Maybe I am off-base for this one, but most people I know here are:
Waiting before their career/finances are stable before having kids
Ditto for houses
Even more ditto for marriage
Which all translates to: more mature choices. Later in life.
Which is good.
How many of us know people who were still on raging hormones and/or married the first person they knew (then) and/or followed social pressures ('cause everybody’s doing it…why aren’t you???) stupidity?
I think this trend is a good thing. It is more grounded in today’s reality (no guarantees anywhere), leaves people more time to experiment (and appreciate) life and define themselves.
And you’re not starting a family without some solid back-up.
Makes sense. A lot.
Sure, it doesn’t sound as touchy-feely and goes counter-culture, but with divorce rates near 50%, I doubt very much that the ‘model of the past’ is a good reference to copy at start.
Waiting before career/finances are stable before having kids (if having any at all).
Ditto for a house. It’s easier and cheaper to rent a luxuary apartment with amenities and maintenance than it is to save up to afford a nice home and then need extra time for lawncare, repairs, etc.
Even more ditto for marriage (I’m on the 10-year plan, and I’m 28 now).
I know many people who have raging hormones and/or married the first person they knew (then) and/or followed social pressures ('cause everybody’s doing it…why aren’t you???).
Yep, sucks for them. I always think it’s crazy to see so many people around me married with children. Even though I’m getting older (by age), I don’t feel older, and I certainly don’t feel that I’m ready to do any of that stuff right now.
I have many other things to accomplish in the meantime, including things that help with self-improvement.
“Old men are always advising young men to save money. That is bad advice. Don’t save every nickel. Invest in yourself. I never saved a dollar until I was 40 years old.”
I’ll definitely be single a while longer, and once married, I’m planning to wait some time before having kids – there is a lot a young couple can enjoy while in “DINK” (dual income no kids) status. As for the house, depending on where I live, I’ll probably buy something while im still single, as soon as I get a job. Thats just the investor in me – I see rent as flushing cash down the toilet.
Maybe. Depends on how much you value your liberty and mobility.
For my part, there’s no amount of turf that’s worth a 20-years commitment (all for the bank’s advantage) compared to my ability to pack bags when I want, without having to sell or pay penalties.
And I love the flat-rate-no-matter-what-happens payment. With housing, you have to cross your fingers that no hasards come in your way.
As you can I see, I do not have the ‘settler’ profile at all. ;0)
Making sure your employers know it keeps the balance a little bit more in your favor in negotiations too.
Yeah, to each his own. Though I would submit, sometimes its easier to sell a house, particularly in my neck of the woods, than to get out of a lease without a massive penalty. In any case, I hate moving, and want to stay in one spot, hence my preferences.
Jeff, there is still hope. It’s New Year’s Eve. You can go out and find a new girl tonight, or someone close enough to kiss. HA!
Hey, I’d buy a house if I could afford what I want (a new home!). But that’s just not feasible right now. And I’m not going to buy something that is complete crap or needs thousands in repairs or upgrades. So renting works fine for me at the moment. I’m actually moving into a two-bedroom (currently in a one-bedroom) just to have more room and set up the second room as an office/guest room.
Dan, yeah, if I did things over again with my girlfriend, we would not have moved in together. I would much prefer that we each have our own place and only “share” time with each other. But hindsight is 20/20 and it’s too late to say, “You know, maybe we should just live separately now, even though we’ve lived together for two years.”
I’m a rule breaker and probably always will be. When we got married I was 23 and she was 18. We had our daughter in the first year of marriage. I was a sailor on a submarine, and an enlisted guy to boot.
Looking at all the indicators we were doomed to failure.
Our daughter will be taking the MCATs this spring with the obvious intent to go to medical school. Our son is joining the Navy in May. We’ve been married for going on 22 years and this is our third house, soon to be torn down so we can built a decent one in it’s place.
I’m a pretty positive guy. I figure I can do any damn thing anyone else can do and I’m not going to sit on my thumb wondering if I might fail. Most of the successful people I know, including the one worth in excess of $100 million despite his failure to get his degree in college, are the same way. There is no such thing as a sure thing so you might as well get to living before you get hit by a bus trying to make a fucking decision which way to go.
I’m with Jeff on the “you have to date first” thing. Honestly, I don’t know where everybody else gets all the free time to date. I work at a company with only two other people (both guys), I take grad classes (most of the grad students are male or married), and I spend a little time with my family. I also like to get some reading and studying in, so I don’t know where I would a) meet some girl, b)get the time to go on a date with her.
Anyway, as far as investing goes, I disagree with the Henry Ford quote. It’s better to invest when you’re young and don’t have dependents. You can afford to be more aggressive, and you have more time for interest to compound. Of course, he wanted young men to buy his products, so that may have influenced his opinion.
You should invest from the get go. Even if it’s only a few bucks here and there time is on your side and it makes a large difference.
Two stories. I met a guy named Ray on a hunt once. He was a retired rancher/farmer and was hunting with his son who now ran the ranch. I asked Ray if he made most of his money in cattle or wheat. He said, “Investments”. He went on to explain that every year, whether he thought he could afford it or not he put money away and if he hadn’t he wouldn’t have been able to retire at all. As it was he was comfortable enough to buy a $300K motorhome for cash.
