delivering pizzas at night or such while looking for their replacement job during the day.

This is silly. If you treat a credit card like a debit card (i.e., don't spend money you don't have in the bank), then you won't wind up in the situation you describe. In my case, I try and spend only what's in my chequing account. If I somehow got into trouble, I can dip into my savings account. But the point is not to spend any more on the card than I have available in my chequing.

You are the rare ones. 78% of people out there do not pay their balance in full. This is according to the credit cards table of probabilities. They know this and that's why they give "free" stuff and points. In the end they didn't give it away for free. Perhaps that's why people are so ticked at big banks lately?

Demonstrating that people should learn to use credit cards responsibly. Not avoid them all together.

I'm among the 22% also. Those seven deadly sins of CC usage have been answered quite well. I'll just say that if a CC company wants an annual fee, they can't have my business.

The math on an annual fee depends entirely on your usage. For some, they spend enough on the card that they make back more than the cost of an annual fee. This is, I think, especially true for small business owners, who might put everything on the card and thus come out ahead.

 

[Gregg2]

The math on an annual fee depends entirely on your usage. For some, they spend enough on the card that they make back more than the cost of an annual fee. This is, I think, especially true for small business owners, who might put everything on the card and thus come out ahead.

Well, I more than make back the cost of the typical fee with my no fee Discover card. But that doesn't change my position. Those who have a Discover card may wonder how I can have one with no fee. I'm a "charter member", an early adopter back when Sears first issued the card.

Several years ago, they tried to trick me into a new card with double the cash back but with a small fee. I bit, and I used that card almost exclusively for quite some time. Eventually, they scaled back the percentage of the cash back to the same as for the old card, which I still have. I cancelled the newer one immediately.

 

[Ca$hflow]

Wow, America sure does love debt. It's interesting that in Australia almost every family has over a million dollars in their retirement plan. In America, most retirement plans are empty.

 

[Demosthenes X]

Well, I more than make back the cost of the typical fee with my no fee Discover card. But that doesn't change my position. Those who have a Discover card may wonder how I can have one with no fee. I'm a "charter member", an early adopter back when Sears first issued the card.

Well, yeah, if you can find a no-fee card that equals or exceeds your return from a fee card, then that makes a lot of sense. But if you can wind up better off with a fee card, it seems silly to forgo the benefits.

 

[miles01110]

Wow, America sure does love debt. It's interesting that in Australia almost every family has over a million dollars in their retirement plan. In America, most retirement plans are empty.

Cite your source for this tidbit, please.

 

[Doc750]

Wow, America sure does love debt. It's interesting that in Australia almost every family has over a million dollars in their retirement plan. In America, most retirement plans are empty.

I call ******** .....

 

[acidfast7]

I call ******** .....

If it's like Germany's plan, 9.95% gross mandatory + 9.95% company mandatory + 1.65% voluntary + 7.45% match (or roughly 29% of gross per year) at an average gross wage of 50k€/year times 20-70 or 50 working years.

So, roughly 15k€/person/year or 30k€/couple/year, assume 2-4% wage increase/year and 2-4% interest, it's not hard to imagine 700k€/1M USD/family, especially if the average age of parents in a family is 40-45 (they have been working 20-25 years).

Also, don't forget how large salaries are in AUS dollars, most salaries I see in my profession are at least 2.5x US salary and 1.5x EU salary. He probably directly converted AUSD to USD.

EDIT: I should add the most fiscally responsible people I know also save another 10% of their net (roughly 5-6% of gross) privately (totaling about 35% of gross saved / year).

 

[Ca$hflow]

Cite your source for this tidbit, please.

In order to get to the source you'll need to register and log into the site. Then after read the Online Exclusive Update #108 - The #1 Skill of an Entrepreneur. In it explains the retirement savings of Australia and America.

http://www.conspiracyoftherich.com/ReadTheBook/TableOfContents/current.aspx

----------

If it's like Germany's plan, 9.95% gross mandatory + 9.95% company mandatory + 1.65% voluntary + 7.45% match (or roughly 29% of gross per year) at an average gross wage of 50k€/year times 20-70 or 50 working years.

