It seems to be a weird mix of wall street cosplay and financial ineptitude.
The problem is, giving financial advice en-masse is very expensive and risky for a company. You need to ask a lot of questions about the users situation (assets, debt, income, dependants, etc) to make an informed decision. If you give bad financial advice, your putting yourself at big legal risk. The language has to be very specific (aka hard to understand for normal humans). And often the advice comes out as rather un-opinionated and general, which for most people means it's hard to actually action and put in place. All in all, it's a big investment, big cost, stresses out your legal team - which means less companies choose to do it, which in turn make it less accessible.
The alternative camp is very clearly just choosing to give 0 advice. Just giving access to investment products, with a full hands off 'make your own choices man' approach. Think robinhood. This is where people make mistakes.
The weird thing is while legitimate companies are afraid of giving advice, anyone with a social media presence can get online and talk whatever smack they want, with very little worry of blowback. One of the biggest mistakes I see is somebody from one country (say AU) watching a youtuber talking about another country (say US) like it's a universal truth. Different financial systems have their own metas depending on government retirement schemes, importance of credit scores, mortgage systems etc. Most useful and practical advice is country specific.
Legislation has just fully failed to protect consumers from bad advice, by making the barrier to entry so high for legitimate companies looking to inform at scale that it's not financially viable - compared to just doing the hands off 'not our problem man' approach. They've also done nothing to stop people taking advice from randoms online (not that they really could). Unfortunately visiting a personalised financial advisor in the same way you'd visit a doctor, is just expensive and not an option for most.
I agree with this. It seems that I have to make all the choices myself to shield the company from any responsibility so why should I pay some fee for the advice? No wonders that people get advice from random videos on YouTube or any equivalent source.
The first one is books. Go to a book shop, and find a book on personal finances, written by a registered financial advisor in your country, for your country. It'll be long, stuffy, boring as fuck, but you'll likely come away well informed. I think if you're reading HN this would suit.
Second one is personal financial advisers. You want to talk to an independant one, who's not tied to a company that's actually selling financial products. They shouldn't be paid a percentage commision (also called trailhead) on your money - I never understood how somebody can be 'acting in your best interests' if they're paid by how you invest. You should pay them by their time, like you would a doctor. Except it'll cost like $200
You also want a personalised financial adviser. Some advisors say like the one you'd find it you went to a bank, or a mortgage shop have a limited scope - they're only allowed to give advice about the bank's products, or mortgages specifically. You want full picture. Sometimes employee assistance programmes if you have that will actually get you a few free sessions with an adviser, use them.
I looked into this a couple of months ago. It turns out it costs minimum ~$2,000 here in Australia to get anything that's not "General Advice only".
https://static1.squarespace.com/static/5eb4889e5e47b4255c410...
I don't know where you could possibly get high-quality, personalized financial advice (with fiduciary standard) for 200. From my experience it's more likely it's on the order of thousands of dollars.
Due to the increasing financialization of the economy, more and more people feel like they need to become wannabe speculators to protect their situations.
Thanks, Wall Street and Harvard Business School for fucking us all.
And fuck the Uniparty for squashing any real option to them.
With I-bonds you don't need to speculate on whether the bond will default, but it does force you to speculate on what your financial situation will be over the next year.
Those times never existed for the vast majority of people. Minorities, single women, most men...... None of them had this rose colored past.
Statistically, more people now have more income in the US than ever before. Each income level is higher, some more than others (and this is a static snapshot, most people move around income quintiles throughout a career), options for goods are higher, items are safer (cars especially), and on and on.
The "life used to be so easy to make a good pay and have a great life" views are not backed by the evidence.
I don't know about that. My minority, immigrant, non-English speaking grandparents and their siblings (several are still alive and in their 90's) all own their homes and are still collecting pensions from their blue-collar private sector jobs. Some of them worked in factories sewing ladies undergarments, purses, and shoes. Some of them worked on road construction crews. And one was a janitor in an office building.
The majority of people never were in a pension plan, and even now a lot of people in pension plans don't work for that employer a full career, only getting partial payouts.
Currently the main source of retirement funds for most retirees is Social Security. So all those supposed people in wonderful pensions from the 1970s and so on either don't exist or make so little from those pensions that SS still pays more.
Don't assume your local situation is what the majority sees.
"By yearend 1977, total employer contributions to defined benefit pension plans had risen [...] covering nearly 35 million active employees." [More than half.]
https://www.bls.gov/mlr/1991/12/art3full.pdf
https://www.thebalance.com/the-history-of-the-pension-plan-2...
https://fred.stlouisfed.org/series/USPRIV
Add to that, the public sector workers that were (mostly) all pension and you have more than a majority of workers on pension plan during that time period. No one is wearing rose tinted glasses.
