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February 23, 2011


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These stats seem a little weird to me-I'd love to know more.
What does "meet all of their financial needs in retirement" mean? Does this mean that 82% of Americans will be heavily dependent on Social Security and Medicare? That's no big deal. Does this mean that they will have to cut back their lifestyles? Well, most people could, if they had to. Is this based on projections from current retirement savings? Many people ramp up savings as they get older. Right now, most retired Americans are doing quite well-65+ people have the lowest poverty rate in the country, thanks to social security (
Similarly, what does 'learn about money and finance in school' mean? I didn't have a 'money' class, but it come up in a number of different settings, where teachers taught things like spend less than you earn, save for retirement, avoid weird investment opportunities, and other useful money lessons, and I know that many high schools now require a financial literacy class of some sort.
And really, 70% of parents say do what you love even if you can't pay the bills? The parents I work with who say do what you love say 'do what you love in a way that pays the bills' (which is why I like the 'do what you like' framework better). This makes me suspicious the other stats you've posted previously.

80% of college grads moved home...that is a ridiculously high number.

These are a little too shocking. I'm doubtful that these stat are accurate. I'd like to see them backed up with specifics.

Looking at that last one
"69 percent - Parents of Generation Y who tell their kids to choose a profession they love even if it means they won't be able to pay the bills."

Does anyone know people who really tell their kids that kind of thing? I don't know anyone who was raised like that personally. I understand the "follow your passion" advice is common but I haven't heard people add "even if you can't pay the bills" on top of that. Thats just outright irresponsible. Who does this??

FMF, To answer your question about teaching... not sure about the curriculum in your state. In California, where I live, we have a required semester of macro-economics for all 12th graders (supply & demand, etc). When I was teaching this class, I wove in a mini-course on micro-economics and personal finance: teaching 1 day units on balancing a checkbook, responsible use of credit, purchasing a car, price comparison, etc.

At the time, no curriculum existed, so I wrote it.

The best thing to do is contact your local high school; ask to speak to the VP of curriculum or the history department chair; find out if they have a course; and ask to guest speak.

Wish I was still teaching -- would love to have a guest speaker such as yourself available!

Guess who is going to meet the needs of some of the 82% that will be in danger of running out of money during their retirement?

Why, their parents of course, if they are lucky enough to have wealthy ones that included them in their wills.

Unfortunately it will be the generation after them that will be in the most trouble, i.e. the young people that are trying to enter the job market now or will be in the coming years.

How will the 82% be supported? I suspect we will see means testing and/or some kind of tax on wealth/savings. As such, those that saved will potentially be penalized in the long run. Also, as Old Limey said, the young people in coming years will be footing a big portion of the bill through much higher income taxes.

The easiest way for the government to rob the wealthy is to drastically lower the inheritance tax exclusion. That way most of the money that a couple worked hard for, saved, invested, and paid income taxes on as they accumulated it during their life will get taxed a second time when the surviving spouse in a trust dies. This will be particularly hard on the children of small family businesses, particularly farms. In my opinion it's very unjust but it will probably get to that if we are ever to see a balanced federal budget again.

I went to High school in the early 1970's....and accounting classes and economics were all the rage back then. I remember econ included not only macroeconomics but also some personal finance issues--mortgages, the stock market, how to fill out a 1040 short form. Accounting was also helpful---basically, they taught students how to keep the books, run payroll and purchasing etc, for a small company. All by hand of course--not even calculators were allowed in class. Very useful.

My best financial education however was working as a secretary for 2 years while in high school. Learning around the water cooler about the lives of those other women secretaries, who were full-time lifers in the profession---oh boy, it really made me focus on getting an education so I could actually support myself better! They had miserable lives, living paycheck to paycheck, dependent on worthless or abusive boyfriends, really an eye-opener for me. Also, being a secretary was incredibly boring, I knew I had to find something else to do.

I never moved home after college though--I already had a full-time job that I started before I even finished school--made $18K/year which seemed like a fortune back then. I also got married right after I finished college--that was a bad move! But at least the wedding only cost $400. No way was I going to ask my parents to pay for it, because they didn't exactly approve of the guy I was marrying, for excellent reasons as it turned out. It was the thing in those days for people my age to be proud of being poor and independent--nobody wanted to be a suburban well-dressed trust fund baby (even if you did hail from an upper middlee class background), OMG that was sooo uncool. We lived in tenements and shopped mostly at thrift stores, we had a lot of arty attitude. Yeah, we were stupid but who isn't at that age? My husband and I lived literally on about $500 per month including rent. No car, no TV, walked most everywhere, living on ramen and vegetables and beans mostly, we didnt even have a phone, and we turned on the gas oven whenever we wanted heat so we didn't have to pay for it.

It's interesting to see how the yuppie conspicuous consumption thing took over (again?) really aggressively in the late 1980s and basically hasn't gone away--I feel very grateful to have had the experience to know that a person can easily live and have a great time in life without spending much of anything, that spending is a culture and a lifestyle and not really a necessity.

So all those things---a great financial education. Yes, it paid off--I'm very well-off now but more importantly I don't feel like I have to live in a mc mansion or buy a designer bag to shore up my self-worth. I feel sorry for those who went into debt because they felt they had to have those things.

Old limey re: estate taxes: "This will be particularly hard on the children of small family businesses, particularly farms"

There are already extra deductions for family owned small businesses and special accounting for farms that allow them to avoid a lot of estate taxes.
Of course if they dropped the estate tax exclusion drastically that would impact a lot of people but nobody at all in either party is talking of doing that.

Since you're a multi-millionaire you may be impacted by the estate tax yourself. But I'm sure you know that 99% of the rest of us are not millionaires and would pay no estate tax.

I'm another one of those who technically moved back in with her parent's after college. I graduated in May and my job started mid-July I lived with them for 6 weeks or so.

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