So, roughly 15k€/person/year or 30k€/couple/year, assume 2-4% wage increase/year and 2-4% interest, it's not hard to imagine 700k€/1M USD/family, especially if the average age of parents in a family is 40-45 (they have been working 20-25 years).

Also, don't forget how large salaries are in AUS dollars, most salaries I see in my profession are at least 2.5x US salary and 1.5x EU salary. He probably directly converted AUSD to USD.

EDIT: I should add the most fiscally responsible people I know also save another 10% of their net (roughly 5-6% of gross) privately (totaling about 35% of gross saved / year).

There you go. You won't see any german retired citizens eating alpo. That is why germany is the most financially sound out of all the european nations.

Germany bailing out greece would be like you bailing out one of your financially irresponsible inlaws that racked up their credit cards. Would you bail them out?

 

[acidfast7]

In order to get to the source you'll need to register and log into the site. Then after read the Online Exclusive Update #108 - The #1 Skill of an Entrepreneur. In it explains the retirement savings of Australia and America.

http://www.conspiracyoftherich.com/ReadTheBook/TableOfContents/current.aspx

----------



There you go. You won't see any german retired citizens eating alpo. That is why germany is the most financially sound out of all the european nations.

Germany bailing out greece would be like you bailing out one of your financially irresponsible inlaws that racked up their credit cards. Would you bail them out?

I should point out that in Germany, an account is NOT established with a particular person's name on it. However, in other countries, such as the Netherlands, this is done and your pension comes directly out it (and the mandatory percentages remain similar, so 1M USD/700k€ would not be unexpected, on average.)

 

[acidfast7]

Germany bailing out greece would be like you bailing out one of your financially irresponsible inlaws that racked up their credit cards. Would you bail them out?

If I could sell them something after, yes.
If I could loan them money again and generate interest on it, yes.
This is essentially what Germany is doing.

 

[mkrishnan]

So, roughly 15k€/person/year or 30k€/couple/year, assume 2-4% wage increase/year and 2-4% interest, it's not hard to imagine 700k€/1M USD/family, especially if the average age of parents in a family is 40-45 (they have been working 20-25 years).

That's good, but that wouldn't be the average family -- that would be the average person at the time of retirement. 2008 numbers pegged average Australian net worth around $250k. It's hard to go from an average total individual net worth of $250k to an average size of retirement assets at four times that. Plus those averages are heavily pulled down by the fact that most people are not at retirement age, even in greyed countries like the US and Australia (I don't think there's any country where the average 30-something has $1M USD in retirement assets).

In trying to find a comparable numbers for the US, I found a 2010 estimate putting mean net worth around $180k per person, although I found a wide range of estimates.

These are all means, and as such are distorted by income inequality / distribution, but still, I don't see a basis to suggest that the retirement assets of the mean Aussie are 6 or 7 times the total assets of the mean American.

I don't live paycheck-to-paycheck, and I do think Americans need to be saving more, and I also think that a purely do-it-yourself system like the American 401k system is not working, but I'm skeptical of some of the numbers being tossed around in this thread.

 

[iSaint]

Aside from the fact that I have a job and little debt, I'm probably in the worst shape one could be in for a 48 year old.

I'm a teacher in the US, so my income isn't good to begin with. I'm a divorced single father with custody of my two kids. Before the divorce we were in a pretty good position monetarily. However, my wife's drinking habits shot that to heck. We spent a lot of money trying to get her better, but that's another story.

All my father ever taught me was how to borrow to get what I want. He died penniless with social security as his only income. He left no life insurance. My mother now lives with me since she also lives on her social security only.

