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re: Does the middle class not invest?
Posted on 7/19/20 at 9:44 am to rockchlkjayhku11
Posted on 7/19/20 at 9:44 am to rockchlkjayhku11
quote:
downsides to getting involved are that id like to continue building towards a down payment on a house in the next 12-24 months and that im fairly risk averse financially. how liquid can i remain? what should i do?
I'm not a money board expert, but focus on your short term goal of getting a house.
There are good loan options with 3%down (you need more than just the down payment saved, but that is your starting point).
Better loan options come at 5% down and 10% down. But you dont want to miss a low rate environment while you save for the down payment.
Dont worry about investing if your next investment is a home. Owning (in most cases) is better than renting. That is a great first investment.
1
Posted on 7/19/20 at 9:56 am to Ramblin Wreck
quote:
energy stocks....dividends
Exactly!
They aren't sexy but stable companies with 10% dividends.
Yes please.
Posted on 7/19/20 at 9:59 am to Privateer 2007
Not disagreeing totally, but some of those energy stocks have had very large dividend cuts recently. And there have been some very shitty stocks in the energy sector over the last year.
Just be smart with which ones you pick.
Just be smart with which ones you pick.
Posted on 7/19/20 at 10:00 am to BabyTac
quote:
I think it’s how people were raised
Agree. My dad is the most financially literate person I know and he taught me so much.
Then I found /r/PersonalFinance and developed my own interest in it all.
Can’t even begin to describe how good it feels to have your shite together. Knowing I can bring to the table not a single cent of debt, an excellent credit score, a very good salary, and a nice savings account is such a great feeling. You hear some horrible stories when it comes to relationships and debt.
This post was edited on 7/19/20 at 10:04 am
Posted on 7/19/20 at 10:05 am to jlovel7
quote:
She complains about how hard she has it but that she likes to get her nails redone at $60 a pop multiple times a month.
Could be a good investment for her if single. Few hundreds a month making herself look good could pay off with a nice allowance when she bags a man.
Posted on 7/19/20 at 10:05 am to notiger1997
quote:
dividend cuts....be careful
Absolutely.
Like you mention Exxon, BP, etc big integrated companies.
Refining too.
MPC is a rock solid company.
Valued at 24 billion or so. About to sell Speedway retail for 15-20 billion.
Massively undervalued.
Posted on 7/19/20 at 10:16 am to jlovel7
The middle class "investor" individually is small potatoes to the "investor class" Overall though, the middle class investor is squeezed . The cost of living has gone up and overall compensation has not matched the increase despite what some of the devotees on Hayek, Friedman and von Mises on this board will claim.
Cost of housing goes up
Cost of transportation goes up. That baw you talk of with the pick up truck is a small snapshot on the price inflation of vehicles. As the publis ,"demands" nrw bellas and whistles for their cars
One of the things keeping compensation down other than imported cheap labor is the retirement funds .....pensions and 401K types. Wall Street is more focused on making sure those accounts stay inflated than a 35 year old's checking account.
Cost of housing goes up
Cost of transportation goes up. That baw you talk of with the pick up truck is a small snapshot on the price inflation of vehicles. As the publis ,"demands" nrw bellas and whistles for their cars
One of the things keeping compensation down other than imported cheap labor is the retirement funds .....pensions and 401K types. Wall Street is more focused on making sure those accounts stay inflated than a 35 year old's checking account.
Posted on 7/19/20 at 10:18 am to LouisianaLady
quote:
Can’t even begin to describe how good it feels to have your shite together. Knowing I can bring to the table not a single cent of debt, an excellent credit score, a very good salary, and a nice savings account is such a great feeling
never change OT Posted on 7/19/20 at 10:40 am to LouisianaLady
quote:
Knowing I can bring to the table not a single cent of debt,
With interest rates this low, debt is a good thing to have. I’ve got well over a million dollars worth of debt and looking to double that in the next 3 years.
Posted on 7/19/20 at 10:58 am to nugget
If I haven’t bought a home... how much should I have in savings/401k by 30? 150-200k?
Posted on 7/19/20 at 11:11 am to Privateer 2007
quote:
People live beyond their means.
I joke with the wife that I'd bet we have highest income in subdivision.
People buy the most expensive car, house, etc they can get financed for.
Not sure who keeps downvoting this sentiment. My wife and I can afford a house that is roughly 500k on our current salaries at the "bank mortgage calculator" but it would be silly to jump into another 30 year mortgage.
I have people around me making the same as us that have a house that is 300 to 350k and a couple 70k cars. There is no way that they are putting anything away but they just keep on borrowing money.
