re: Why are so many people broke by the time they reach senior adulthood?

quote:

---

Not everyone has the education for high paying jobs that allow for savings along the way. Also, not everyone had jobs with retirement benefits and couldn't afford to or didn't pay into 401k type accounts.
I for one am retired and only have my monthly SS check like many others do. Yes I am a poor, living in a mobile home and off my monthly SS check and deal with it. So I guess I'm classified as white trailer trash in most eyes.

---

That's what people need to realize, not everyone earns enough to fully drop 10-20% into a retirement account.

Even a 401k of $200,000 won't go very far, especially over 30 years.

The idea of not downsizing and not needing SS is only for a very small % of people who live to 90.

One would need a retirement account of ~2 Million to maintain $100k in post tax spending (25 SS, 75 Retirement) Inflation/ROI mileage may vary.

quote:

---

Yes I am a poor, living in a mobile home and off my monthly SS check and deal with it. So I guess I'm classified as white trailer trash in most

---

Is your home government subsidized in any way?

quote:

---

ou have 65 years to prepare for retirement and you have no savings, can't pay rent, and your only income is SS. How does that happen?

---

For some it is called life, e.g. medical issues that resulted in catastrophic expenses coupled with health insurance lifetime maximum or a life sustaining drug or treatment that insurance does not cover, life often brings unexpected tragedies beyond one's control.

quote:

---

Worked my arse off. Did without. Stayed out of debt.

Paid first house off in under 2 years.

Most most people are willing to do those things. Some are

---

Purchase Price?
Size?
Salary at time of Purchase?
Mortgage size?

I only grew up in my house with my boomer parents so I can't speak for anyone but myself-

My boomer parents both worked and brought in a middle class income, and were extremely frugal. My father never paid for car repairs, or any home repairs or improvements, or any type of lawn care. He did hire a tree guy once, I'm sure that hurt him emotionally. The thought of paying someone to do something you can do yourself was a foreign concept. Eating out was for special occasions, that included fast food. 99% of meals were made in the kitchen. My brother and I were both on scholarship at UGA because we were raised right and valued good grades, significantly diminishing what they had to spend on us in college. There was 1 vacation a year to Destin, my mother insisted we splurge on a nice place so my father lost that battle every year, but all breakfast and lunch was made in the condo kitchenette, and a couple of dinners. This type of frugality combined with aggressive savings over a 40 year career has made them millionaires. My mother is deceased, but my father has his house paid off and the SS and RMD's he gets from his 401k far exceed is monthly expenses and he just reinvests it. He never won a lottery, he never inherited any money, he just worked a middle class job (accountant) for 40 years and saved his money.

quote:

---

Or you invest in investments that pay dividends.

---

They run lower growth, so the company valuation doesnt rise as fast.

If you hold enough that you can live off 100k dividends post tax then you own a huge amount of stock. (5 Million at 2%)

No one with a normal job is going to be able to put that much into a dividend only stock investment.

Might as well say they should have went all in on NVIDIA.

It happens because my contemporaries lived it up while I was saving money and letting my savings grow.
I lived frugally and seldom had bucket list vacations; heck, I never even had meals at the famous NOLA restaurants.
I don't know where their decision making came from; mine came from knowing that I had to be responsible for myself because no body else would be.

quote:

---

I'm not talking about bonds. There are plenty of ETFs out there that produce dividends and grow significantly.

I worked a W2 job my entire career, but I also saved my entire career. It doesn't take saving a lot of money to have a lot of money over 35 years.

---

So lacking on details on your end, but most dividend stocks are down in the 2% range.

If you want to say OMG you should have invested in the right ones, my response is OMG you should have invested in NVIDIA.

I'd like to see your math about how much salary how much invested in dividend stocks, and what their rate is per year to see what your "passive income" would be.

If you want to get specific, you don't invest in dividend stocks when you are growing your portfolio while working. You can, but it's not recommended.

Use a simple monthly compound interest calculator to figure out how much you'll have at the end of that growth period where you move into income.

$100/month invested over 35 years at 10% interest will get you $380K.
$200/month invested gets you $759K.
$300/month invested gets you $1.1M.

If you're investing a percentage of your income then obviously it will be less up front and more on the backend. However, the point remains that you can make a lot of money by just investing regularly. If $100/month represents 10% of your take home pay then it implies you make $1000/month or $12K a year net and approximately $15K-$17K gross per year. Is that doable? Uhhhh, yeah.

If you want to talk about generating income from this pile of cash, then pick your poison. I use an aggressive income approach that zero financial advisors would suggest using. Pick a combination of things. Total bond funds, covered calls, maybe even some growth, and rebalance periodically. I wasn't an average investor while growing my money and I'm not an average investor making income with my money -- but I take risk that others can't.

However, don't tell me you can't save and get a terrific nest egg for retirement. It doesn't take a high paying job. It just takes doing it.