Currently I'm putting 14% into mandatory retirement. I have no other savings. I have some debt, but it should be cleared within a year. My car is paid for but will need some work soon. My daughter is headed to college. Fortunately she has the grades and ACT score to go to the local junior college for free for two years.

I'm not prepared for any major change in life, let alone an emergency.

All of this to say it's my own fault. If I continue to teach twenty more years I'll have a decent retirement with social security, if it's still there.

Sucks to be me, so prepare now so you won't have to.

 

[Ca$hflow]

I don't live paycheck-to-paycheck, and I do think Americans need to be saving more, and I also think that a purely do-it-yourself system like the American 401k system is not working, but I'm skeptical of some of the numbers being tossed around in this thread.

The 401k system is the worst system and not working because of the tax component. This video in the link below will explain this. It's very insightful.

http://web.gbtv.com/media/video.jsp?content_id=19850509&topic_id=&tcid=vpp_copy_19850509&v=3

 

[acidfast7]

That's good, but that wouldn't be the average family -- that would be the average person at the time of retirement. 2008 numbers pegged average Australian net worth around $250k.

No. Your numbers are way too low for an EU country (probably dependent on your definition of "Asset.")

Actually, my numbers are per year. The average parent is 45 years old in Germany, meaning that the average person has worked for 25 years (at least) and will most likely work for 25 more. The median aged parent (45) would have 25x15k€/year or 375k€ (500k USD) in the mandatory system alone. In addition, most people save 10% of net income (5-6% or gross), therefore, they have 500-550k€ more realistically (700-800k USD). This is if a single parent has worked. It would be quite easy for the other parent (assuming 2 parents for a family as stated previously) to amass 150k€ (200k USD) by working 5 or 6 years (18-24) before leaving the workforce to take care of family full time.

These rough calculations are done for a family with one parent that made median wage (roughly 50k€/year) of median age (roughly 45) work worked 25 years (20-45) and the other that worked for 7 years (18-25) and then left the workforce.

source is here:

http://www.nationmaster.com/country/gm-germany/Age-_distribution

 

[mkrishnan]

No. Your numbers are way too low for an EU country (probably dependent on your definition of "Asset.")

I'm confused...are you talking about Australia or Austria?

 

[acidfast7]

I'm confused...are you talking about Australia or Austria?

I originally stated that for any country that has a reasonable pension-style system (i.e. not the US), 1M USD in retirement funds for someone 45 is not unreasonable at all. Whether AUS has a reasonable system (like Germany) or an unreasonable system (like the US), or is somewhere in between, is a different question.

 

[Ca$hflow]

If I could sell them something after, yes.
If I could loan them money again and generate interest on it, yes.
This is essentially what Germany is doing.

I'm no so sure about this. Would you give a drunk a drink?

As far as germany is concerned, they have taken the printing presses away from greece when the EU was formed. Before greece had the ability to print more money and dilute the money supply which thus was able to pay dept easier. Now greece can't do this and now has to pay with real money NOT fiat money.

 

[acidfast7]

I'm no so sure about this. Would you give a drunk a drink?

As far as germany is concerned, they have taken the printing presses away from greece when the EU was formed. Before greece had the ability to print more money and dilute the money supply which thus was able to pay dept easier. Now greece can't do this and now has to pay with real money NOT fiat money.

lol

the only hope for Greece as a country, is to start the printing presses again, devalue the currency, gain an export advantage and return to financial profitability.

otherwise, they have huge austerity plans (40% salary cuts versus 18 month ago.)

personally, as someone living in germany, i like they should leave the €/EU, default, devalue and become competitive again (that way they can buy more German exported goods.)

yes, I would give a drink to a drunk, for a price (countries must engage in economic warfare, or else nothing becomes more efficient - i.e. reduced in cost).

 

[interrobang]

You men as a debit card, of course.

Pretty sure he means a charge card (funds due at end of month). Not a debit card (funds deducted immediately) and not a credit card (payed over time with interest).

 

[Eidorian]

At least 25% into savings with every paycheck.