Posted on 7/19/20 at 11:13 am to jlovel7
quote:
Well I’m firmly middle class right now and I’ve already got a nice portfolio started because when I first started out in the working world I made sure to dedicate a slice of my income to my required debts, to my required bills, to investing for retirement And savings, and then to anything else that were luxuries.
quote:You need to stop with the run-on sentences.
Thoughts?
Posted on 7/19/20 at 11:15 am to jlovel7
They don’t. The keeping up with the Jones’ is literally what kills wealth.
Posted on 7/19/20 at 11:16 am to jlovel7
Long way from a baller. OT poor.
I have a small portfolio - I jumped into the market in March because it was the first good buying opportunity in my adult life.
I have a small portfolio - I jumped into the market in March because it was the first good buying opportunity in my adult life.
This post was edited on 2/3/21 at 9:09 am
Posted on 7/19/20 at 11:17 am to jlovel7
In everyone’s mind, they will start investing once they get that next raise, or pay down that last credit card, or a kid graduates from private school, etc.
The trick is just to start. Doesn’t have to be much. Just set something to auto withdraw once a week. Once you train yourself to think of that auto draft as no different than a mortgage or car note in that that money isn’t yours and is already spoken for, you can really start ramping up contributions.
But to start? $25/wk. Just set up the account and start gathering momentum. That’s most of the battle.
The trick is just to start. Doesn’t have to be much. Just set something to auto withdraw once a week. Once you train yourself to think of that auto draft as no different than a mortgage or car note in that that money isn’t yours and is already spoken for, you can really start ramping up contributions.
But to start? $25/wk. Just set up the account and start gathering momentum. That’s most of the battle.
Posted on 7/19/20 at 11:49 am to jlovel7
quote:
I always see people talking about the investor class in opposition of the middle class. Well I’m firmly middle class right now and I’ve already got a nice portfolio started because when I first started out in the working world I made sure to dedicate a slice of my income to my required debts, to my required bills, to investing for retirement And savings, and then to anything else that were luxuries.
Does the middle class not invest anymore? Why did this become something associated only with the ultra wealthy?
The middle class is saving for retirement through 401Ks.
Are they saving the same amount as the "ultra wealthy", no. Is the middle class saving more than low income earners, Yes.
The white middle class is saving more for retirement than previous generations. 2/3 white middle class earners contribute to a retirement plan.
quote:
The shift from defined-benefit to defined-contribution plans has exacerbated racial and ethnic disparities. Black workers’ participation in employer-based retirement plans used to be similar to that of white workers, but black workers began lagging behind white workers in the 401(k) era, while Hispanic workers fell even further behind (Morrissey 2016). Only 41 percent of black families and 26 percent of Hispanic families had retirement account savings in 2013, compared with 65 percent of white non-Hispanic families
Posted on 7/19/20 at 11:55 am to TigerintheNO
Am I the only one whose portfolio consists of NASCAR commemorative plates?
This post was edited on 7/19/20 at 2:27 pm
Posted on 7/19/20 at 11:57 am to jlovel7
If a 401k and a Roth count, I’ll raise my hand.
My Roth is small. Like the OPs penis.
My Roth is small. Like the OPs penis.
Posted on 7/19/20 at 12:01 pm to jlovel7
Most middle class money is in 401Ks and the like. They pay ordinary rates on capital gains.
The biggest objection is the carried interest loophole, which allows hedge-fund managers to carry essentially their salary as capital gains and pay the 15% rate. That's pretty indefensible.
The biggest objection is the carried interest loophole, which allows hedge-fund managers to carry essentially their salary as capital gains and pay the 15% rate. That's pretty indefensible.
Posted on 7/19/20 at 12:33 pm to LSUtoOmaha
quote:
Why do you think the market is providing “a good deal” on these sectors?
Not sure if your question is sarcastic, but all three of these have huge investments and were hit pretty hard by COVID. People quit flying, driving, and can’t make loan payments.
Regardless, these markets will come back strong. They always do. We can’t survive without a banking industry. As third world populations and economies continue to grow, oil demand will follow. As mentioned earlier, just about everything you buy has something petroleum based in it. The shiny box with the frozen pizza in it that you buy has a wax coated box and chemicals in the ink that originated from oil. The plastic around the pizza is from oil. The US department of defense needs Boeing to be strong. Boeing needs airlines to be strong. Boeing at less than $200 a share is an great long term investment.
There isn’t even a possibility that those three industries will be allowed to fail. Without them, we would slip into being a third world economy.
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