Yes, obviously today, pensions have been removed from (almost) all private sector work places and are rapidly disappearing from the public sector too. Everything has been converted to some kind of investment plan; to pump money into to Wall Street. And we saw how great these investment plans worked out for the poor folks that had planned to retire around 2008.
Except there were over 90 million workers by then [1]. The FRED series you picked is not all employed people.
> And we saw how great these investment plans worked out for the poor folks that had planned to retire around 2008.
Ah, cherry picking, the best of all logical fallacies.
It's already known that those pensions didn't turn out too well either, since most of the people in that time now get most of their retirement income from Social Security.....
>to pump money into to Wall Street
And now the bias shows. Why not own some productive assets? What do you think pension plans do with money? Sit on it in a safe? Invest them all in the employing company, increasing risk, so that when/if the parent company fails the people get screwed? (Which happens and still happens a lot).
I don't appreciate your tone here. Everything I posted was the result of a quick web search. It just so happened that the FRED data I found corroborated the numbers in the study I found. Maybe you missed it, but both the study and FRED data are specifically about private sector workers.
Here is some more data (not hidden behind a paywall like your study):
https://data.bls.gov/pdq/SurveyOutputServlet
It looks like at the end of 1977 there was 85M people employed (total) in the US. Which is certainly not "moving above the 90-million mark" as your page suggests. So maybe your data is cherry picked? Is your data even US data? The page you provided doesn't say.
> It's already known that those pensions didn't turn out too well either
You didn't back this up with anything. Private pensions are protected by ERISA that was passed in 1974. It requires employers to have separate assets to cover their pensions and created the PBGC which insures them. The only pensions that I've seen go belly up are state (Kentucky) pensions where the state governments (not beholden to ERISA) raided the pension funds for other things.
> Why not own some productive assets?
If by "productive assets" you mean real estate, the price to play is way too high. And on a moral note, allowing family homes to be commoditizated into investment vehicles for the rich is part of the problem. If, instead, "productive assets" is just your fancy way of saying stocks and their derivatives then yeah; I'm invested in the market. I'm not happy about it, but there isn't another choice.
> And now the bias shows.
Yes I'm biased. Fuck Wall Street. It has nothing to do with "investing in companies". It's all about wealth extraction (from companies and now from dumb money). It produces nothing of value.
> Gone are the times when having a good job, paying a reasonable mortgage for a reasonably paid house, saving a reasonable amount for retirement, while keeping a reasonable amount for emergencies (rare, before lay-offs become the knee jerk reaction of MBAs fatten their bonuses).
Is there a word or half the sentence missing there? I cannot follow your meaning.
Yes I know, how do you tell someone where you work without telling them where you work.
I’m utterly convinced FANNG comp is overvalued due to selection bias on Blind and direct PR efforts by those companies.
Thats not meant to throw shade on warehouse workers as “lesser”. My dad is retired factory worker.
I feel like a lot of people just can't stand having money standing there doing nothing as an insurance policy when they could be making money or buying something with it.
Depending on the interest rates, and assuming they can keep the line of credit if they lose their job, this might make sense since it's a choice between reducing debt now vs potentially increasing debt later.
The second part is just silly, but it's probably the attitude they got them in debt in the first place.
And then, they pay more on their actual insurance policies to have low deductibles because they can’t afford a larger deductible because they don’t save anything.
Also the blog clearly indicates they were going to poke the fate bear, poked said bear, and then went surprised pikachu.
Is anybody else just sick to death of the term "emergency fund"? If you go to /r/personalfinance, every other comment is reminding people to stock up their emergency fund. Towelie says, "Don't forget to bring a towel!"
I'll tell you about my real "emergency fund": In an actual, living emergency, every single dollar I have, in every account, even my IRA, and all my credit lines combined, are my emergency fund. That's the nature of an emergency. If I empty out some specially earmarked emergency fund, I don't tell the doctor to quit taking the bullets out of my spleen because I'm tapped. "Sorry, can't touch my HYSA!" (HYSAs are another butt bug of /r/pf)
What people mean by "emergency fund" obviously is their "don't stupidly overdraft your checking account fund", but they never spell that out.
More specifically, I have a HELOC and I’m always getting low and no interest balance transfer options from my bank.
Almost nobody has this. The r/personalfinance memes exist largely as "the very basics for people who don't have the first idea how to plan for their financial future."
This is just another one of those benefits of being wealthy. On average, self-insuring saves money. But for a lot of people an emergency fund is a critical thing because they don't have access to liquid assets without gargantuan 401k penalties.
Even then my focus was to always be employable and to be able to find a job quickly.
If you’re young and don’t have family/debt you can just use your ira as an emergency fund. If you have a family and kids you need cash available for unexpected events. Most people don’t have tech jobs where they make 5k every two weeks. A car accident with no emergency fund means many people can’t get to work, lose their job, etc. They need safe cash for emergencies.