I put some money away in an IRA when I was 22. It wasn’t even the full $2K at the time, it was what I could get together and it was $1750. I forgot about it for a long time. Once in the dentist’s office I saw an ad for the same family of funds for an emerging growth fund. I thought, What the hell and when I went home I called and had my fund money rolled into that fund. At the time it was only $3300 and it was 10 years later. Back during the NASDAQ runup it went up to just over $35,000. Of course it went back down but even where it sits today with the 50% increase in the NASDAQ this last year it’s doing quite well. I decided to put more money in that fund after all these years. I should have been adding to it all along. $50 a month won’t break you but it sure might make a big difference in 40 years.
My personal take is that we take so damn long to mature. Hell, adolescence starts at 12 (or even younger) and we can still be “finding ourselves” in our mid-20s. To quote a friend of the family: “My son wants to ‘find himself’. Hell, I wish he’d find his way out of my house!”
getting married at an early age doesn’t bother me, it just pisses me off when i see kids raising kids, i.e. out of work 20 something parents with 3-4 screaming brats who are forced to grow up in a shitty environment and ultimately turn out shitty and continue this cycle.
If you’re like me you’ll still be “looking for yourself” well into your 30s…
Henry Ford may not have saved money till he was 40 and done well, but for those of us who aren’t in the position of being on the cutting edge of a trend like, oh, mass production, it makes a little more sense to start early.
If I could go back and change ONE THING in my life, it would be to start saving money when I was 20 or so. If I had done that, and invested it wisely, I’d be looking at being able to retire right now.
Think about it.
Also, for those arguing against houses, if you’re going to stay in one place for more than about two years, it makes sense to buy a house, even if you have to borrow almost all the money up front. Think about it: in two years, probably nothing in your house is going to majorly go wrong. So the likelihood of major repairs is minimal. If you rent for two years at, let’s say, $600/month, then you’ve put over $14,000 into your landlord’s hand. If you decide to move from your house, you have two options: one, rent it out and generate a positive cash flow, or two, sell it. If you’ve waited two years, assuming the same rent, you now have over $14,000 of equity with the bank. Not only that, but your real estate has almost certainly appreciated in value. So you come out quite a bit ahead.
A good bunch of people live through others, defining who they are by who they date/bang – they should get a life, a real one.
(And before the flames start, I do know the difference between dating as to add spice to ones life, in contrast to having dates as one`s only activity (or activity to compensate)).
STEELY: Thanks for the feedback. Ill probably copy your strategy and pass from the saverto theinvestor(big difference: the latter includes the market swings, the former not) when I can afford to lose some. For now, I need the equity far more than its growth. And, quite frankly, after readingDie Broke, I dont care that much for retirement. As for investment style, if you have the risk tolerance to do so, go ahead. I work in compliance, and you have no idea how many people don`t know their TRUE risk tolerance. A ton of them wanted the tech boom returns, thought they were in there for long term, only to shit in their pants 2 years down the road. And now they sue. Talk about flying blind.
I doubt it. If I recall well, on a 100 000$ loan, the first 500$ payment is composed of 498$ interest payment (sorry, no financial calculator at hand right now).
So, in short, you will not wind up with 24*payments in equity at the end. Far from that.
Dont forget taxes (annual and welcoming), insurance, and various surprises`.
I dont have the finances for surprises` and prefer flat 365$ a month payments in the meanwhile. Maybe it will change with additional income. Who knows.
Nation,
Very thought provoking post, was just wondering if any body knows of any existing communes, or ever thought of living in a commune?
Thank you,
Kyle
Dan, you’re right. I was trying to make it simple, without having to get into a lot of calculation.
My point is that you have something at the end of that time, rather than just giving your landlord money and then starting over from zero again whenever you move. (Also, if you’re smart about it, you can work with the bank to make it so that a greater proportion of the principle is paid right from the start. But it admittedly still won’t be the whole thing.)
As for the “risk” of investing, I don’t buy the argument at all. If you have your savings in a bank, you might as well have them under a matress for all the effective good it does you. If you’re generating 3% interest and inflation is also going at three percent, then you’re not doing anything more than just breaking even. In other words, if you keep your money in there till you retire, you’re not any better off, buying-power wise, than if you’d just spent it tomorrow.
If you put your money into an index fund like Vanguard, you’ll be more or less guaranteed an average 10-11% return year after year. This has been historically proven for the past four or five decades. That’s better than any bank is ever going to give you, and it means that you’re actually getting ahead of the game when it comes to buying power. You don’t have to do any research, you don’t have to spend any time on it. Zero. And you can take the money out any time. So there’s no reason for anyone to keep their savings in a bank. Why anyone would is a mystery to me.
And any other investment that anyone makes should be measured against that Vanguard standard. No work; 10-11% per annum. If you do more work, you should expect to get more back … and if you don’t, well, now you know where to put your money instead.
