[DMCForum] Re: Paying for college

["ryanpwright" <yahoo1@xxxxxxxxxxxxxx>]

Mike,

> Just supposin' (and I ain't saying it's me) a young
> fellow at the age of 19 decides he wants to retire at
> 50.  This same fellow wants to play safe so he invests
> wisely and guess what----at age 47 he has $1,000,000
> saved up.  His house is paid for and he has no (zero)
> debts, except for monthly bills--phone, water, gas,
> electric, etc.

OK, let's break this down. 19 to 47 gives you 28 years to save for
retirement. In order to save up $1M, at an average 6% return one would
need an annual contribution of about $14,600. Add to that the yearly
cost of a modest mortgage ($12,000), minimal transportation ($3,000+),
food ($3,600+), utility bills ($3,600+), clothing, entertainment, home
furnishings, and not including a spouse or children, if you lived very
modestly as a single man you could get by on $35,000 - $40,000 a year.
Tell me, how, living like this, does the subject in your example
manage to own and maintain a DeLorean?

You said "for those of us slightly above the poverty line". If someone
retired at 47 with a million bucks in the bank, he never lived
anywhere near the poverty line, and if he's living near the poverty
line now it's due to his own silly decision to retire at 47. In the
hypothetical example above, if our subject would have worked until 60
like the rest of us, continuing his contributions of $14,600 per year,
he would have nearly $2.5M in the bank and would be living on two and
a half times his current income.

Thus, you see that saying "those of us slightly above the poverty
line", as if it's a situation you couldn't control, is a joke. A
statement like that is intended to inspire sympathy and/or guilt on
the part of the person who makes more. It says, "You should feel bad
for me. I live in near poverty. Your money examples are ridiculous and
don't apply to us poor people." It's no different than an able bodied
person on welfare claiming I'm a bad person for wanting to eliminate
his free ride - "Poor me, I need help and you mean people are just
rich jerks without any sympathy" - when he could take a construction
job tomorrow and make $50k a year. It's simply inappropriate.

-Ryan

> 
> He sits down, does the figures, and says, "now is the
> time.  Even if the economy tanks, I can still live
> comfortably and earn enough interest to take care of
> me and my family".  
> 
> Then this same fellow dispurses the funds into ten
> different savings accounts, {so they are covered by
> government insurance) and sits back making only
> 5%interest for his yearly income.
> 
> Then the economy 'tanks'!!  He is still making 2% on
> his accounts, so he is making $20,000 a year (just
> above the poverty level), but he knows he can withdraw
> from the principal and maintain his family's standard
> of living.
> 
> This same fellow then calculates he will live to be
> 100 and guess what---depending on whether rates stay
> the same or go up, the minimum he will have left at
> age 100 for his principal (inhertance) is $562,378
> (give or take a couple thousand).  If the rates go
> down, then the whole country better watch out!!
> 
> I know what you're thinking--why to hell does he have
> his money in several saving accounts??  Because he
> wants things to be simple the rest of his life.  He's
> happy, he's comfortable, and he wants for nothing. 
> Why screw things up by getting the IRS involved with
> complicated tax returns?  (Short form is great!!  By
> the by, I support a flat tax of 15% on everybody!!  If
> all the corporations paid 15%, just like everbody,
> then, this country could run a surplus in less than 10
> years.
> 
> I apoligize to the rest of the forum for this running
> on so long, and it being "way off topic", but I felt
> it necessary to explain fully.  Also, sorry about the
> spelling.
> 
> Mike
> 
> P.S.   Walt, you are right, barefoot is great, but I
> like "barefeet" better.
> 
> 
>             
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