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B…But… why don’t we plan for revolution instead?
i bettr be a grl in two years-
Aww, come give momma a hug baby girl ❤️
Maria you are already a hecking cute girl already love
thad be coool <3<3<3<3
To be fair, with access to a time machine there are plenty of ways to generate a shit ton of money. Enough money to ignore how fucked up the world is and only worry which cutlery to use for caviar.
easiest is to make a deposit at Berenberg Bank, $1 then would be worth about 100 billion now, assuming the 6% rate that was common for the elizabethan age is maintained.
Just don’t tell anyone that your bank PIN is 1077
Heh, retirement, good joke
You can do it. Especially if you’re young. Time is on your side.
Crazy that retirement has come to mean “independently wealthy” vs what it used to mean - worked for a business or government long enough to have a pension.
Worse - i doubt that, even if i become independently wealthy, that any systems will still be viable and capable of taking care of me.
I can’t even trust that I will have a pension when my time comes around.
Sanity check, I should pay off high interest loans (>7% APR) before I save for retirement, right?
You need to run the numbers to see what makes sense mathematically. As others pointed out there may be other implications like tax advantages and employment matching programs. In general though you should pay off any debt higher than (realistic) expected returns first.
No. Save for retirement and pay off the debt. You’ll likely always have debt so it becomes an excuse to never save for retirement.
Weird but, probably not. This is especially true if
- there’s an employer match to consider
- the retirement vehicle type is exempted from civil and/or legal disputes
- the class of debt can be discharged via bankruptcy
- you expect inflation to continually chip away at remaining debt principal
- you expect markets to perform on average as they have historically
- your contributions can lower your tax burden now or later
Among other things
Yeah. Market average is ~9% over all time, but I don’t see the market being ‘stable’ in the next eight years. Better to get rid of the guaranteed bad interest right now before putting stuff into the market for possibly more or less interest. It’s the safe option.
Do not underestimate capitalists’ ability to make line go up.
But the hyper inflation will make the interest payments increasingly smaller.
I’m pretty sure that’s not how that works. The math is the same on either side of the owed/earned determination.
If you start with 100$, and earn 10%, you now have 110$. If you owe 100$ and it earns 10% interest, you now owe 110$. This happens regardless of how much work that money is able to accomplish at the time.
Debts won’t grow with inflation, but the math ends up being the same anyways because the actual money amount remains constant.
More importantly, there is no guarantee of market inflation or deflation, much less a “hyper” version. The debt is a solid realised number. Getting rid of it is guaranteed money saved. Saving money in the market instead is a gamble against that debt, and not a guaranteed result, especially if you’re betting it on a less likely event such as hyperinflation.
*edit
And all of this is predicated on an either/or dichotomy. Really, if OP can, splitting between the two options based on their personal risk assessment is the better choice.
Right, but the purchasing power of that money is important. If a loaf of bread is $1000, $500 in interest isn’t as impactful as if a loaf of bread was $1. (At that point it’s basically the lender’s problem anyway)
The debt becomes cheap if inflation ramps up enough, but if the market is outpacing the inflation (big if), the money would be better kept in the market.
But you’re right about it not being a binary decision. If OP has multiple high interest debts, they’d be better using some money to pay down the highest interest debt first, while also investing/saving some.
As mortgage rates are often above 7%, then also be cautious. One should not delay retirement savings for a 30 year mortgage payoff.
Are you talking credit card (so like at least 15% Apr) or personal loans?
Retirement? I don’t have faith that it’ll be an option for my generation.
If you don’t start saving now, it probably won’t be.
There you go turning a larger socioeconomic issue into a personal one. The current system is designed to prevent anyone from acquiring wealth unless they’re both high class and lucky enough to not get wiped out by an injury or disaster. Unless there is major systemic change in the next couple of decades, retirement is only gonna become more exclusive. I shouldn’t need to be lucky in life to not have to work until I die.
I see this a lot but it’s not really true. You’re not going to be fuck you wealthy but you can have a respectable retirement without working till you drop. Ask yourself some honest questions about how much effort you’ve put into financial planning. You may be surprised. And don’t hit me with unaffordable homes problem; they are unaffordable. Don’t believe you need to own to have a good life.
Maybe if you live in a non fascist hellhole things are more hopeful, but I don’t know if US social security will exist in 40 years. I don’t think our busted medical system will not automatically bankrupt anyone who has a health crisis at any point in my future. I don’t know for sure that I won’t end up in a concentration camp in the next few years. And those are just US specific things.
Nationalism and militarism rises globally as the hegemonic great power loses its grip. We are entering a dangerous area with wars brewing on multiple fronts, any of which will cause economic stress that can cripple anywhere by pure chance. Climate disasters that could be mitigated or prevented will not be addressed properly in areas with chronic instability. Climate change already kills hundreds of thousands every year at a minimum, which will only get worse and worse for the rest of the century.
I don’t know what generation you’re from, but you’re clearly tone deaf as to the challenges many young people face. The neoliberal economy has been replaced by fascist oligarchy, which is something few people on the left even understand the ramifications of. Things are fundamentally more dangerous and violent, closer to living in an ex Soviet state at the time of collapse in how our world will change. People will desperately crave the stability you imagine exists now, but it won’t come back for a while, at least where I live.
All non-trivial issues, certainly. But ask yourself if your fear of the future is keeping you from planning your best shot right now. You don’t need to answer anyone but yourself. If you haven’t (or are avoiding) financial planning out of fear you’re missing out on valuable time. You won’t know what’s possible if you don’t even try.
Retirement plan can be killed by police after assassinating a fascist.
I was not either. But a few of us survived. Better to be old with some cash, then old with none.
the number of times I’ve wished for a time machine so I could transition sooner… 😣
Part of me regrets not transitioning already, but then my kids probably wouldn’t exist if I had.
Kids are fantastic at eliminating regret for things you did decades ago. If you’d “fixed” nearly anything, they’d be different people instead.
You just gotta be a good enough parent now that you don’t create whole new regrets.
Well i try my best, but it takes a village to raise just one child. Unfortunately it takes just one shitty parent to fuck up all that hard work and there are some choice examples at my kids school.
“Plan for retirement? But you look 30, tops”
I get a certain kind of bittersweet melancholy when I realise there still are people who believe retirement will be a viable option. I remember the days in which I, too, used to have hope…
My retirement plan is to ignore my health and hope that some ailment just takes me quickly and silently in the night. Preferably sooner than later.
oh i’m planning my ailment in advance.
I omitting some details here because to big of a topic for a comment:
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perceive “loss” as the measurement of things that get destroyed and cannot be reversed. Disconnect it from economic win/loss balances for now,
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observe how our society is creating huge amounts of loss worldwide, natural resources are being destroyed, people are getting exploited living below their potential.
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realise that life is inherently a destructive action and that our society will always create loss to continue to exists.
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accept that in this measurement all life forms have a negative balance, comparable to the ecological footprint
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create industries and businesses that focus on creating a stable outputs for the least loss.
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distribution centers formed from current local small government ally to these new industries and can agree for a portion of the output based on the amount of people they serve and the self reported needs they have.
distribution centers pay with fountain pen money which is the system governments and banks use today to keep making new loans. It is essentially just paper money. Where we now sustain it by paying old loans back (often with new fountain pen money) in this system we simply hold a record of the economic debt creates.
Distribution centers know the needs of the population through online forms that list all the resources and stuff they have acces to. In a few rounds people choose what and how much they need (reasonable limit based on data) if demand is high the policy is to first re package in smaller portions to meet demand, or if no fair distribution can be archived to not distribute that good at all. (Skipping so much detail here)
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these goods are essentially free, but the loss gets recorded, think of it as getting an infinite loan allowing you an unconditional negative balance to guarantee you a proper life on the world you live today without requiring us to solve sustainability for the long term future first. Also with the wastefullness of the current system, you’re not making a dent.
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in the first stage the loss can be calculated as economic money all input resources costs as the resources will probably be bought from the current economy. The result of the cost calculation and the calculation formulas itself must be fully transparent, loss calculation is also purely additive, you cant do an action that somehow revert what got lost. Profits need to be considered their own form of loss, measured transparently beside it (the only distinction is that you can lower cost price simply by not hoarding profit while resource ingredients always contribute a fixed loss)
What is now “price of a product” becomes a reliable calculation where these industries can be properly compared to each other based on input/output and total cost all in ratio to each-other.
This is why i titled this concept “rational economy”
This economy would start small with a few products (outputs of the first ones), acces should start equally small, think hospitals, nursing homes.
You would in a transition scenario have a system where, the normal world economy is still there, but vulnerable people get acces to a second type of store that does not require payment, adjusts itself based on demand and is transparency designed to measure the exact impact loss it costs to sustain.
This is why a subtitled this concept “an arrogant retirement plan for gen z” and why its relevant to the post.
For the record i am not gen z and consider myself too old to ever see this stage. But if we start now then by the time gen z is old they may become the first post scarcity consumers.
No i am unwilling to answer the question about all the plot holes above, i have to ommit so much nuance just to type this out. Just tell me if you think it be valuable if i Finnish my book about this or not.
The main hang ups I see, is the group that determines what counts as loss and how much loss each thing has. These would be the points of attack where the powerful would seek to undermine trust/effectivity/accuracy and manipulate this new system for themselves. There would need to be rigorous safeguards in place to prevent such perversions.
That said, I like the planned economy aspect but I also feel like it could be used quite well with a smaller scale, more anarchistic society of loosely interconnected groups.
TLDR
This is the TLDR if i ever get to put the whole thing on paper
Senpai, write the essay.
Leaving this comment as a save point for this comment (save function is finicky on piefed with voyager rn). I really like the concept and have been looking for more people with this perspective. Distribution centers for resources has always been my thought process.
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